Employee Engagement ROI

employee engagement roi
Return on investment (ROI). Employee engagement may seem expensive, but it has clear ROI. Read on to get details from ElevatePoint.

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With the recent release of Gallup’s “State of the American Workplace” survey, it is a great time to talk about the importance of employee engagement and how it can translate to economic and cultural benefits for your organization. In their latest survey, Gallup interviewed approximately 350,000 business leaders over a 3 year period to learn more about how they are approaching employee engagement and how engaged employees impact the bottom line.

The results, while not surprising, were certainly eye opening. According to Gallup, 70% of employees are not engaged, costing the US economy somewhere in the neighborhood of $450-$550 billion dollars annually in lost productivity. As Gallup CEO Jim Clifton states in the report, “If your company reflects the average in the US, just imagine what poor management and disengagement are costing your bottom line.”

This is not the first time Gallup has tied employee engagement to bottom line organizational success. In a 2012 Gallup conducted analysis on over 1.4 Million employees in their “Engagement at Work” report and similarly found that “Business or work units that score in the top half of their organization in employee engagement have nearly double the odds of success when compared with those in the bottom half.”

For those involved with corporate communications, the direct correlation of employee engagement to bottom line financial success should come as no surprise. Having recently participated in the IABC Employee Engagement Conference held in Denver, Colorado, we heard from corporate communicators the challenge they are having effectively measuring the ROI on their employee engagement efforts and how to tie such efforts to top level organizational performance metrics.

The information below outlines some best practices that we have seen be effective when working to both improve and measure employee engagement efforts.

Understand How ROI Impacts Employee Engagement

content strategy for intranetsWhile many communicators may find this lesson repetitious, it bears repeating the elements which tie employee engagement with financial performance. According to Gallup, employee engagement affects nine performance outcomes. Compared with organizations functioning on the bottom quartile of employee engagement, top quartile organizations have:

  • 21% higher productivity
  • 22% higher profitability
  • 10% higher customer metrics (customer satisfaction)
  • 37% lower absenteeism
  • Between 25%-65% lower turnover
  • 28% less shrinkage
  • 48% fewer safety incidents
  • 41% fewer patient safety incidents
  • 41% fewer quality incidents (defects)

The graph below illustrates the findings:

*Gallup “Engagement at Work” Report

Imagine how your bottom line would be impacted if your employees were 21% more productive! Of course there are many ways to achieve higher employee engagement. From engagement best practices to effective use of technology, corporate communicators should continually assess their efforts in terms of how they relate to an increased level of engagement from employees organizationally.

But how do you know if your efforts are resulting in the type of increased engagement needed to achieve the level of improvements outlined in the Gallup report?

Track Employee Engagement

Central to the conversations that we have had with many corporate communicators is the desire to more effectively track their employee engagement efforts. They require a way to measure the impact of their employee engagement strategy, but seem to regularly come up short in terms of execution on this objective. In our experience, it comes down to a combination of actionable process and an effective use of technology to create a two way communication channel that can truly drive improved employee engagement.

More often than not, corporate communicators today are relying on processes and technology that do not inherently lend themselves to being tracked, so that there is actually something to measure. An excellent example of this is blast emails. The traditional “fire and forget” messaging which is so common in corporate communications today has proven itself to be an ineffective way to engage employees. Emails are often lost in the shuffle and difficult to digest in competition with other priorities in the employee’s inbox. Furthermore, there is often no simple way for readers to respond to the email in a trackable way (such as ratings, likes, shares and comments). This often leads to difficulty in measuring and tracking the effectiveness of such efforts.

Adopting best practices on how to make your messages stick is an excellent first step. Once you are confident in your communication content strategy, finding an effective way to leverage technology solutions that provide the ability to track the level of consumption as well as the effectiveness of your communications is critical. When looking at solutions to assist your employee engagement challenges and goals, make sure to ask about how the solutions facilitate a lasting and two-way communication channel for your messaging as well as how the technology can provide analysis around how your employees are engaging with your communications. If you can’t track it, you can’t measure it.

Include Social Media

mobile phone seeing an intranet with a chatbot driven by AICore to an effective employee engagement strategy are the social elements which open up a two way communication channel, helping to ensure you are truly collaborating and communicating with, and not just to, your employees. As opposed to outdated top-down communication methods, finding the right mix of collaboration in your communications can be a critical element to achieving improved employee engagement. In today’s workforce, social technologies are helping to lead this charge.

Corporate social technologies are evolving to mirror employee’s personal relationships with social technologies outside of the workplace to encourage a more engaged work environment. The benefits that come with an effective use of social technologies closely relate to those outline above.

In addition to the aligned benefits of social technologies with improved employee engagement, integrated social features such as commenting, rating and sharing communications such as news articles can provide additional data points to measure. If you are able to see how many people liked an article or shared a corporate video or commented on a newsletter, imagine how this data would allow you to effectively align future communications with what has worked in the past.

The more you can understand how your employees are interacting with and responding to your communications, the more clearly ROI can be measured. Work with your employees to understand how they would like to be communicated with and integrate social features into that communication stream and process.

Take Employee Engagement Surveys

While process and technology are critical to successful employee engagement, it is important not to forget the most important aspect: the employees themselves. How your employees respond to your corporate communications is constantly changing and therefore it is very important to periodically gauge your employee’s feelings about the current strategy in place.

We have seen the use of surveys be a great way to gain insight into the efficiencies that might be happening in part through your communications. For example, effective communication of organizational safety policies may result in a notable reduction in safety incidents, and therefore cost savings to the business. Surveys provide a good way to ask targeted questions that can contribute to ROI measurement, and have the added benefit of enabling your employees to provide valuable, meaningful input into the process along the way.

Look at Your ROI Holistically

Employee engagement does not happen in a vacuum. Once you determine the employee engagement data points you think are most important to track for your organization, it is important to create a summarized view which ties such efforts to other organizational metrics and performance indicators.

A great way to tackle this effort is to create a ROI calculation tool which can help determine the true impacts of your communications. ROI calculators that can quantify the cost of your team’s efforts around communicating with employees and tie such efforts to related fiscal performance of your organization will paint a clear picture to your leadership about the importance of embracing sustainable efforts to improve employee engagement.

At the end of the day, the more real data you have, the more effective your measurement process. Data shows that employee engagement does lead to an improved bottom line which is a critical metric for any organization. Embrace measurement, because it is with measurement that you can validate your efforts and constantly find ways to improve.

Good luck and happy measuring!

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