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How Employee Engagement Affects Your Bottom Line

How Employee Engagement Affects Your Bottom LineSuccessful companies have known for a long time that the key to success with their customers is to engage them and to keep them engaged. Really successful companies know to do the same with their employees. Sure, in a tough economy, good jobs can be difficult to come by, however, that in itself isn’t a good enough motivating force for most employees.

The difference between your employees feeling merely contented rather than being fully engaged can be the difference between your business maintaining the status quo rather than thriving and growing.

If you’re still unsure about whether or not it’s worth the effort to find out how to better engage employees, lets examine how employee engagement affects your company’s success.

Employee Retention

We all know how difficult it can be to attract and retain great employees. The search and onboarding process can be costly. Some research places that figure as high as 50 to 60% of the employee’s annual salary. That figure doesn’t include the cost of orientation, training and reduced productivity during the first few months. When all of the costs associated with turnover are taken into account, the cost can skyrocket up to 200%.[2]

Since employees who don’t feel engaged are far more likely to leave their job than employees who are highly engaged, it becomes clear that making a small investment and figuring out how to engage employees makes sense.


There’s no doubt that engaged staff will result in better productivity. In a comprehensive analysis of the results of 199 research studies that covered 152 companies from 26 countries, a significant difference was found between entities with the top 25% on the engagement scale versus those in the bottom 25% of the scale. Those with lower levels of engagement experienced an 18% drop in productivity compared with those on the higher end of the scale. Additionally, they saw a 60% reduction in quality, as measured by defects in products.[1]

Customer Engagement

Improved employee engagement naturally leads to better customer engagement. No matter what department an employee works in, if they are engaged, they’re more likely to be knowledgeable about your processes, products, and services. Furthermore, they’re more likely to be interested and invested in helping your customers to meet their needs and solve their problems. When you look at it that way, it’s easy to see why companies that are employee-focused are also customer-focused. As Sir Richard Branson famously put it, “Clients don’t come first. Employees come first. If you take care of your employees, they will take care of the clients.”

Other Contributors to the Bottom Line

It probably goes without saying that less engaged employees are more likely to miss work than those who are fully engaged. But are you aware of just how much of a difference it can make? In their own meta-analysis using data from 263 research studies, Gallup found that business units with highly engaged employees had a 37% lower rate of absenteeism than those with less engaged employees.[2]

The same study reveals improved engagement also resulted in 48% fewer safety incidents and 28% less shrinkage.

Of course, understanding that better employee engagement is valuable isn’t enough to boost your bottom line. You need an action plan to find out if engagement really is an issue in your organization and to determine where the gaps may exist.

If improving employee engagement is becoming a priority for you as a means to improve the organization’s overall performance, reach out to us by visiting to find out more and to discover some great workplace improvement ideas.
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