Workforce engagement has become more and more of a priority for businesses of all sizes, and with good reason. But what are the financial benefits? Can investing in employee engagement save or even make money?
Engagement increases productivity – A survey conducted by Hay Group, a global management consulting firm, revealed that engaged workforces are 40% more productive than those who are not engaged. When engagement level among employees increases, it increases their productivity which in turn, improves the financial standing of the organisation
Lower employee churn:
Hiring new staff is expensive and takes time. Research suggests that the price-tag of an employee replacement can cost as much as 50 – 60% of his/her annual salary, but the total costs associated with turnover can range from 90 – 200%, according to SHRM. This cost has brought employee retention to the top of the priority list.
When staff are engaged with their company and position, they experience a greater sense of loyalty and safety in their role. Salary aside, a disengaged employee is left with very little incentive to stay with their “team”.
Lower recruitment needs & costs:
An engaged team is one of enthusiasm and understanding of their company goals; meaning your staff is full of candidates for internal promotion, cutting costs on recruitment for managerial and leadership roles.
Offering this experience to your employees can do a lot for your brand, and overall appeal to potential employees. Should a business advocate for an engaged approach to workforce management, in today’s modern age where all work experiences are voiced and compared, their reputation will speak for itself. Good candidates will want to be in an engaging environment.
Increased customer satisfaction:
Links have been shown between employee engagement and customer satisfaction, according to studies conducted by consulting firms and universities – and it makes sense.. When employees are satisfied, they happily serve customers resolving all their queries and doubts. They offer them genuine consultation and guidance, which helps build a long-term relationship with the customer base.
Your bottom line:
Most importantly, how does good employee engagement affect my business’s performance?
From a quick look online you will find a lot of studies on the correlation between employee engagement and performance. Dale Carnegie and MSW did a study of over 1500 employees, and found that companies with engaged employees outperform those without by up to 202%.
Gallup’s 2013 State of the American Workplace report states that companies with engaged employees and engaged customers see a 240% jump in performance-related business outcomes compared to those with neither engaged workers nor engaged customers.
The financial benefits of engaging your employees are apparent, and the good news is that it is a very affordable idea to implement. With some minor business changes and some investment in something as simple as employee apps & mobile technology, I believe the benefits involved will be quick and long-lasting.