You’ve been hearing it for years: Highly engaged workplaces grow faster, adapt quicker, and innovate more. You, yourself, understand the value and even the financial gain; however, you have yet to fully convince your senior leadership that employee engagement has financial results. So you need proof points that you can really push to your senior leaders so that they see results not just in theory but with weight they feel in their pockets.
Well.. you’ve hit the jackpot… Quantum Workplace (@QuantumWork) — also our #1 pick for Employee Engagement goodness — conducted a study that gives you the evidence you need to be conﬁdent that employee engagement drives business outcomes. Below are 11 ways you can push the relationship between engagement and ﬁnancial performance. The numbers don’t lie. So don’t hesitate to push it real good the next time you’re ﬁghting the good ﬁght for workplace culture and employee experience.
Oh, and we absolve ourselves of any responsibility for you having Salt-N-Pepa in your head for the rest of the day.
1. Greater Revenue Growth
On average, the companies in the study with the highest engagement experienced 16.29 percentage points higher revenue growth over three years than those with lower engagement.
2. Better Engagement Profiles
In the chart below, you can see how engagement differed between the organizations with 23.45% revenue growth over three years and those with 39.74% revenue growth — nearly 21% more engaged employees in the group with higher growth.
3. Engagement and the Dow
Companies with higher engagement more closely followed the DJIA trend during the last three years. Companies with less growth saw greater declines in engagement, despite the positive trend of the DJIA. For example, from 2011 to 2012, the companies with less growth experienced a 3% drop in engagement, while the DJIA increased 8%.
4. Valued Employees Amplify Revenue
The greatest difference in engagement scores between the two company groups was in the area of feeling valued. Take, for example, this survey item: The leaders of the organization value people as their most important resource.
5. Career Growth Unlocks Revenue
Companies offering employees opportunities for career development are more likely to see additional gains in revenue. See how the two groups of companies compared
on this survey item: I see professional growth and career development opportunities for myself in this organization.
6. Greater Retention, Greater Growth
Highly engaged organizations retain talent. The second greatest difference in engagement category scores between the two company groups was in the area of Retention.* As shown below, the difference in Retention category scores was .48 on a six-point scale.
*The retention category includes four survey items:
1. I would like to be working at this organization one year from today.
2. I see professional growth and career development opportunities
for myself in this organization.
3. I recommend this organization as a great place to work.
4. It would take a lot for me to leave this organization.
7. Trust in Leaders Boosts Growth
The third greatest difference in engagement category scores between the two company groups was in the area of Trust in Senior Leaders. As shown below, the difference in category scores was .47 on a six-point scale.
8. Revenue Growth for Trending Engagement
The study also examined growth differences between companies with positively trending versus negatively trending employee engagement over three years. Those with positively trending engagement experienced 6.8% greater revenue growth.
9. Stock Price Growth
Organizations with the highest level of engagement also experienced 26% greater stock price growth during the past 52 weeks. The chart below illustrates the difference in stock price growth.
10. Quarterly Revenue Growth
Organizations with the highest level of engagement experienced 18% greater quarterly revenue growth during the past 12 months. The chart below illustrates the difference between the two groups of companies.
11. Price to Sales Ratio
Price/sales is a company’s market cap divided by total sales from the past 12 months. The higher the ratio, the stronger the company. Organizations with the highest level of engagement experienced a higher price to sales ratio.
So there you have it. Eleven REAL reasons that show employee engagement DOES have financial results.
Source: 11 Reasons to be BE BULLISH About Employee Engagement Impacting Financial Success, Quantum Workplace