To continue our tradition of showing the realistic results of implementing award programs, I have been blogging on the ROI of several different kinds of incentive programs the second Monday of each month. (The three previous ROI posts have been on online sales incentive programs, online safety incentive programs and wellness programs.) This time around I would like to change gears and take a look at the possibilities of employee engagement programs.
Several studies have been conducted over the past decade to determine what companies with long term success have in common. Many of these studies were summed up in a white paper released by IncentiveCentral.org. The white paper is titled “The Economics of Engagement,” and discussed the link between success and employee engagement. I would like to share some of the facts that the white paper revealed about the impact of employee engagement on an organization’s bottom line.
To begin, the white paper advises, “…employee disengagement is estimated to cost the US economy as much as 350 billion dollars per year in lost productivity, accidents, theft and turnover.” Employee engagement programs are becoming more and more common as companies have found that actively disengaged employees can inhibit long term success. The cost of a disengaged employee is hidden in many intangible expenses such as lower productivity, inferior customer service and decreased loyalty and morale.
Next, I found it interesting to point out that the white paper calculates the number of engaged employees to be only a little over 20 percent of the United States workforce. In fact, 66 percent of all employees are not engaged and a little over 10 percent of the workforce is actively disengaged. Furthermore, in a study on 28 multinational companies (MNC) that took place over 4 years, those with highly engaged employees had more than doubled their stock prices compared to industry averages. Conversely, MNCs identified as having disengaged employees had stock prices that were only 20 percent of the industry averages.
Focusing on engaging employees presents a huge opportunity for companies to increase their bottom line results and long term success. Engaging employees starts with consistently recognizing and rewarding workers for their contributions and loyalty. Depending on the needs of a particular client, employee engagement programs can be developed and implemented relatively quickly and the benefits of instituting such a program can be seen within the first few months of the program. By partnering with recognition award program experts, companies can create and sustain employee engagement in order to achieve long term success.
Be sure to check back next month on December 14th to find out more on the return on investment of employee recognition programs.
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