What Is The Real ROI On Employee Engagement?

It is undeniable that employee engagement impacts individual productivity and results, but the real question is: Do companies with an engaged workforce really perform better overall? Or is engagement just another fluffy buzzword created by HR professionals to justify their programs? Researchers have set out to answer this conundrum, and their findings show that there is ROI to be realized from high engagement.


Engagement and Operating Income

In the study, Engaging for Success: Enhancing Performance Through Employee Engagement, British researchers uncovered two key correlations:

  • Organizations with low engagement scores posted an operating income 32.7 percent lower than those with engaged workforces.
  • Companies with high engagement scores posted, on average a 19.2 percent year-over-year growth in operating income.


Engagement’s Impact on Profitability and Retention

profitIn a separate study conducted by the Corporate Leadership Council, researchers studied 50,000 employees around the globe to determine the impact of engagement on performance and retention. The results showed:

  • Companies with engaged workforces grow profits nearly three times faster than competitors.
  • Engaged employees are 87 percent less likely to leave their position for a new opportunity.
  • Productivity is two times higher than competitors.
  • Customers are two times more loyal and spend more money per purchase.


The High Cost of Disengagement

The benefits of high engagement are clearly measurable, but what is the cost of low engagement? According to Gallup:

  • A single, disengaged employee can cost a firm nearly $3,400 for every $10,000 paid out in annual salary.
  • Lost productivity attributed to disengagement costs the US economy nearly $350 billion per year.

Studies show that employee engagement has a direct impact on the bottom line. A highly engaged workforce leads to greater productivity, increased customer loyalty, high operating income, decreased losses and lower turnover. Given these real numbers, can any organization really afford to ignore employee satisfaction?


Strategies for Growing Engagement

If you are ready to start focusing on improving engagement numbers, consider adopting these strategies to ignite passion and purpose in your employees.

  • Invest in employee engagement software to set a baseline and monitor change.
  • Focus on skills development and career growth.
  • Solicit employee feedback on a regular basis.
  • Pay fair market wages.
  • If you can’t raise salaries – or even if you can – add benefits and perks like flex time, casual Fridays, time off for volunteer work, etc.
  • Promote work-life balance.


Engagement Begins with Hiring

While the above strategies will have a strong impact on engagement, a truly engaged workforce is only possible when you hire the right people from day one. Not only do you need to hire for skills, but you must also identify candidates who have the potential to learn and who mesh well with your company culture.


If your HR team is ready to tackle employee engagement, of if you are looking to staff your HR department with top talent who have their finger on the pulse of workforce trends, connect with the professional recruiters at Contemporary Staffing Solutions today. We can help you build the right team to drive your business forward this year.