HR News & Trends, Talent Management

Getting to the Bottom Line Impact of Employee Engagement

Illustration by www.istockphoto.com

Despite all that has been said or written about employee engagement, there’s still a question that’s hard to get a straight answer to: what’s the actual return on investment (the ROI) of employee engagement, anyway?

It’s a topic that’s tough to get around, or to get a good answer to. That’s why a lot of engagement studies soft-peddle or avoid it altogether, and that’s why this new infographic from the Madison Performance Group (they describe themselves as a “global web-based workforce recognition and employee incentives solution provider”), is interesting because it goes after the elusive issue of employee engagement ROI.

Titled Brand Ambassadors vs. Disengaged Employees, it illustrates the bottom line impact that highly engaged employees (aka, brand ambassadors) can deliver to their employers. And, the data an analysis in the infographic makes the case that, “fostering brand ambassadors through workforce recognition leads to higher employee engagement rates and can positively impact a company’s income and overall market valuation.”

Impacting the bottom line

“Engaged employees who successfully represent the company brand provide a competitive advantage and impact the bottom line – a crucial benefit in today’s competitive global business environment,” said Mike Ryan, Madison Performance Group’s senior vice president of marketing and strategy, in a press release that accompanied the infographic

He added: “Motivated employees are more productive and creative and recognition programs help keep them engaged and positive about their professional contributions to the organizations.”

Yes, engaged and motivated employees ARE more productive, but the big issue is getting a handle on exactly how much more so a highly engaged employee is versus someone else on the staff who isn’t as engaged.

ROI: The Holy Grail of employee engagement

That’s always been the Holy Grail when it comes to measuring engagement, and frankly, I haven’t seen many cases where organizations or studies have gotten a good handle on it.

That’s why this inforgraphic got my attention — because it tries to answer the question, “just how much does employee engagement matter, anyway?”

Take a look for yourself, and let me know what you think with a comment here.

John Hollon is Vice President for Editorial of TLNT.com, and the former Editor of Workforce Management magazine and workforce.com. An award-winning journalist, John has written extensively about HR, talent management, leadership, and smart business practices. Contact him at john@tlnt.com, and follow him on Twitter at http://twitter.com/johnhollon.
  • Lizz Pellet

    this is a great infographic…….  but where are the study numbers to back up the percents?  Charts and Graphs are fantastick, but I would like to ask if they conducted a study or provide the information they used to create teh graphic.  

    • John Hollon

      Lizz: The sources for the information are all listed at the bottom of the inforgraphic with links through to where the material came from. 

      • Lizz Pellet

        Thanks John,

        would you have links to all of these studies?  The information is outstanding and would be a direct reply to the artice in TLNT today: http://t.co/CJsMwHAW 5 reasons CEO’s don’t care about engagement.  If you do have the links, please send or publish.  Thanks, 

  • http://www.amazon.com/Employee-Engagement-2-0-Performance-Real-World/dp/1469996138/ Kevin Kruse

    John, another great article and interesting infographic. I actually am surprised though that people still question the ROI of employee engagement. I thought that’s been beaten to death already!  Kenexa research showing engaged companies return 5x total shareholder return than disengaged ones, Tower Perrin research showing 6% higher profit, lots of studies showing increased sales, quality, etc. Glad Madison is piling on, but really wish people would realize that EE really doesn’t lead to business results!

    Kevin Kruse
    Author, Employee Engagement 2.0
    http://www.KevinKruse.com

  • http://twitter.com/joeosheauk Joe O’Shea

    The issue with proving the ROI on engagement is causality. Better business performance can be the cause of engagement, as well as an effect.
    The big challenge with ROI is isolating the impact of engagement activity. Attributing outcomes like increased shareholder return and customer satisfaction to employee engagement is a simplification that ignores multiple external factors and variables.
    While it is interesting and creatively presented, I’m afraid this infographic does very little to advance the ROI debate. If anything, combining data and disparate findings from multiple (vaguely referenced) sources undermines the case.

    • http://tpoyc.net/DiSCProfile.html Dallas DiSC Profiler

      Fair point, but the question of causality is ubiquitous with all business data and decisions.  But as more of these statistics are accumulated over time and a variety of circumstances, they will become more persuasive in the aggregate.  And we’re hearing an increasing number of accounts from senior management and line-of-business executives (i.e., not just the HR/training folks running the programs) about Employee Engagement successes — these are very compelling.