ROI. Return on Investment. Every business owner and leader on the planet is searching for it. So how does Employee Engagement and ROI fit into the same sentence?
Logic and accountants (no offense to my esteemed finance partners!) will say that the ROI of Employee Engagement is an intangible value. And, yes, they are right it is intangible… except that organizations that have high team member engagement kick the butts of their competitors in revenue, customer satisfaction, productivity, profit and year-over-year growth!
In fact, study after study has proven it. Keller and Price published a study in the June 2011 McKinsey Quarterly that highly engaged cultures outperformed poor engaged cultures by over double in EBITDA, a measure of profitability before a number of accounting adjustments. Kotter and Heskett published a study in 2004 of over 200 organizations over an 11-year period that engaged cultures outperformed the disengaged by a multiplier of 5 in revenue, by 10 times in stock price and by over 700 times in net income.
In past turn around initiatives that I have led, I have seen:
And… the key initiative in the turnaround plan was to fix the culture and engage the team members.
There is an ROI to employee engagement. And for those that say you can cut costs on your way to a sustainable and growth focused future, you should get your resumé cleaned up.