We recently sat down for a chat with Kevin Sheridan, bestselling author of Building a Magnetic Culture, to talk about employee engagement, recognition and what makes a company magnetic. Here are edited excerpts from that conversation.

Globoforce: Kevin, your recent best-seller is called Building a Magnetic Culture. So, what exactly is a Magnetic Culture?

Kevin Sheridan: I’m glad you started with an easy one. A magnetic culture is one that will attract top talent, draw that top talent in and make it difficult for people to leave. So that’s why we called the book that, and we think it is synonymous with the whole concept of employee engagement.

Globoforce: How did you come to define the concept?

Kevin Sheridan: Well, about twelve years ago, we were looking at the historical definition of employee engagement, and for years it has been thought of as two things: intent to stay and readiness to exert extra discretionary effort.  Intent to stay is really at the heart of the magnetism of the highly engaged culture and company. If you build a company of high engagement, it will act like a magnet. The magnetism will draw top talent in, and boy, will it make it difficult for people to leave—they’re just not going to want to leave that special culture.

Globoforce: You’ve worked with a lot of companies that have created magnetic cultures. In your view, who is responsible for creating a magnetic culture?

Kevin Sheridan: Well, that’s where I think my industry has completely missed the boat, and the definition of employee engagement was so sorely in need of being updated. Under the old model, consultants would do these surveys and they’d come back to management and say, “Here are your pain points and here are your opportunities for improvement.” Then they’d train the managers and the supervisors and tell them the outcome of the employee surveys wasn’t very good because people dropped the ball.  And then the consultants would implore management to take this seriously ,and they’d build an action plan and blah blah blah. And very importantly there was a key constituent left out of the solution—that being the employees themselves.

So it should be dual ownership. We need to empower the employee to also be an owner of engagement. It seems like a no-brainer, right? I had a client I worked with for years, who said “Isn’t that the ultimate oxymoron — employee engagement without the employee? Why aren’t we involving the employee?” Yet so often, that piece is forgotten.

Globoforce: So it is a two way street.

Kevin Sheridan: Right. Literally every single item in an engagement survey is actionable by both the manager and the employee. That is the piece that is too often forgotten. A client of mine literally said to me “Kevin, something is missing. I’m tired of going back to my managers every year and saying it’s all up to you. When do we get the employee involved?” And when he said that, bells went off in my head, and he said words I will never forget. Those words were:  “If I think of the healthy relationships in my life, whether it is my relationship with my wife, my church, my kids, my community. They’re all a two way street. Why should engagement be anything different? And he said, “If my relationship with my wife was as one-sided as this, we would have been divorced by now.”

Globoforce: Okay, so everyone owns engagement. What about stewardship?

Kevin Sheridan: Sadly, it is pretty common for companies to just file responsibility for employee recognition and engagement under HR and forget about it. Like with the employee survey. One HR director I worked with asked me once:  “I understand that HR is going to be involved, but are we the owner?” I said no, no, no. That is the nail in the coffin of the employee survey. If management eschews being the owner of an employee survey and pushes it off onto HR, that is a huge red flag. This is not an HR project. And if I look at all 220 of our best-in-class customers—these are the top 10% of our database on engagement—not one of them has a management team that sloughs off responsibility onto HR for the employee survey.

Globoforce: Senior leadership can’t drop the ball.

Kevin Sheridan: Right. If you have senior leadership and management teams that are ambivalent and they don’t frankly care—or they themselves are disengaged—you’re going to get hugely disengaged outcomes.

Globoforce: And what are the impacts of disengaged workers?

Kevin Sheridan: In a manufacturing environment, safety accidents will go up. In a customer service environment, there is a correlation coefficient to .86 degree between employee engagement and customer satisfaction. There is a correlation to absenteeism. The average cost of absenteeism for the average employer in North America is $600 per employee, per year. That’s a lot of money.

[When you have high engagement] retention costs go down. Recruiting costs go down. And this is the business case for engagement. The Wharton group did a study years ago that proved that high-engagement cultures and highly engaged companies earn 3.5x more than companies with average engagement. And our studies have shown that as well.

Globoforce: What is your take on the tie between well-understood company values and having a magnetic culture with engaged employees?

Kevin Sheridan: If I shared with you the top 10 drivers of engagement, values hit two of them. The first one is the fifth most impactful driver, which is strategy and mission—which is very closely tied to values, often times the strategy and mission is part of the value statement. But it can be hard to communicate.

This reminds me of a focus group I did years ago in a company that did most things well, but not the communication of values. I asked one employee why, and he pulls his nametag out, and says, “I know the strategy mission and values by heart. It’s on the back of my name badge. They made me memorize it. I repeat it on staff meetings when called upon.” And then he points to the poster on the wall which has the strategy mission and values listed and says “Enough of the wall candy. Tell me how my job fits into the whole thing. I don’t understand how my job fits into the picture here. No one has told me that.” Companies and managers have failed to articulate the linkage between that job function and the success of the strategy mission and values.

Globoforce: And the second?

Culture—everything from diversity and inclusion to workplace flexibility and appreciation. Think of this example: an environmental services worker in the average hospital in the US… How many of them have had their director tell them, “By the way I want you to know that by cleaning our equipment, and keeping this hospital in a clean environment, you’re having a direct impact on lowering infections and essentially you’re saving lives. You should feel awesome about what you do, because I certainly do.” Only about 5%, maybe 10% of the directors in charge of environmental services have taken the time to articulate that, and that’s sad.

Globoforce: So that’s a really interesting tie in to what we do at Globoforce, which is the recognition piece of things. What role do you think recognition plays as a driver of a magnetic culture?

Kevin Sheridan: It is key. It’s the number one driver of engagement. When we see a customer score low on the number one driver of engagement— recognition—we will do focus groups Employees will say to us: “You know if we mess something up, they’re here in a minute. I can’t begin to tell you when was the last time someone said ‘thank you.’ I don’t feel appreciated. I never hear an ‘atta girl’ or an ‘atta boy.'” Appreciation. Thanks. These are still widely underestimated. But again, it is no surprise, because as I point out in the Building a Magnetic Culture book, when we do a key driver analysis, the thing that always ranks as the most impactful things vis a vis engagement is recognition. It is always number one, at the top of the key drivers.

Kevin Sheridan

Kevin Sheridan is Senior Vice President – HR Optimization at Avatar HR Solutions and former Chief Engagement Officer at HR Solutions. He has extensive experience in the field, having co-founded three successful survey-related organizations and consulted for some of the world’s largest corporations. He is the New York Times Best-Selling author of Building a Magnetic Culture®, published by McGraw-Hill, and The Virtual Manager, published by Career Press. To learn more about Kevin’s books, visit http://kevinsheridanllc.com/books/