Is Employee Engagement Worth the Effort?

Engagement and performance

  • Gallup examined thousands of businesses comparing financial performance with engagement scores
  • Those with engagement scores in the bottom quartile averaged 30 – 50% more employee turnover, 50% more inventory shrinkage and 62% more accidents
  • Those with engagement scores in the top quartile averaged 12% higher customer satisfaction, 18% higher productivity and 12% higher profitability
  • Another Gallup study found that the Earnings Per Share (EPS) growth rate of organizations with engagement scores in the top quartile was 2.6 times that of organizations with below-average engagement scores.
  • Tower Perrins carried out a global survey looking at similar comparison (highlighted in the book Closing the Engagement Gap: how great companies unlock employee potential for superior results by Gebauer and Lowman.
  • Those companies with a highly engaged workforce improved operating income by 19.2% over a period of 12 months, while those companies with low engagement scores saw operating income decline by 32.7% over the same period.
  • Those companies with high engagement scores demonstrated a 13.7% improvement in net income growth while those with low engagement saw net income growth decline by 3.8%.
  • Most notable was the 52% gap in the performance improvement in operating income between companies with highly-engaged employees versus those with low engagement scores.

Engagement and costs associated with absenteeism

  • Gallup found that engagement levels can be predictors of sickness related absenteeism, with more highly engaged employees taking an average of 2.7 days per year, compared with disengaged employees taking an average of 6.2 days per year.

Engagement and employee turnover

  • While the research says that employee engagement may well be worth millions to businesses, an ACCOR Services Report indicates that over 75% of managers have no engagement plan or strategy.  Even more startling, Accenture found that over half of CFOs surveyed could only guess at the return on investment in their human capital.

One aspect of our work at Resources for Leading is helping companies GET, KEEPand GROW the talent required for their success.  Few things are more exciting than helping companies create Cultures of Engagement.  When a group of leaders are committed to developing a comprehensive strategy for employee engagement the results can be phenomenal.

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