The ROI of Improving Employee Engagement

Editor’s Note: It’s an annual tradition for TLNT to count down the most popular posts of the previous 12 months. We’re reposting each of the top 25 articles between now and January 2nd. This is No. 9 of 2016. You can find the complete list here.

Many leaders have spent countless hours hoping for business to return to pre-recession vitality levels.

They’ve waited for something to rescue them from the seemingly endless challenges they’re facing on a daily basis, and wondered where the next big breakthrough is that will finally snap the economy out of the doldrums and set their organizations back onto the path of prosperity.

But some leaders knew the breakthrough would come from someone, not something. These leaders tapped the resources of their employees and encouraged them to help navigate the challenges and economic uncertainty.

And their organizations have weathered the bumps better than most as they positioned themselves advantageously for better days ahead. They knew the solution to more innovation, cost savings, increased profitability, organizational growth and more satisfied and loyal customers was right under their noses all along.

Engagement is critical to business success

Gallup engagement chartA wealth of research from the Gallup Organization supports that statement and goes on to validate that engaging your employees or your customers generates up to two-and-a-half times the financial gains than if you didn’t invest in engagement. If you optimize engagement levels in both customers and employees, you can more than double those gains again.

Willis Towers Watson uncovered similar results. Companies with engaged employees enjoy a 19% increase in operating income; without engagement, operating income decreases 30%. (That’s a variance of almost 50% and could well mean the difference between surviving the next downturn — or not.) They also found a 15% improvement in engagement levels led to a 2% improvement in operating margins — an advantage few leaders can afford to ignore.

Just about everything a company needs to do to succeed is driven by the people connected with your organization – your customers, suppliers, and most especially your employees. Each one of those groups can contribute to your success – or detract from it – and there’s no escaping the fact that your organization’s future depends on how well you engage them behind your corporate objectives.

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Increasing employee commitment levels can lead to a 57% improvement in their discretionary effort, which can then lead to a 20% improvement in overall performance, according to the Corporate Leadership Council.

The power of an engaged workforce

The power of an engaged workforce is so strong that Quantum Workplace has discovered a significant relationship between employee engagement levels and economic indicators like unemployment rates, the Dow, consumer sentiment, and even fuel prices.

If you’re still not convinced about the benefits of investing in your employee assets, please consider:

  • 27% of consumers determine your company’s commitment to corporate social responsibility based on your treatment of employees, and 76% make purchasing decisions based on your employee treatment, per the National Consumers League.
  • Willis Towers Watson found that good human capital practices are consistently a leading indicator of corporate financial performance.

Taking action now to more fully engage your employees will help you reinvigorate your organization and recover more quickly from the next, inevitable downturn.

Your employees are your cavalry, and they’re just waiting for you to lead them in charging up the hill to corporate success!

The post appeared in a somewhat different form on OCTanner.com

Named as one of the Ten Best and Brightest Women in the incentive industry and to the Employee Engagement Power 100 list, a Change Maker, Top Idea Maven, and President’s Award winner, Michelle is a highly accomplished international speaker, author, and strategist on performance improvement. A respected authority on leadership, workplace culture, talent and employee engagement, she’s a trusted advisor to many of the world’s most successful organizations and the governments of the United Kingdom and the United States.

Michelle speaks and writes about what she knows first-hand – as a former executive of a Fortune 100 global conglomerate, and as a researcher and strategist. She passionately shares new insights and tools for leaders to confidently, effectively and strategically lead their organizations to success.

Michelle is the Past President of the FORUM for People Performance at Northwestern University and President Emeritus of the Incentive Marketing Association. Michelle was the Founder and Chair of the Editorial Board of Return on Performance Magazine, and has been featured on Fox Television, the BBC, in Fortune, Business Week, Inc. and other global publications, and contributed to the books Bull Market by Seth Godin, Contented Cows Still Give Better Milk, and Social Media Isn’t Social.   

LinkedIn: https://www.linkedin.com/in/michelle-m-smith-cpim-crp

 

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2 Comments on “The ROI of Improving Employee Engagement

  1. Michelle, thanks for your insight into employee engagement.

    Too much effort is spent trying to get employees to be engaged.
    Employee engagement is what employers get in return for doing all things well.
    Doing all things well is very hard work for most of us.

    Empowering a workforce is easy to do; have all executives, managers, and supervisors do their jobs well all of the time. The hard part is getting the executives to do their jobs well, the next hardest part is getting managers to do their jobs well, followed by supervisors doing their jobs well. Employees will be doing their jobs well if everyone above them is doing their jobs well. Look out, employee engagement is about to take hold. Some employers want to skip the executives, managers and supervisor parts and go right to the employees, but that is not how employees get engaged.

    Employees’ lack of engagement starts with the CEO.
    CEOs hire the managers.
    Managers hire the employees.
    Employees don’t hire themselves.

    When there are disengaged or problem employees we need not look beyond managers and executives.
    * Too many employees are in the wrong jobs, i.e., management errors.
    * Too many managers are in the wrong jobs, i.e., executive errors.
    * Too many executives are in the wrong jobs, i.e., CEO errors.
    * Too many managers and executives Reward A hoping for B.
    * Poorly behaving employees are tolerated, i.e., management errors.
    * Poorly behaving managers are tolerated, i.e., executive errors.
    * Poorly behaving executives are tolerated, i.e., CEO errors.
    In other words, we get who we hire and who we promote.

  2. Taking action now to more fully engage your employees will help you reinvigorate your organization and recover more quickly from the next, inevitable downturn.

    Your employees are your cavalry, and they’re just waiting for you to lead them in charging up the hill to corporate success!

    mployees’ lack of engagement starts with the CEO.

    CEOs hire the managers.

    Managers hire the employees.

    Employees don’t hire themselves.

    When there are disengaged or problem

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