Is It Worth Engaging Your Employees?

First, it is important to understand that employee engagement is not the same as “employee satisfaction.”

While satisfied employees are nice to have, extensive research in the last 20 years shows that employee engagement is directly related to extra effort. And that extra discretionary effort directly affects productivity and organizational effectiveness. Engagement is also directly correlated to lower voluntary turnover – a large expense and a big impediment to strategic execution.

So from a business perspective, employee engagement has a significant impact on a company’s bottom line. Just look at the statistics. A number of studies* show top quartile versus bottom quartile companies on engagement scores had:

• Profit: 12% higher profits and 19% higher operating incomes
  
  
• Margins: 5.75% pts higher operating margin and 3.44% higher net profit margins
  
  
• Value: 28% greater earnings per share and 8% greater stock price appreciation
  
  
• Productivity: 18% greater productivity, 51% less voluntary turnover, 27% less absenteeism, 62% fewer accidents, and 52% lower inventory shrinkage
  
  
• Customer Satisfaction: 12% higher customer satisfaction

*Harter, et. al., Journal of Applied Psychology (2002); Watson, Wyatt (2004); Globoforce (2005); Towers, Perrin, Global Workforce Study (2007-2008)