10 Studies Connecting the Effects of Employee Engagement with Key Performance Metrics

Question: As long as everyone is doing their jobs, is rallying your team really worth the effort?

MARK SUSTER, Managing partner, Upfront Ventures shares his answer on Inc.com:

“It’s stating the obvious to say that great teams matter and that cultivating them will drive higher company performance vs. a group of individual contributors. But in my experience, it’s surprising at how little time we as investors and as board members and startups as management teams spend thinking about how to create the best team dynamics.”

Employee engagement is defined as the extent to which employees commit to something or someone in their organization, how hard they work and how long they stay as a result of that commitment. So engagement and connection go hand in hand. And as you’ll see below leveraging your culture as a competitive advantage is simply smart business.Here are 10 reasons to foster a connected and engaged team:

  1. Businesses with more engaged employees have 22- 51% higher productivity (Harter, J.K., Schmidt, F.L., & HayesT.L., Psychology, 2002 Vol. 87, No. 2, John Baldoni, HBR, 2013
  2. Businesses with higher engagement have 9% higher shareholder returns (Towers Watson, 2009)
  3. Companies with the most effective employee communication have 47% higher shareholder returns over the last five years (Towers Watson, 2010)
  4. Engaged employees outperform disengaged employees by 20-28%
    (The Conference Board, 2006)
  5. Organizations with engaged employees showed a 19% increase in operating income over a 12-month period, compared to a 33% decrease in companies with disengaged employees (Towers Perrin, 2008)
  6. Highly engaged employees have less absence days – in average 3,5 days – compared to not engaged employees (Gallup Germany, 2011)
  7. A 5% increase in total employee engagement correlates to a 0.7% increase in operating margin (Towers Perrin 2004 European Talent Survey: Reconnecting with Employees: Attracting, Retaining, and Engaging, Towers Perrin)
  8. Organizations with highly engaged employees achieve twice the annual net income of organizations whose employees lag behind on engagement (The Impact of Employee Engagement – Kenexa)
  9. Highly engaged business units report 48 perecent fewer safety incidents (Gallup, 2013)
  10. Highly engaged business units report 41 percent fewer defects (Gallup, 2013)

And while all of these employer-centric benefits are impressive, it’s equally important to recognize the impact engagement has on employee job satisfaction. In fact, employees with the highest levels of engagement are a whopping 87% less likely to leave the organization, studies show.

Engaged employees are happy employees, so help your team to stay connected, starting today!

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