Engage People for Higher Profits
Recent studies and research lend support to the simple fact that happier employees increase productivity. This, in turn, helps drive higher profits. Below, are just a few examples of productive people strategies:
A Gallup study in 2015 reports that 50.8% of the workforce in the US were ‘not engaged’. Furthermore, another 17.2% were ‘actively disengaged’. These employees, while not hostile, did the bare minimum. They made little effort to go the extra mile. Moreover, they were more likely to miss work and resign.
Lack of employee engagement is a global issue. In 2016, Gallup published a report on how Germany is negatively affected by disengaged employees. 84% of employees in the country were considered to be ‘disengaged’ or ‘actively disengaged’. This results in an estimated loss of €75 billion to €99 billion annually from lost productivity.
The Human Capital Institute:
The Human Capital Institute reported the following data relating to employee engagement:
- Fully engaged employees return 120% of their salary in value.
- Engaged employees return 100% of their salary in value.
- Somewhat disengaged employees return 80% of their salary in value.
- Disengaged employees return 60% of their salary in value.
The problem is simple and still, many companies are failing to connect with their workforce.
Other People Strategy Studies:
The Incentive Research Foundation compiled a study on the Cost of Employee Disengagement. In 2010, as much as $350 billion is lost annually to low productivity, theft, accidents and employee turnover in the US alone. By 2017, Mind the Workplace, a study by Mental Health America estimates businesses lose between $450 and $500 billion a year due to low productivity from disengaged employees.
Also in 2010, the University of Pennsylvania researchers affirmed Southwest Airlines founder, Herb Kelleher’s idea that corporate results have a direct correlation to workplace morale. In the study, the team found that the “Top 100 Best Companies to Work for in America” also had a 3.5% higher than average annual returns.
In their employee engagement research, the Corporate Leadership Council found that up to 76% of employees are “up for grabs” in terms of engagement, and could become engaged or disengaged.
Researchers at Dale Carnegie found that up to 69% of disengaged employees are willing to leave their current employer for a 5% pay increase. The good news is that according to the Work Institute, most employee turnovers can be prevented. Up to 75% of turnover cases can be turned around.
The potential financial impact of this could be substantial for your organisation. Simply put, the research proves that more engaged staff equals better profits.
This infographic summarises findings on the impact of engaged and disengaged employees (press image to view in full) :