These “better results” not only relate to financial (higher revenue and profits), but also in people terms – less stress, less absence among employees and higher customer satisfaction.
In theory, employee engagement makes perfect sense. Engaged employees are far more likely to put in the extra effort when dealing with customers, working on projects and adapting to the changes affecting all organizations today.
However, until recently it’s been difficult to quantify exactly what effect engagement has on business success. That’s starting to change.
For example, an Institute for Employment Studies report put this figure on it: Organizations increasing investment in engagement by just 10% can increase profits by approximately US$2,100 per employee, per year.
Aon Hewitt’s 2014 Engagement Report examined the link between engagement and its impact on a business’ bottom line:
- Organizations in the top quartile for engagement (where more than 7 in 10 employees are engaged) saw a 4% increase in sales growth compared to an average company. By contrast, bottom quartile engagement companies were down 1%.
- Operating margin was also affected; top quartile companies saw 2% increase, versus a 3% decrease for bottom quartile companies.
- As for total shareholder return, top quartile companies saw a 4% increase, while bottom quartiles were down 8% compared to average companies.
Engagement harnesses people power
It’s not just growth and shareholder returns that are affected. Engage for Success have demonstrated the link between engagement and reduced absenteeism (2.69 average sick days versus 19 for disengaged employees). When plastic bottle producer Nampak increased their employee engagement by 5%, absence levels fell by 26%....
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