Posts Tagged ‘profits margins’

The Link Between Employee Engagement and Profit Margins

Monday, July 16th, 2012

Recently, Towers Watson released a comprehensive study on employee engagement. The study surveyed 32,000 workers, 1,000 of whom were Canadian. The results of the study are eye-opening, to say the least.

The most startling figure from the study finds that companies that scored high in employee engagement scored three times higher in profit margins. Did you read that correctly? Three times higher in profit margins! This figure can be explained by many of the other findings in the study, such as that 95 percent of highly engaged Canadian employees feel they have the necessary tools and resources to achieve exceptional work performance (compared to a mere 20 percent of disengaged Canadian employees), that 97 percent of highly engaged Canadian employees feel that they have the ability to sustain energy throughout the workday (compared to 32 percent of disengaged Canadian employees), and that 99 percent of highly engaged Canadian employees feel a sense of personal accomplishment through their work (compared to 33 percent of disengaged Canadian employees).

What this study suggests is that businesspeople should adjust their profit paradigms. Most businesspeople respond to downward shifts in the economy by making cuts, which generally requires fewer people to do more work for the same pay, leading to stress and frustration. But if this study’s findings offer any lessons, it’s that cuts likely lead to disengagement, which leads to lower corporate profits. If businesspeople instead focus on employee engagement, the cuts may not be necessary in the first place. Happy workers are productive workers, and productive workers make companies profitable, even in times of economic uncertainty. So, what are you waiting for? Focus on employee engagement and buy pants with bigger pockets to store the return on your efforts!

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