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Rule 2 - Understand the benefits of employee engagement

January 17, 2011

Right, we now know more about what employee engagement is and how to define it but why does it matter? It is important to understand the benefits of employee engagement as it means that those involved in the strategy implementations can get on board as they are aware of the potential returns.

Put simply, employee engagement has been found to be highly correlated with performance. There is evidence that improving employee engagement levels across organisations correlates with improving performance.

It is important to highlight the research that has been done to provide support for why employee engagement should be something worth pursuing for all organisations. In the Engaging for Success report, much of the research is digested and the following key results were highlighted.

Gallup surveyed almost 24,000 business units and found that those with bottom quartile employee engagement scores averaged a 31% to 51% employee turnover and interestingly found that they showed 62% more accidents. It was also found that those with employee engagement scores in the top quartile averaged 18% higher productively and 12% higher profitability. Gallup also found that earnings per share was 2.6 times greater than for organisations scoring top quartile employee engagement scores than those with below average scores.

Towers Watson conducted a global survey in 2006 with 664,000 employees over a 12 month period. It was found that there was a ‘significant difference in bottom-line results’ between organisations with higher levels of employee engagement. Interestingly, organisations with higher levels of employee engagement improved 19.2% in their operating income whilst those with lower levels of employee engagement declined by 32.7% during the 12 month period.

It has been found that higher levels of employee engagement are strongly correlated to organisations with higher levels of innovation (CMI, 2007).

The Civil Service has found evidence to suggest that those who perform well in performance appraisals work within departments where there is a high employee engagement score.

Sickness and absenteeism at work is often a cause for concern and can cost the economy millions of pounds. It has been found that employees who are more engaged take an average of 2.69 days sick per year as compared to the disengaged who take around 6.2 days sick.

The list of positive findings for engaged employees is almost endless: 70% of engaged employees have a good understanding of how to meet customer needs compared to 17% of disengaged employees; engaged employees are 87% less likely to leave an organisation than the disengaged; engaged employees positively promote a company’s reputation.

So, it is clear that there are many positive benefits to getting employee engagement right in any organisation. Back to the original question – why does employee engagement it matter? Well, it clearly matters a great deal if you want to increase profit, productivity, performance amongst other things and this is surely what all businesses are striving to achieve?

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