5 Reasons Why Employee Engagement Affects Company Growth
Many companies in the US struggle with retaining and attracting top talent. In fact, according to the Bureau of Labor Statistics, the average employee turnover rate in the US stands at 44.3% as of 2019 (a steady increase of about 4% since 2014). This alarming figure indicates that a lot of these employers aren’t putting enough emphasis on employee engagement.
After all, at the end of the day, a company’s ability to succeed or scale, largely depends on how engaged its workforce is.
Employers can engage their workers using different tactics, with the main ones being:
- Offering top-of-the-line employee benefits
- Providing constructive feedback (ideally using an employee performance plan)
- Investing in team-building activities
With the right combination of engagement tactics, you can improve workplace morale, raise satisfaction levels, and ultimately, grow your business.
Continue reading to learn 5 reasons why employee engagement can directly impact the scalability of any company.
1. Employee Engagement Increases Productivity
Engaged employees are emotionally invested in their jobs.
This means that they’re more likely to strive to go the extra mile, even when it’s not expected of them, which ultimately results in higher productivity on their part, compared to employees who are disengaged.
This is backed by statistics.
According to a Gallup poll, engaged employees were found to be 21% more productive than their disengaged peers.
Employee productivity is one of the few direct factors that are linked to any company’s success, regardless of the nature of business, the industry, or the geographical region.
At the end of the day, it’s productivity that drives business.
Ideally, that productivity should stem from high employee engagement.
By having employees who believe in your company’s vision, understanding their roles within the company, and most importantly, going all out on fulfilling those roles, you can grow your business with ease.
2. Employee Engagement Results in Higher Retention Rate
As discussed earlier, employee retention is becoming a serious problem for US employers.
Compared to the rest of the world, the US has one of the highest employee turnover rates.
In fact, according to a 2018 survey, more than 80% of workers were either actively looking for new jobs, or were passively open to them.
There could be a number of reasons for this, but the most common one is a lack of employee engagement.
The one and only way to guarantee that your top talent sticks around, is by making active efforts to engage your workforce.
Considering that the average cost of hiring an employee is $4,000, recruiting new talent every other month can really take its toll on the company’s growth.
With a proper employee engagement strategy, one that ensures the workforce feels appreciated and well-compensated, an employer can dodge this problem.
3. Engaged Teams Can Make More Profit
Let’s face it, profit is what determines the true success of any organization.
A 2017 Gallup report revealed something rather interesting about employee engagement.
According to the report, highly engaged teams yield 21% higher profits than their less engaged counterparts.
With that in mind, it’s safe to conclude that engagement can have a direct impact on how much cash flows into the company.
Engaged employees are, by default, internally-satisfied, and that reflects on how they perform at work.
Apart from going above and beyond the call of duty, they’re also highly motivated to learn and excel in their careers, which is beneficial for their employers in the long-run.
All successful companies understand this link, and therefore, make employee engagement a major part of their business strategies.
4. It Ensures Customer Satisfaction
Customer satisfaction is crucial to any company’s success.
As per a survey, about 80% of US consumers would spend money on a business, only because of superior customer experience.
However, what does customer satisfaction have to do with employee engagement?
The answer: Everything.
A disengaged employee is usually low on morale, and as a result, views their job as a mere source of income.
Over time, they lose interest, and stop caring about the impact they make, and how their customers feel.
Engaged employees, on the other hand, are more likely to deliver positive experiences to your customers, resulting in higher customer satisfaction.
5. It Can Help Attract Better Talent
Companies that are renowned for keeping their employees satisfied and well-compensated, i.e. engaged, enjoy positive reputations in the industry.
As a result, they become magnets for highly competent candidates.
On top of that, they’re also likely to attract employees that fit well within the company culture, resulting in lower recruitment costs.
All of the above combined, can help the company scale.
Considering all of the above, it’s clear that investing in employee engagement and reducing employee turnover is no longer an option, but a necessity for every company, regardless of the size, the environment it operates in, and the industry standards it follows.
In conclusion, it’s safe to say that the first step towards business growth is engaging your workforce.