The ROI of Employee Engagement: 7 Stats You Need to Know

It’s wisdom practically as old as the hills: always treat your employees as well as you want them to treat your best customers. And when it comes to ROI, employee engagement is critical in driving success. 

It's difficult, if not impossible, for an organization to achieve success without the backing of a dedicated team of employees. Employee engagement is particularly relevant for companies with a large group of frontline staff. Your customers are, after all, human, and people connect with people, not businesses.

Author and entrepreneur Kevin Kruse describes employee engagement as the emotional commitment an employee has to an organization and its goals. When employees are engaged, Kruse says, they work on behalf of your organization’s goals and use discretionary effort.

Additionally, when your employees are engaged, they are more productive, exude a positive attitude and take an interest in your organization’s success. But if you are going to devote time and resources to employee engagement, what will your return on investment be?

Employee Engagement and Your Bottom Line

An engaged workforce can truly impact and drive revenue. Take a look at these quick stats that demonstrate how organizations have realized the ROI of employee engagement.

1. Organizations with engaged employees outperform those with low employee engagement by 202%.
   
   
2. Three-fourths of employees that work for companies with financial performance that is significantly above average are moderately or highly engaged.
   
   
3. As of May 2016, the 32.7% of U.S. workers are considered to be engaged in their jobs. (Gallup).
   
   
4. Research revealed engaged companies have five times higher shareholder returns over five years (Kenexa).
   
   
5. According to another 2016 Gallup meta-analysis study of over one million employees working for 230 companies in 49 different industries, those businesses with employee engagement scores within the top quartile of Gallup’s database have 70% fewer safety incidents than those in the bottom quartile.
   
   
6. A 2015 SHRM study found 70% of surveyed employees ranked being empowered to take action on the job when a problem or opportunity presented itself as an important component of their engagement.
   
   
7. According to research conducted by Towers Perrin, companies with engaged workers have 6% higher net profit margins

3 Tips to Start Building Employee ROI Through Engagement

Though the drivers vary from industry to industry and person to person, there are certain factors that affect employee engagement and, consequently, employee ROI in most organizations. Just as you expect a return on the investment that you make in your employees, your employees will invest their efforts and time in your organization if they expect a reward.

Employers with the most employee engagement create a well-defined and intentional culture which values the opinions of all of its employees, appreciates their efforts and fosters open communication.

• Listen up: As companies like Amazon have discovered, listening can pay off quite well. If you want to engage your employees, it’s important to provide them with an outlet to share their opinions. This doesn’t mean that they must be involved in every high-level decision, however allowing employees to give feedback doesn’t just allow them to feel more a part of the company.
  
  
• Thank them: Organizations with engaged employees thank them for their contributions. Appreciation can be shown through monetary rewards, or recognition events or simply by saying “thanks.” Employees feel appreciated when they understand how their contributions support the goals of their employer.
  
  
• Keep the lines of communication open: Communicating openly, expressing expectations clearly and encouraging feedback helps employees to feel like they are part of a team.

Technology is another employee engagement tool that should not be overlooked. Companies now have powerful options at their disposal that can help them to target employees that fit in well in specific environments and will excel in a frontline position.

The first step to creating a truly engaged worforce is to find, hire, and keep the right talent. By utilizing data-driven processes to bring in talent that will enhance a positive company culture, you can improve the overall engagement of your team. Learn more about how you can build a workforce that works by downloading your free copy of the whitepaper below.