Employee Engagement

10 ways employee engagement affects my bottom line

Companies cannot achieve success without the support and commitment of engaged and motivated employees. Many C-suite executives still ask the question: “Is employee engagement a necessary or just another nice to have? Does it really impact my company’s bottom line?”

A definition of employee engagement by author, Kevin Kruse, describes it as ‘The emotional commitment the employee has to the organisation and its goals’. Kruse goes on further to point out that this emotional commitment means these employees care about their tasks and the company as a whole; working toward the company’s goals every day.

Engaged employees are more likely to spread positive sentiment about your company to friends and family; are more productive and are engaged to see the company succeed. But will you see positive business results because of this?

Understandably, some of the biggest concerns of most C-suite executives and business leaders are to remain competitive in the marketplace, champion operational excellence and an unyielding pursuit to grow its bottom line.

Central to all of these business outcomes are your employees. Their engagement levels determine whether you can compete and be successful.  They can be your greatest asset and competitive advantage if you strategically leverage it as a business driver.

Still not convinced?


Here are 10 powerful statistics that prove the ROI for employee engagement:

 

employee engagement

  1. Companies with engaged employees outperform those without by 147% in earnings per share. (Source: Gallup)
  2. Highly engaged business units achieve a 20% increase in sales (Source: Gallup)
  3. Companies with high engagement show a 9% higher shareholder returns (Source: Towers Watson, 2009)
  4. Companies with the most effective employee communication have 47% higher shareholder returns over the last five years (Source: Towers Watson, 2010)
  5. Companies with engaged employees showed a 19% increase in operating income over a 12-month period, compared to a 33% decrease in companies with disengaged employees (Source: Towers Perrin, 2008)
  6. Highly engaged employees have less absence days – on average 3,5 days – compared to disengaged employees (Source: Gallup Germany, 2011)
  7. A 5% increase in total employee engagement correlates to a 0.7% increase in operating margin (Source: Towers Perrin 2004 European Talent Survey: Reconnecting with Employees: Attracting, Retaining, and Engaging, Towers Perrin)
  8. Companies employee engagement scores within the top quartile of Gallup’s database have 70% fewer safety incidents than those in the bottom   quartile.(Source: Gallup 2016)
  9. Companies with engaged workers have 6% higher net profit margins (Source: Towers Perrins)
  10. Employee engagement affects nine performance outcomes. Compared with the bottom quartile, top-quartile engaged units have: (Gallup)

1. 37% lower absenteeism
2. 25% lower turnover (in high-turnover companies)
3. 65% lower turnover (in low-turnover companies)
4. 48% fewer safety incidents
5. 41% fewer quality incidents (defects)
6. 10% higher customer metrics
7. 21% higher productivity
8. 22% higher profitability

In this tough business climate where market volatility, political uncertainty and multigenerational workforces are the order of the day, companies need a competitive edge; a differentiator that sets them apart.

So what is that point of differentiation? It’s your employees.

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