Engagement Economics

Having shaken off its intangible mantle, it is now recognised that employee engagement has measurable business outcomes, which can turn HR into a potential profit centre rather than simply the cost centre of times gone by.  Quantifiable success measures include turnover, engagement scores, productivity, customer satisfaction ratings and shareholder returns to name a few.

Companies with an engagement score of 60% or higher have an average five-year shareholder return of more than 20%, while companies with engagement scores of less than 40% usually have a negative return of 10% to shareholders.

For those who don’t have current employee engagement scores, staff turnover is increasingly becoming one of the simplest primary measures. Many corporate analysts suggest turnover can cost your organisation between one and two times an employee’s salary in lost productivity, advertising, recruiting and retraining costs. For an average company of 1000 employees, with 20% turnover, this equates to over $13 million dollars annually in lost productivity. 

Return on Investment: Turnover Calculator

Life by Design works on a return on investment ratio of 10:1.  That is, we aim for organisations to get a return on investment 10 times as much as they invest in employee engagement initiatives.

According to The Gallup Organisation only around 18% of employees are fully engaged, meaning that over 80% of your people are not performing and being as productive as they potentially could be. Put another way, this equates to your workforce being totally engaged in the work they are doing just one day a week.