Boost Your Bottom Line – Engage Your Employees

TrainingZone

Boost Your Bottom Line – Engage Your Employees

By TrainingZone

US researchers have worked out the difference highly engaged employees make to a business’s bottom line when compared to their non-engaged counterparts in other organisations. And the answer is a startling 52 per cent.

The study, carried out by HR research and consulting firm ISR, gathered information from 664,000 employees world-wide and analysed three traditional financial performance measures over a 12-month period, including operating income, net income and earnings per share (EPS).

Companies with highly engaged employees improved their operating income by an average of 19.2 per cent over one year. Those whose employees were not engaged saw an average drop of 32.7 per cent – a gap of 52 per cent.

Other findings include a 13.2 per cent improvement in net income growth over a one-year period for companies with high employee engagement, while seeing a 3.8 per cent decline in net income over the same period for companies with low employee engagement.

Companies with high employee engagement also demonstrated a 27.8 per cent improvement in EPS growth, while companies with low employee engagement reported an 11.2 per cent decline in EPS over the same period.

“Our research continues to show that a well-substantiated relationship exists between employee engagement – the extent to which employees are committed, believe in the values of the company, feel pride in working for their employer, and are motivated to go the extra mile – and business results,” said ISR global research director Patrick Kulesa.

“This data reaffirms the remarkable ability of an engaged workforce to impact a company’s bottom line.”

A previous ISR study of 41 companies over a period of 36 months revealed that the high engagement companies realised a 5.75 per cent difference in operating margin and a 3.44 per cent difference in net profit margin versus the low engagement companies.

“These latest findings are consistent with ISR’s three-year study and demonstrate that both a one-year change and lasting performance gains are obtainable through an engaged workforce,” said Mr Kulesa.