Proof That Employee Engagement Matters

According to Deloitte’s Global Human Capital Trends research, 78% of business leaders rate employee retention and engagement urgent or important. To convince the other 22% and reaffirm the believers, below are a few interesting things we have learned about employee engagement over the years. We organized the research into the six buckets below, which are important to all successful businesses.

Service

1) At Saks Fifth Avenue, the luxury retailer based in New York, customers scored higher in customer engagement measures when they were serviced in departments with employees who had high levels of employee engagement. (Source: Society For Human Resource Management)

2) Teams classified as “high performance zone for engagement” had a 37% net promoter score (NPS) versus 10% NPS for teams “outside of high performance zone for engagement.” (Source: Aon Hewitt)

Sales

3) By investing in employee engagement, a Caterpillar dealer earned a 600% return on investment by improving “percent of industry net sales” by 300% as well as other metrics. (Source: Gallup)

Quality

4) Unnamed Fortune 100 manufacturing company reduced quality errors from 5,658 parts per million to 52 parts per million. (Source: DDI)

Safety

5) MolsonCoors, it was found that engaged employees were five times less likely than non-engaged employees to have a safety incident and seven times less likely to have a lost-time safety incident. (Source: Society For Human Resource Management)

6) Study of 23,910 business units compared top quartile and bottom quartile engagement scores and found that those in the bottom quartile averaged 62% more accidents. (Source: Gallup)

Retention and Absenteeism

7) Unnamed Fortune 100 manufacturing company reduced turnover from 14.5% to 4.1%, while absenteeism dropped from 8% to 4.8%. (Source: DDI)

Sales, Profit, and Total Shareholder Returns

8) In companies where 60% to 70% of employees were engaged, average total shareholder’s return (TSR) stood at 24.2%; in companies with only 49% to 60% of their employees engaged, TSR fell to 9.1%; companies with engagement below 25% suffered negative TSR. (Source: Hewitt Associates)