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October 9th, 2007
The business case for employee engagement
Defining strategic plans and setting objectives for 2008 are activities that many of us are involved in as we enter the fourth quarter of the year. Once you determine your priorities for next year, the challenge is often to convince your organization’s leadership that your priorities should rise to the top of the many plans with which they are presented.
If employee engagement is on your list of priorities, here are some talking points and statistics that will help you build the business case to convince your leadership of its importance.
You can start by explaining that very few companies have a product or service that is not a commodity. Within six months of getting a new product or service to the marketplace, the competition is right there with something equal or even better. Therefore, the real differentiator for many companies is the productivity or service delivered by their employees.
The statistics below and the documented sources show the financial impact of employee engagement:
- 16% of the US workforce is actively disengaged, costing the US economy upwards of $300 billion in lost productivity.1
- Only 16% of employees worldwide believe engagement levels are high within their organizations.2
- Increasing employee engagement by only 5% can add 2.4% to a business' operating margin; for a $3 billion business, this represents an additional operating profit of $25 million.3
- Employees who are most engaged perform 20% better and are 87% less likely to leave the organization than those who are not engaged.4
Just as business operation executives go to the leadership team armed with the business case to support their strategic plans, communication and HR professionals need to do the same!
Chris Gay
Partner, Bridge Consulting
engagement@melcrum.com
1 The Gallup Organization, Employee Engagement Index Survey (2004)
2 Melcrum, Employee Engagement Survey (2005)
3 Towers Perrin, Talent Report (2004)
4 Corporate Leadership Council, Employee Engagement Study (2005)
5 Development Dimensions International, Benchmarking Study (2005)
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About
Melcrum
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