How Engagement Affects Company Profit and Performance

09/07/2016 05:09 pm ET Updated Dec 06, 2017

Lack of engagement isn't only a problem in the corporate world, it is a serious problem that should also be addressed from a national level as well because of the impact it has on our society. This is why so many companies are actively working on culture transformation and one of the most effective ways to accomplish a positive, Thriving Culture is through working actively with employee engagement.

By not having fully engaged employees, a company is simply walking away from significant profits. It's like leaving money on the table that could otherwise be used to help grow the company. Here are some alarming figures that we surfaced:

  • In one global survey, just 21 percent of staff reported that they are fully engaged at their workplace. Professor Gary Hamel of London Business School commented on this, "the other 79 percent may be physically on the job, but they've left their enthusiasm and ingenuity at home."

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  • Only 22 percent of U.S. employees are engaged and thriving. This is a huge waste and also a huge opportunity. If that level of engagement can be increased, then productivity and innovation can rocket. Not only is this possible but it can also be done at a far lower cost than many of the investments that companies engage in to improve their businesses.

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  • The 2013 Gallup report on employee engagement estimates that active disengagement costs between450 billion to550 billion per year--and that is just in the United States only.
  • 70 percent of engaged employees indicate they have a good understanding of how to meet customer needs; only 17 percent of non-engaged employees say the same.
  • 78 percent of engaged employees would recommend their company's products or services, against 13 percent of the disengaged.

Clearly employee engagement makes a big difference on the output and the revenues of a company. There are numerous studies that show how when an employee is engaged--that is, they really enjoy what they do--they will be more productive, feel better about their job, and be a part of the vision for the company.

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Companies that experience high engagement also experience 147 percent higher earnings per share.

When companies successfully engage both their customers and employees, they experience a 240 percent boost in performance-related business outcomes compared with an organization with neither engaged employees nor engaged customers.

In a global report from HR consultancy Tower Perrins in 2006, based on surveys of over 600,000 staff members in a wide range of industries, "Companies with high levels of employee engagement improved 19.2 percent in operating income while companies with low levels of employee engagement declined 32.7 percent over the study period."

"Gallup's analysis suggests that the most successful organizations effectively engage their employees, leading to higher productivity and better financial outcomes. These organiza­tions appear to move the job market in the right direction." There seems to be a significant link between engagement and job creation.

Employees, who are enthusiastic and contributing to moving the company forward, feel a stronger sense of purpose and are more likely to stay longer with an organization. They feel better and are able to contribute on a higher capacity.

The numbers don't lie...employee engagement is a sound business strategy to actively implement.