Company Culture

Employee Engagement ROI: Taking a Long-Term Perspective

By EverwiseJune 7, 2017

Employee engagement used to be viewed as “fluff,” however, is no longer the case. As Patrick Lencioni observed in The Five Dysfunctions of a Team: A Leadership Fable, “Not finance. Not strategy. Not technology. It is teamwork that remains the ultimate competitive advantage, both because it is so powerful and so rare.”

Deloitte has found that CEOs and senior leaders from more than 3,300 businesses across 106 countries agree, identifying “culture & engagement” as the #1 topic on their minds in its 2015 Global Human Capital Trends Report. Despite this widespread focus on engagement, Gallup’s most recent State of the American Workplace reports that 70% of U.S. workers are not engaged at work.

One reason for this could be that leaders often still view engagement spending in the context of the immediate changes and returns they will see from those dollars. Most of that spending seeks to boost survey engagement scores through the introduction of some type of perk. However, this kind of short-term approach more often than not leads to a cycle of temporary improvements followed closely by a drop back to the original low levels.

So some companies are taking a different approach to engagement; one that results in lasting, measurable results.

Looking to the Long-Run for Engagement

The organizations that are enjoying the greatest return on their employees’ engagement are thinking longer-term than their counterparts. Instead of focusing on the engagement scores sitting in front of them, they are taking a broader, deeper look at redesigning the employee experience to create a place where people want to come work each day.

To understand what kind of environment this might look like, the Harvard Business Review interviewed HR, innovation, IT, and diversity executives from a variety of industries and sectors to discover the three environments that matter most to employees: cultural, technological, and physical.

In terms of culture, KPMG has thoughtfully crafted its organizational story and has excelled in helping employees understand the impact their contributions have on each organization. This fosters a feeling of belonging and purpose. LinkedIn hosts internal and external “HR hackathons,” where employees can help break down and rebuild the HR function to be more effective and reflect the work that they really do (and need to do).

In the context of the “physical,” Airbnb constantly experiments with its physical space, testing different layouts and floor plans and providing employees with modest budgets to design and build their conference rooms.

Adobe is an example of a company focusing on all three aspects. It now has a dedicated EVP of customer and employee experience and is investing in real-time employee feedback programs, improved diversity and inclusion efforts, employee access to consumer-grade technologies, and workspaces that will accommodate different work styles.

Long-Term Engagement Yields Returns

The Corporate Leadership Council studied the engagement level of 50,000 employees around the world to determine its direct impact on performance and retention. It found that engaged companies grow profits as much as 3-times faster than their competitors, and their employees are 87% less likely to leave the organization.

The Harvard Business Review found similarly positive correlations to employee engagement. The following organizations investing heavily in overarching employee experience were found, in comparison to their competitors not investing in this area, as:

  • 28x more often among Fast Company’s Most innovative Companies
  • 11.5x more often in Glassdoor’s Best Places to Work
  • 2.1x more often in Forbes’ list of the World’s Most Innovative Companies
  • 4.4x more often in LinkedIn’s list of North America’s Most In-Demand Employers
  • 2x more often in the American Customer Satisfaction Index

They also have four times the average profit and more than twice the average revenue even though they tend to be 25% smaller, indicating higher levels of productivity and innovation.

Implications for Your Organization

The takeaway? Do track metrics in order to understand how your company is doing but don’t place too much attention on specific engagement numbers when crafting your organization’s day-to-day. Instead, take a step back. Focus on people and how they experience life in your organization. Creating metrics that get to the heart of experience and measuring your long-run performance against those metrics will not only empower your people to be better, but will also set your organization apart from the competition for years to come.



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