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You know those company videos or blog posts aimed at showing the world just how great Company X is to work for? Everyone is having fun at work, and they’re smiling while talking about all the perks. We have come to think of this as what an engaged workforce might look like. This Pleasantville snapshot can be a bit misleading.

While it would be great to walk into an office of positive attitudes and buzzing energy, if real engagement isn’t present, that office will soon have an order to vacate on their door. Realizing that there is a difference between satisfied and engaged, is a vital distinction for leaders to establish. Smiles are one part of the engagement equation, and numbers are another. 

Check out what employee engagement can do for productivity and revenue.

Increasing employee engagement investments by 10% can increase profits by $2,400 per employee, per year. (Source: Workplace Research Foundation)

Employers are rapidly catching on to the positive ROI of investing in their employee engagement efforts. According to Bersin and Associates, the current annual employee engagement spend in the US is $720 million. Bersin expects this spend to increase drastically to about $1.5 billion.

Highly engaged employees are 38% more likely to have above-average productivity. (Source: Workplace Research Foundation)

This is a huge part of where we see increased profits coming from. Kevin Kruse (@Kruse) coined a great term to define this ripple effect that employee engagement tends to have on an organization –The Engagement Profit Chain.

Engaged Employees lead to

Higher service, quality, and productivity, which leads to…

Higher customer satisfaction, which leads to…
Increased sales (repeat business and referrals), which leads to…

Higher levels of profit, which leads to…

Higher shareholder returns (i.e., stock price)

Companies that foster engaged brand ambassadors in their workforce report an average of 2.69 sick days taken annually per employee, compared to companies with weak engagement efforts, reporting an average of 6.19 sick days. (Source: Workplace Research Foundation)

Sick days can be very costly in the way of lost productivity and reduced workplace morale. Reducing these costs is just another benefit associated with employee engagement efforts.

NPR’s Health Blog notes that some workers find the absence of other workers a problem during vacation season, because the lack of people’s voices make the normal sounds of the office more apparent, and in turn, more distracting.” -VP and editor at TLNT, John Hollon

Companies with engaged employees, outperform those without by 202%. (Source: Dale Carnegie)

“Employee engagement is the emotional commitment the employee has to the organization and its goals. This emotional commitment means engaged employees actually care about their work and their company. They don’t work just for a paycheck, or just for the next promotion, but work on behalf of the organization’s goals.” – Kevin Kruse

That is what true engagement looks like, not just an office full of happy people. While they aren’t mutually exclusive things, their distinction is totally necessary. Workplace satisfaction will only get an organization so far.

Companies who implement regular employee feedback have turnover rates that are 14.9% lower than for employees who receive no feedback. (Source: Gallup)

This is a big one folks! There are a lot of estimates on the cost of employee turnover, and honestly, that number is going to be different for each employee, location and company. The exact number doesn’t matter as much as the prevention of that cost. What is employee turnover costing you?

Only about 25% of business leaders have an employee engagement strategy. (Source: Dale Carnegie)

There’s another powerful statistic. The benefits of building an engaged workforce are undeniable, yet so many companies haven’t made the investment yet. This disconnect seems like the opportunity for a strong competitive advantage over the other 75% of companies who don’t have a strategy.

The numbers don’t lie, organizations are going to need to invest in employee engagement in order to stay competitive, drive productivity and improve the bottom line. There is a fun, employee-centric side to engagement that is completely necessary. However, let’s not forget about productivity and revenue as major factors and metrics in employee engagement.

(About the Author: Melissa, a marketing professional with over a decade of leadership, has led marketing teams in companies ranging from travel to fundraising to small business apps, always multiplying results with her contagious ambition. And while the pressure of being the marketing mastermind would be more than enough for most pros, Melissa is also VP of Talent Management of Herd Wisdom.)

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Melissa Dawn Photiades

Melissa Dawn Photiades

A marketing professional with over a decade of leadership experience. Melissa has led marketing teams in companies ranging from travel to fundraising to small business apps, always multiplying results with her contagious ambition. And while the pressure of being the marketing mastermind would be more than enough for most pros, Melissa is also VP of Talent Management of Herd Wisdom.
  • Appreciate you sharing all the good stats. One thing I’ve found that helps is to create a really good feedback loop so you hear straight from your team about how engaged they are and how healthy the culture really is. The more frequent and bite size the feedback, the more effective it is in terms of giving leaders insight they can act on that improves culture over time.

    For anyone looking for tools to help in this regard, I’d selfishly recommend a product I developed called LuvoGauge. It’s an anonymous weekly survey that takes less than two minutes for employees to complete. The dashboard gives you insight into how healthy and engaged your employees are, alerting you to problems early and letting you know where to focus more attention and resources. It also includes a compliment and suggestion feature and the question sets are specifically tailored for your industry.

  • Rupesh

    Excellent Article. This is definitely true in the hospitality industry, where guest engagement can make or break a hotel’s reputation. Businesses that provide on-going training and tools almost always become leaders in their market or area.
    Thanks for sharing.

    Rupesh Patel

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  • Excellent post here Melissa,

    One thing that is important here to talk about I think, is the intersection (of lack of intersection) between technology adoption within an organization and employee engagement.

    In our work as an enterprise software company, we often see organizations try and solve their own engagement issues with a piece of technology like an Intranet… this never works.

    Conversely we also organizations falsely diagnosing “employee engagement” as the root cause for intranet adoption failure…. rather than a technology failure/ or an implementation failure.

    Typically technology fails not because of a lack of employee engagement but because the technology chosen is not solving major work problems.

    We are running a webinar on this topic shortly and your readers are welcome to join.

    Thanks again for your article.