In 2009, the UK government commissioned The MacLeod Report, one of the largest studies into employee engagement. It found evidence that improving engagement correlates with improving organisational performance. Several research papers have examined how the performance of engaged employees compares with their disengaged colleagues:
- Engaged employees generate 43% more revenue (Hay Group, 2001)
- 70% of engaged employees have a good understanding of how to meet customer needs; only 17% of disengaged employees say the same (Right Management, 2006).
- 9/10 of the key barriers to the success of change programmes are people-related (PwC, 2000). Engaged employees are more likely to embrace change and suggest new ideas.
- Engaged employees in the UK take an average of 3.5 fewer sick days each year (cited in The MacLeod Report).
- Engaged employees are 87% less likely to leave the organisation, significantly reducing recruitment costs (Corporate Leadership Council, 2004).
“Google would not have been able to innovate as quickly as it has, nor create the products it has in such a short space of time without highly valuing employee engagement.”
Liane Hornsey, Director of People Operations, Google
Higher Productivity, Customer Satisfaction and Profitability
Studies have found a strong correlation between employee engagement and these factors of organisational performance. We’ve highlighted three of these below:
Study 1:
Gallup (2006) examined 23,910 business units and compared top and bottom quartile financial performance and engagement scores. They found that:
Those with engagement scores in the top quartile averaged 12% higher customer advocacy, 18% higher productivity and 12% higher profitability.
Those with engagement scores in the bottom quartile averaged 31-51% higher employee turnover and 62% more accidents.
Study 2:
A Watson Wyatt (2009) study of 115 companies suggested that those with highly engaged employees will perform, in financial terms, four times better than companies with poor levels of engagement.
Study 3:
The Corporate Leadership Council (2008) reported that engaged organisations grew profits as much as three times faster than their competitors. They also found that highly engaged organisations have the potential to reduce staff turnover by 87%.
“There are only three measurements that tell you nearly everything you need to know about your organization’s overall performance: employee engagement, customer satisfaction, and cash flow… It goes without saying that no company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.”
Jack Welch, former CEO of GE