Is Engagement Making You a Profit or Loss?

The Bottom Line

OK, frustrated proving that engagement has a positive impact to your organisation’s bottom line? A Strategic Human Resource Management approach will help.

Here’s one to chat about with your bean counters – Engage-onomics: The economics of engagement 101

HR Can Be a Profit Centre

HR is typically seen as a cost centre. “Employee engagement initiatives are a nice to do and can sap up valuable budget” you might sense commonly from ill-informed bean counters and leaders.

But interestingly, there is no line in an organisation’s P/L statement for increases in productivity and performance (generated by employee engagement and motivation) of it’s company’s biggest investment – its workforce!

Maximising Your Biggest Asset – Your People

Have you ever worked out the total salary spend for your organisation?  How many million dollars a year is it?

What is your organisation doing? At worst, are they protecting or insuring the stable performance of its most valuable resource – your people? At best, are they maximising the productivity and motivation of that asset through engagement?

Leveraging an extra few % from your people through improved retention strategies can add hundreds of thousands, if not millions of dollars to your bottom line profitability.

The bummer is, all the good work done by HR isn’t reported in the P/L as a profit centre.  Ripped off or what??!!

Look, We Know That:

  • Employee engagement increases performance, productivity and profitability in organisations. Studies now consistently show that employee engagement and profitability are directly linked.
  • Organisations 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% are rarely profitable, with no return to shareholders.
  • Staff turnover can cost your organisation between one and two times an average employee’s salary in lost productivity, recruitment advertising, interviewing time (you got to love going through 300 resumes) and retraining costs.
  • For an average company of 1000 employees, assuming and average salary of $60,000 with 20% turnover, this equates to over $14 million dollars annually in lost productivity.


Get Your FREE People Glue Extract

As a way of staying thanks for being part of our Life by Design community we are releasing an extract of our People Glue book. 48 pages of thought provoking content on how to change the landscape of employee engagement as we know it now!

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