What’s Your ROI on Employee Engagement?
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What’s Your ROI on Employee Engagement?

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What’s your ROI on Employee Engagement?

It doesn’t take a rocket scientist to know that investing in employee engagement yields multiple returns. Financial gains. Productivity gains. Customer satisfaction gains. Heightened innovation. Lower absenteeism rates. Nimbleness. And a crushing competitive position are just a few off-the-cuff examples. 

 

“Treating employees benevolently shouldn’t be viewed as an added cost that cuts into profits, but as a powerful energizer that can grow the enterprise into something far greater than one leader could envision.“  – Harold Schultz, founder and former CEO of Starbucks 

While employee engagement is something that every executive team should keep a close eye on, what often evades leadership is the commitment required. It’s not uncommon for leaders to be too busy with other “more pressing” matters. But does anything really matter more than the people who build your products or deliver your services? The people who support all the different functions on the front and back end and all points between?  

“To win in the marketplace you must first win in the workplace.” – Doug Conant, former President and CEO of the Campbell Soup Company 

Engaged employees are the engine behind productivity and profit, stability and growth. Disenfranchised employees are the speed bumps that slow progress. But why take our word for it? 

What the Numbers Say About Employee Engagement

We’ve compiled this list of 15 key statistics from a number of studies and published business reports that illustrate the value and return on investment (ROI) associated with employee engagement.

  • Investing in employee engagement offers significant opportunities for real ROI. Engaged employees outperform peers that are not. Overall, companies with high employee engagement are 21% more profitable. (Smarp 2021) 
  • Companies with high and sustainable levels of engagement tend to have operating margins up to three times higher than companies with low or unsustainable levels of engagement. (Willis Towers Watson) 
  • 86% of customers will pay more for a great customer experience (Forbes 2020) And myriad studies show the inextricable link between engaged employees and great customer experience. 
    • …YET, ALL THAT SAID… companies in the U.S. lose between $450-$550 billion each year due to disengaged workers. (HR Cloud 2021)
  • Some 85% of employees were not actively engaged or were actively disengaged at work in 2017, meaning that only 15% of employees were actively engaged. (Gallup 2017) In 2019, the percentage of highly involved employees enthusiastic about and committed to their work and workplace—reached 35%. (Gallup 2020)
  • Highly engaged employees are 87% less likely to leave their place of work. (Techjury 2021)
  • Teams scoring in the top 20% in engagement experience 59% less turnover. (Techjury 2021) 
    • Turnover is estimated to cost U.S. employers over  $1 trillion a year. (Gallup 2019)
    • Replacing a lost employee costs between 33% and 150% of annual salary. (Forbes 2019)

More Statistically Supported Employee Engagement Benefits

  • Highly engaged workplaces have been found to experience 41% lower absenteeism rates. (Gallup 2017) 
  • 84% of workers from the Fortune Best 100 Companies to Work For say that they look forward to coming to work every day, compared to the overall figure from all US companies pegged at 42%. (Techjury 2021/HR Technologist) …AND… being named a “Best Place to Work” is associated with a roughly 0.75% jump in stock returns during the ten days after the announcement—a small ROI but statistically significant effect. (Glassdoor 2015) 
  • In a competitive talent market, 46% of job seekers cite a thriving established culture as very important when choosing to apply to a company (builtin.com 2021) 
  • Organizations that act on today’s social issues see a 40% to 60% increase in the number of highly engaged employees (Gartner 2021)
  • According to Gartner’s 2020 ReimagineHR Employee Survey, employers that support employees with their life experience see a 21% increase in the number of high performers compared to organizations that don’t. (HBR 2021)  
  • Scientifically vetted and rigorously supported approaches to employee engagement and the entire employee lifecycle experience can lead to dramatic results. Galvanize, a leading B2B SaaS company for instance, increased its Employee Net Promoter Score (eNPS) from 37 to 60 from March 2019 to November 2020.  The average eNPS score for Canadian technology companies is 29.  A positive work culture, reflected in eNPS scores, has been linked to improved employee engagement, increased productivity, higher profit margins, and a healthy ROI. (WorkTango 2021) 

 

“The responsibility of a company is to serve the customer. The responsibility of leadership is to serve their people so that their people may better serve the customer. If leaders fail to serve their people first, both customer and company will suffer.” – Simon Sinek, author, motivational speaker, and marketing consultant