The Financial Case for Employee Engagement

It amazes me that some managers still question the benefits of promoting employee engagement. That, ‘How will this improve the bottom line?’ is still being asked.

So in case you’re one of the remaining few who thinks all of this engagement stuff is just a bunch of fluffy pop-psychology that distracts from the real business, consider this:

A 2013 report by Gartner, the I.T. research and advisory firm, summarized studies from Gallup, Hay Group, and Towers Watson showing that employee engagement has a quantifiable impact on business performance:

Companies with top-quartile engagement scores grew revenues at 2.5 times the rate of bottom-quartile companies

A one-year study showed high-engagement companies grew operating income by 19% and earnings per share by 28%, compared to -32% and -11% for low-engagement companies

Those with engagement scores in the top-quartile showed 12% higher customer advocacy, 18% higher productivity and 12% higher profitability

Of course you can always find counter-examples. Company A treats it’s employees well but performs poorly; Company B treats its employees poorly but performs well. There are many critical factors that drive business results. Yet the correlation between employee engagement and financial performance is (rationally) undeniable.

Can we finally move on?

Your thoughts?


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