Financial impact of employee engagement represents the levels of enthusiasm and connection employees have with their organization. It’s a measure of how motivated people are to put in extra effort for their organization, and a sign of how committed they are to their position. There are 3 types of employee engagement:

1. Engaged: This type of employee works with passion and feels a profound connection to the company.
2. Not Engaged: Checked out, sleepwalking through the day, putting in hours instead of energy.
3. Actively Disengaged: Simply put. People who are miserable at their jobs. They actively undermine coworkers and sabotage projects.

Experts say that the engagement, involvement, and satisfaction of the employees should be the biggest concern for organizations. When employees are actively engaged, it can directly affect the productivity and financial standing of the company.

What is the Financial Impact of Employee Engagement?

When it comes to company culture, it’s important to share the same vision across your organization. Are disengaged employees going to share your vision with the same passion engaged employees have for your culture? People that are “putting time, but not energy or passion, into their work” discount the hard work of the engaged 33% of the workforce that is driving your company forward. Disengaged employees are estimated to cost the U.S. between $300 billion to $350 billion, according to a Gallup poll. And, according to a CareerBuilder study, 69% of employers say they’ve been negatively affected by a bad hire in the past year. Forty-one percent believe this cost their organization over $25,000, while 24% said it cost them more than $50,000. In addition, the cost of absenteeism averages about $40 billion per year, and the cost of replacing an employee is 5 times as much as retaining that same employee. Disengaged employees are sleepwalking through the day, but worse than that, they’re potentially costing the company billions. On the other hand, organizations with high employee engagement will derive benefits in addition to happy employees: The stock value has higher earnings per share, and the businesses experience 44% higher profitability, 70% higher productivity, 86% higher customer service ratings, 70% more success in retention, 37% lower absenteeism, and 78% better safety records.

How to Fix the Problem?

It’s great to know how much actively disengaged employees are costing your company. But that only begs the question, how do I fix this?   Here are some tried-and-true methods to do exactly that:

• Have career conversations with your employees. The stats show employees overwhelmingly want to have career conversations with their boss, and yet few bosses do it. Don’t be afraid to have these talks and build career plans for your people.
• Build a culture of learning at your company. LinkedIn research shows the biggest reason employees leave a job is for career development, or lack thereof. Building a culture of learning at your company ensures your people can grow at your organization.
• Work hard to develop great managers. Managers have a tremendous impact on their employees’ experience at your company. Build a robust manager development program to ensure your employees have great bosses.
• Prioritize diversity and inclusion. If a portion of your employees feel unwelcome for any reason, they are going to stop caring about their jobs. Prioritize building a diverse and inclusive organization at all levels, which will improve employee engagement and overall performance.

The Bottom Line

Ultimately, turning employees into engaged employees and ultimate brand ambassadors will leave you with happier customers, increased creativity levels and less sick days taken by your employees. Engaged employees are fundamental to the success of your business. For more information about how the Front Line Leadership Program can transform your organization or for pricing information, fill out a contact form on our contact page.

Sources:
http://theirf.org/research/the-economics-of-engagement/206/ 
https://www.decision-wise.com/show-me-the-money-the-roi-of-employee-engagement/
https://www.fastcompany.com/3009012/the-costs-of-ignoring-employee-engagement