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What is the ROI from employee engagement?
Posted by Insightlink on 10/03/19
We often hear from new HR managers who are enthusiastic about the opportunity to implement employee engagement survey programs in their organizations but have a hard time convincing senior management of the value they can bring vs. the cost of conducting surveys and doing the necessary follow-up to bring about change. HR is often on the losing side of the conversation and that's a real shame.
It's a ridiculously short-sighted management decision to ignore the potential benefits of measuring and increasing engagement and we'd like to show you why.
Here's a round-up of some of the statistics from studies conducted around the globe. The truth is, employee engagement programs should NOT be considered an unnecessary or frivolous expense. They are, in fact, an investment. And if done right, they are an investment with very healthy returns.
Earnings Per Share & Turnover
Net Income and Shareholder Return
In a study prepared for the UK government (Engaging for Success: enhancing performance through employee engagement), researchers found the following correlations to employee engagement:
Profitability & Attrition
The Corporate Leadership Council studied the engagement level of 50,000 employees around the world to determine its direct impact on both employee performance and retention. Here are two important findings:
Customer Loyalty, Productivity, and Turnover
Any business owner can tell you that optimizing productivity levels is an uphill battle, and customer loyalty is what companies depend on to make payroll. (If only employees would understand that— right?) In an article published by Jonathan Pont, the most-engaged workplaces experienced the following performance metrics:
Cost of Disengagement
As if the business metrics that correlate to high levels of employee engagement aren’t convincing enough, let’s take a look at how much disengaged employees can cost a company. McLean & Company found some very compelling correlations:
A disengaged employee costs an organization approximately $3,400 for every $10,000 in annual salary.
Disengaged employees cost the American economy up to $350 billion per year due to lost productivity.
If companies want to bolster productivity and profitability, increase customer loyalty and operating income, and slash attrition and disengagement losses, they have to engage employees. Also true is that you can't change what you don't measure. Hence the importance of a robust and comprehensive employee engagement survey.
Where does your company stand on each of the critical "4Cs" of employee engagement and satisfaction?
How many of each do you have?
AboutInsightlink Communications are experts in employee survey design, data collection and analysis. Since 2001 we've helped companies of all sizes measure and improve their employee satisfaction and engagement.
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