In any organization, employees can be divided into three categories: engaged, not engaged and actively disengaged. Engaged employees show high enthusiasm, innovation, and performance. Disengaged employees equate their job to receiving a monthly paycheck and are indifferent to their company’s mission and success. In other words, they most likely would be happy working somewhere else. As such, they often and sometimes quite loudly voice their daily complaints about the job. Dissent in the workplace costs a business in time, money, productivity, and future opportunity.
On 78% of the companies providing a documented employee engagement strategy, a full 50% have benefited from measurable improvements. Maritz Motivation
Employee engagement strategies encompass a wide range of behaviours, activities and benefits that help make the office a better place both for the employees and the employer. From active listening, to lunch and learns and meaningful employee perks, Employee Engagement strategies are proven to drive very positive results in terms of productivity, profitability, and customer experience, to name only a few. Almost ⅔ of companies which have built an employee engagement strategy have measured clear improvement of their business’ bottom line.
72% of small business employees say that an improvement in benefits offerings would make them a happier employee. 2017 Aflac Happiness Report
No matter the enterprise's size, Employee Engagement is every company’s business. A large majority of small business employees agree that they would be happier employees if their companies improved their benefits. This fact cannot be overlooked as happy employees are proven to be more productive. Specifically designed for small to medium-sized companies, Applauz Recognition makes it finally possible for them to properly engage, reward and retain their most valuable employees.
Employee Disengagement costs somewhere between $450 - $550 billion each year. Gallup
This almost unbelievable figure only applies to the U.S. market, so you can imagine how much money is wasted worldwide due to employee disengagement… Perhaps calculating the cost of employee disengagement could help you better grasp the extent of the problem. Gallup found that on average, 17.2% of an organization’s workforce is actively disengaged; and that an actively disengaged employee who makes $60 000 a year costs their company $20 400 a year.
Let’s take a concrete example. You run a 100-employees small business, around 17 of your employees are actively disengaged. If your workforce makes on average $60 000 a year, each disengaged employees costs you $20 400 on average (that is 34% of their salary, $60 000 X 0.34).
That means that your disengaged employees (17.2 X $20 400) cost YOU nothing less than $350.880 per year. That’s a lot of money, especially for a small business.
The question might as well be: How does Employee Engagement does NOT affect your business? Employee Engagement is as vital to your company as blood supply is to your body. If one aspect of your business is neglected, whether it is customer experience or productivity, your entire business’ bottom line will suffer.
This Gallup’s research clearly shows that Employee Engagement does affect all key business outcomes.
It comes as no surprise that increasing annual revenue is any company’s top priority. Whether a company opts to increase customers, its transaction size or decides to raise its prices, the success of any of these methods highly depends on Employee Engagement. It is proven that companies with higher Employee Engagement levels see significant improvement of their annual revenue.
Employee Engagement skeptics tend to mock Employee Engagement for being an urban myth. But this figure clearly shows how much a business can gain from an effective Employee Engagement program. Profit, the net income of the business, can significantly improve thanks to an Employee Engagement program. If you do the maths, the benefits of an Employee Engagement program look almost too good to be true. Let’s imagine a small business with a workforce of 50 employees which has built a successful Employee Engagement program for 5 years. Over this relatively short period of time, the said company would have saved nothing less than… $600 000 thanks to its Employee Engagement program only!
202%! This is worth repeating! The success of any company depends on its level of performance in the long run. You might think you can neglect Employee Engagement when starting a new company because the excitement of a new journey might already be a sufficient motivation for your workforce. But this excitement is per definition unsustainable and will ultimately fade away. If you want to remain in the game, your company needs to maintain high levels of performance that only Employee Engagement can provide viably.
If more than ⅓ of employees consider that the lack of recognition they get at their workplace negatively impacts their productivity, it is quite easy to imagine the tremendous consequences this can have on their company’s bottom line. A decrease in employee productivity is inevitably followed by a decrease in profitability.
No business is viable if it fails to retain its customers. The relationship between a company and its customers is pretty much like any other relationship. If your friends don’t show you any support and are not willing to make things easier for you, you’re not likely to remain close friends for a long time. The same goes for businesses and their customers. Companies with high levels of Employee Engagement see extremely significant improvements in terms of customer service, satisfaction and loyalty. That’s because engaged employees believe in their company’s mission and are deeply dedicated to its success.
Peer-to-peer recognition is a great way to reduce employee turnover, increase morale and customer satisfaction. Employee Engagement programs like Applauz offer companies the possibility to increase peer-to-peer recognition, which is proven to drive positive results in terms of customer satisfaction. If almost half the companies that have used peer-to-peer recognition have seen better customer satisfaction, it’s definitely worth a try!
Engaged employees tend to take less sick days. Not only are they more productive when they work, but they also are less likely to call in sick (and when they do, they really are). Absenteeism can be a real financial burden and negatively affect your company’s bottom line in the long run.
This figure confirms that Employee Engagement does reduce absenteeism and ultimately helps companies save money. As you have already guessed, when absenteeism decreases, productivity increases. That’s another benefit of building an engagement program!
Lowering the turnover rate, that is the percentage of employees leaving a company within a certain period of time, is one of the top challenges of any company. No wonder why it is when you see these figures. Most employees who leave their jobs are disengaged employees and the cost of their disengagement goes much further than their lack of productivity when they were still part of your company. When they leave, it can cost you more than twice as much as their annual salary simply to find them a viable replacement.
Let’s take another concrete example here. If your company employs an employee for an annual salary of $60 000, it can cost you up to $127 800 simply to replace that leaving employee. That’s another reason why employee engagement, by making employees more loyal and dedicated to your business, can help you save money and improve your company’s bottom line.
Now that you know how much Employee Engagement can do for your business, you’re probably wondering how you can calculate the return on investment of an Employee Engagement program. For you to do this and evaluate how much money you can save thanks to an Employee Engagement program, fill out these simple tables with the help of your HR representative:
Done? Great! Now let’s fill out the table below:
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