6 Statistics on Why Engagement is Good for your Bottom Line

We all hear that strong employee engagement is good for your organization, but is it really? Are engagement consultants and workplace improvement organizations just trumping up the value of engagement so they can sell their services to you? Are they telling you how bad your engagement is so they can show you how good their solution is?

Maybe. But how is employee engagement good for your bottom line? Before we consider that, let’s review what employee engagement is.

There are different definitions of engagement, but this is how I currently think of it.

Employee engagement is the competency of being dedicated, committed, and emotionally connected to your work and workplace so you’ll give your best, discretionary effort.

This is the extra effort you can either hold back or put forth. Every day we make decisions whether to give this best effort, and this effort can mean the difference between extraordinary or ordinary, record-breaking or status quo, innovative or average.

In other words, employee engagement may be determining the future of your organization. And if it is, that’s scary because strong engagement doesn’t just happen—it takes time and effort.

Employees don’t fall into motivation and commitment by chance. They don’t just start giving their best effort by default. They don’t connect emotionally to work on a whim. Engagement takes intention on the part of the employee and the organization.

But don’t take my word for it—here are six statistics on why engagement is good for your bottom line. In articles by Quantum Workplaces and Forbes, supported by research from Gallup, organizations with stronger engagement showed the following benefits compared to organizations with weaker engagement:

Lower absenteeism by 41%

Engaged employees show up for work more often than lesser engaged employees. This means getting more work done, being part of work teams more often, and contributing in a deeper way. Sure, engaged employees do take time off, but at a lesser rate than lesser engaged employees.

Greater productivity by 17%

Like we said, engaged employees are willing to give their extra effort. This means working longer, harder, and more efficiently than their lesser engaged counterparts. As an organization, you’re going to get more results from more engaged employees.

Better quality with 40% fewer quality defects

When employees are motivated and connected, they pay more attention to their work. This results in better quality of product with 40% fewer quality defects. A bad product can ruin your reputation and future sales, but high engagement can save you from quality issues.

Better customer service with 13% more in customer sales

Customers spend more money when they have a positive customer service experience. Which type of employee is more likely to provide a positive experience—an engaged one or a disengaged one? You get the point.

Higher sales by 20%

Do you know what extra effort, greater productivity, better customer service, and higher quality all equal? Higher sales. Organizations with enhanced engagement sell more compared to their peers. If you want to increase your revenue, it stands to reason to increase your engagement.

Avoided cost of disengagement

Disengaged employees cost $3,400 per $10,000 of salary per year, per employee. For an annual salary of $50,000, that’s about $16,000. For a salary of $60,000, that’s about $20,000 per year. And the cost goes up when the salary goes up.

Now imagine an organization with the U.S. national engagement average according to Gallup, which is 34%. That means 66% disengaged employees. How much is disengagement costing your organization per employee per year if you’re at the national average?

Now that you’ve heard some statistics, you decide. Is strong employee engagement good for your bottom line?

(Here's another post with 12 Employee Engagement statistics).