The impact of engagement on profitability

If employees feel engaged, they generally feel empowered to perform better. To quote Mark Tenney[6], “while there are many factors that can and do affect an organization’s financial performance, employee engagement is probably the factor that has the biggest impact on an organization’s profitability and, by extension, its future success.” This is because employee influences a wide variety of factors including a reduction in workplace accidents, reduced absenteeism, greater sense of well-being, higher employee retention and increased customer satisfaction levels. All of which constitute huge potential sources of cost reduction and/or increased revenue.

Positive recognition should therefore form a major component of every work culture as it creates both a sense of trust and a sense of belonging in employees. Both factors have been shown to be vitally important levers of employee engagement. They also tie into the importance of the human need to be able to form meaningful relationships both in a professional and private context. If a company actively supports employee well-being through recognition, empowerment and support, it will reap benefits in the form of increased loyalty and better performance levels, especially if workers believe that their managers are taking a genuine interest in their welfare. According to Naz Beheshti at Forbes[7], employees who feel valued are 4.6 times more likely to feel empowered and to perform better.

Even if current engagement levels are low, once employees recognized that genuine measures are being taken to identify and remedy the root causes of disengagement, they are likely to welcome such changes and identify with the new measures. Thus, a win-win situation can be created for both the company and its employees. To quote Simon Sinek, “If you hire people just because they can do a job, they’ll work for money. But if you hire people, who believe what you believe, they’ll work for you with blood, sweat and tears”