“Improving engagement correlates with improving performance”. This is the overriding message & the evidence seems too strong to be ignored. The statistics speak for themselves…
Engagement and …
Operating income. Companies with high levels of employee engagement improved 19.2% in operating income while companies with low levels of employee engagement declined 32.7% over the same period. This is equivalent to 52% difference between companies with highly-engaged employees & companies with low engagement scores. (Towers Perrin ISO 2006)
Profit margin growth. Standard Chartered found that branches with a statistically significant increase in levels of employee engagement (0.2 or more on a scale of five) had a 16% higher profit margin growth than branches with decreased levels of employee engagement. (Standard Chartered Bank)
Earnings per Share (EPS). The rate of growth of EPS for organisations with top quartile engagement scores was 2.6x that of organisations with below-average engagement scores. (Gallup 2006)
Customer advocacy. Companies with top quartile engagement scores averaged 12% higher customer advocacy, 18% higher productivity and 12% higher profitability. (Gallup 2006)
Employee turnover. Companies with bottom quartile engagement scores averaged 31 – 51% more employee turnover, 51% more inventory shrinkage and 62% more accidents. (Gallup 2006)
Creative ideas. 59% of engaged employees say that their job brings out their most creative ideas against only 3% of disengaged employees. (Gallup 2006)
…Impact of engagement deficit
People related issues. Engagement and involvement are critical in managing change at work; 9 out of 10 key barriers to the success of change programmes are people related. (PricewaterhouseCoopers (PwC)).
…Impact on individuals
Motivation & productivity. CMI reported a strong association between motivation and personal productivity levels. >66% managers who reported that they were motivated at work also claimed high productivity levels (defined as more than 90%). Only 15% who were motivated experienced low levels of productivity (defined as less than 70%).
Happiness at work. 86% of engaged employees say they very often feel happy at work, as against 11% of disengaged. 45% of engaged say they get a great deal of their life happiness from work, against 8% of disengaged. (Gallup 2006)
Stress & negative domestic impact. 54% of actively disengaged say that work stress caused them to behave poorly with friends or family members in the previous three months, against 17% of engaged. More alarmingly, 54% of actively disengaged say their work lives are having a negative effect on their physical health, versus 12% of engaged.
Impact on service delivery. 78% of highly engaged public sector staff believes they can have an impact on public services delivery or customer service against only 29% of the disengaged. (Towers Perrin 2007)
Company advocacy. Engaged employees advocate their company or organisation – 67% against only three per cent of the disengaged. 78% would recommend their company’s products of services, against 13% of the disengaged (Gallup 2003).
Public sector employees are less likely to be advocates for their organisation than private sector staff. (IPSOS-MORI 2006). However they were 2x as likely to be advocates if they worked for an ‘excellent’ rated council.
Understanding of how to meet customer needs. 70% engaged employees indicate they have a good understanding of how to meet customer needs; only 17% of non-engaged employees say the same. (Right Management 2006)
Sick days. Engaged employees in theUK take an average of 2.69 sick days per year; the disengaged take 6.19. (Gallup 2003). The CBI reports that sickness absence costs theUK economy £13.4bn a year. (CBI-AXA 2007)
Staff turnover. Engaged employees are 87 per cent less likely to leave the organisation than the disengaged. (Corporate Leadership Council, Corporate Executive Board (2004)) The cost of high turnover among disengaged employees is significant; some estimates put the cost of replacing each employee at equal to annual salary.
All the above statistics are taken from the Macleod Report, ‘Engaging for success: Enhancing performance through employee engagement’ (please note link updated January 2015).