No Longer a Theory – Research Shows Employee Engagement Directly Linked to Profitability

It is now a proven fact: Engaged employees outperform their non-engaged coworkers. Once viewed with some skepticism, that statement is now widely accepted as fact, thanks to significant published research over the last decade that validates the quantifiable relationship between levels of employee engagement and financial performance. A recent Towers Watson survey found that operating margins were 3 times higher in companies with high sustainable employee engagement than companies with low employee engagement.

What do we mean by Employee Engagement? Employees are engaged when they speak positively about the organization to coworkers, potential employees and customers, and when they have an intense desire to be a member of the organization and exert extra effort and are dedicated to doing the very best job possible to contribute to the organization’s business success. In North America, it is estimated that two thirds of employees on average are not engaged at the proper level.

What are the key drivers of Employee Engagement? By understanding the drivers, we can undertake very specific actions to improve employee engagement and profitability. In future blogs we will reveal more of these drivers, but for now, let’s look at 3 key drivers of the 30 we have identified.

1. Employees need to be clear on their organization’s direction and how they can contribute to it
2. They need to have clear personal objectives, and
3. They need ongoing coaching and job performance feedback.

In many Best Management Practices training sessions I have facilitated, I have surveyed participants and have found, surprisingly, that, on average, participants indicated their employers were getting only 40-50% of their reservoir of available effort. In other words these managers were not engaged. Why is this happening? The short answer is that companies are not paying enough attention to the drivers of employee engagement and further, don’t understand the link between engagement and profitability.

The good news is that the drivers of employee engagement have always been the staples of good management practice. So, company leaders need to ensure that their managers and supervisors are given the tools they need to increase employee engagement and ultimately organizational profitability.

The TwoGreySuits HR Power Centre is specifically designed to facilitate the implementation of key employee engagement drivers. The HR Basics module provides detailed direction and tools on how to clarify job roles and goals. The Performance Management Module provides detailed, self-administered training approaches to build managerial and supervisory skills in coaching, providing feedback and teamwork. These are only a few examples. The HR Power Centre was built with Employee Engagement in mind. With effective leadership, organizations utilizing the HR Power Centre to its potential will certainly see an increase in Employee Engagement and profitability.