Kevin Kruse writes on employee engagement for Forbes and The New York Times. Kruse reviewed 29 research studies that show a correlation between engagement and direct business benefit, including improved service, sales, quality, safety, retention, profit and total shareholder returns. Using different industries, different methodologies, and different analytics, the similarity of results is striking.
Employee Engagement Statistics from 29 Research Studies:
- Employees’ customer service productivity scores and their employee engagement scores had a correlation of .51. (Source: The Conference Board)
- Companies with high employee engagement scores had twice the customer loyalty (repeat purchases, recommendations to friends) than companies with average employee engagement levels. (Source: Are They Really ‘On the Job’? Pont)
- Employees with lower engagement are four times more likely to leave their jobs than those who are highly engaged. (Source: Corporate Leadership Council)
- In companies where 60 to 70 percent of employees were engaged, average total shareholder’s return (TSR) stood at 24.2 percent; in companies with only 49 to 60 percent of their employees engaged, TSR fell to 9.1 percent; companies with engagement below 25 percent suffered negative TSR. (Source: Hewitt Research Brief)
- Operating margin was 2.1% in low engagement companies versus 3.75% in high engagement companies; net profit margin was -1.38% in low engagement companies versus 2.06% in high engagement companies. (Source: ISR Report)
- A 5% increase in total employee engagement correlates to a .7% increase in operating margin. (Source: Towers Perrin)
- Study of 23,910 business units compared top quartile and bottom quartile engagement scores and found that those in the top quartile averaged 12% higher profitability and 2.6 times higher earnings per share (EPS), while those in the bottom quartile averaged 31% – 51% more employee turnover. (Source: Gallup)
- Companies with high levels of employee engagement improved 19.2% in operating income while companies with low levels of employee engagement declined 32.7% over the study period. (Source: Towers Perrin-ISR)
- A study of 64 organizations revealed that organizations with highly engaged employees achieve twice the annual net income of organizations whose employees lag behind on engagement. (Source: Kenexa)
- A study conducted across 39 organizations indicates that organizations with highly engaged employees achieve seven times greater 5-year total shareholder return (TSR) than organizations whose employees are less engaged. (Source: Kenexa)
So there you have it. Just a few of the 29 research studies Kruse reviewed and which showed a strong correlation to positive business outcomes. What’s startling about this is that research has shown consistently and repeatedly that employee engagement drives all sorts of desirable business results. Especially in our current environment, where else can you find so much agreement?
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