Why do you need to calculate your Employee Engagement ROI?

According to Gallup, employee engagement leads to a 20% increase in productivity. Hence, it leads to more profits and success.

Employee engagement is a vital element for the success of the organization. If not, the employees may lose their productivity and efficiency in working at the organization.

But, this is not all. As important as employee retention is, calculating its ROI is a crucial tool too. It helps in focusing on the right direction and right initiatives.

ROI of Employee Engagement and ROI

Employee engagement is synonymous with employee experience and employee satisfaction. Employees that have good working relationships contribute more to the company’s success. It increases their productivity and performance and makes them satisfied at their workplace.

Organizations that have good employee engagement reap the benefits of:

• Increase productivity
• Improve employer loyalty
• Increase profitability and sales
• Increase employee retention
• Decrease in burnout and increase in mental wellness
• Increase customer satisfaction

But, employee engagement should also be seen beyond the sentimental value. It is to dive deeper into what is happening in the organization and how things could improve in the long term.

It is where ROI comes into the scene. It is a critical metric for measuring employee engagement in quantified terms.

According to a study by Gallup, organizations that have high employee engagement ranks perform better in business. Have a look at their statistics:

• Increased customer engagement by 10%
• Improvement in profits by 10%
• Enhanced productivity and sales by 20%
• Decreased turnover by 24%-59%
• Reduced absenteeism by 41%

How to Measure ROI?

An increase in employee engagement leads to:

• Higher employee productivity
• Lower employee turnover
• Higher revenue per employee
• Lower absenteeism
• Higher customer satisfaction

1. Employee productivity: When employees have strong connections with their employers, they enjoy being invested in their job. Hence, they work harder and produce high-quality results. Also, they aren’t hesitant to collaborate with their colleagues on different projects.
   But, a bad workplace can increase the level of stress and burnout among the employees.
2. Employee turnover: Employee turnover is expensive. Of course, the reasons for employees resigning could be many. But, when it is increasing, it could mean cultural problems that are linked to engagement.
   When the employees are engaged, chances are that they are satisfied and loyal to their jobs. And hence, would likely stay for a longer period. Employees are the long-term investment of the organization. Retaining them saves both money and time.
3. Revenue per employee: Increase in employee engagement > Increase in productivity > Increase in revenue.
   To break it down further, employee engagement decreases the turnover rate and drives employee output. Hence, this leads to an increase in return each person generates.

Also, engaging and proper internal communication and activities result in enhanced motivation levels. As a result, It contributes to the sense of purpose and alignment with the business.

Revenue per employee data will help in reflecting the ROI of employee engagement.

1. Employee absenteeism: Absenteeism is the term used to describe employees who don’t show up to work. It could be either intentional or unintentional. More the employee absenteeism, the more it affects the productivity of the organization.
   The engaged employees will be committed to their job and would not find excuses for not showing up to the work. Hence, reducing absenteeism and saving lots of resources and money of the organization.
2. Customer satisfaction: When your organization has a solid customer base, it leads to stable revenue in the longer run. And it comes, when there is a sense of belonging for employees at the workplace. It let them be passionate and take ownership of their work. It results in meeting the demands of customers even the challenging ones.
   And believe it or not, customers can sense what’s going on in the organization by looking at the attitude of the employees.

Hence, an increase in employee engagement results in customers getting connected with the brand’s emotions.

HuddleUp and ROI of Employee Engagement

Measuring ROI is critical but it is a tedious process. To smoothen up this whole task, HuddleUp is here to help you to measure your employee engagement.

With the help of custom surveys, 1:1 meetings, pulse surveys, and feedback, you can identify the rise and downfall of the organization. You can understand what’s working at your organization and what are your weak points.

To know more about HuddleUp, click here!

In a Nutshell…

The right approach for any successful organization is building up a culture of engagement. This lets employees know that they are part of the organization and contribute well.

But, this can only be achieved when you measure employee engagement ROI. It will help in understanding the direct relationship between employee engagement and the success of the business. What resources are further required and what can be eliminated to create an engagement culture in the organization.