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The Question We're All Pondering. How Exactly Does Employee Engagement Affect Revenue?

Understanding the impact of employee engagement on productivity and profitability.

Employee engagement affects revenue. Fact.

When employees are happier and feel more invested in the company they work for, they’re more likely to be productive, provide better customer service and recommend the company to their wider friends, family and network.  Not to mention they’ll enjoy higher job satisfaction and be ready to go above and beyond for the wider company objectives.

With employee engagement growing as an issue in the modern-day workplace, it’s important to ensure you have employees who are engaged in your business, allowing you to reap the positive benefits that will follow.

Thanks to the best-selling author of The Infinite Game*, Simon Sinek, for this apt summary;

simon sinek quote

*Great book btw, highly recommend.

One of the top benefits of having highly engaged employees is increased productivity and increased profitability.

Let’s look at how exactly employee engagement can affect your revenue.

Why Does Employee Engagement Matter?

Employee engagement is vital to a company’s success, and it can have an outrageously large impact on revenue.

Think about it: When employees are engaged and feel a strong connection with their jobs, they work harder and smarter—and that increases their productivity (and in turn, profitability).

They turn up to work reliably (less absenteeism), take greater care in their work (better quality results, better customer service experience and less accidents), and experience a level of higher loyalty to the company (lowers rate of employee turnover).

According to a study by consulting firm Gallup;

  • having a highly engaged workforce leads to 20% higher sales
  • having a highly engaged workforce leads to 21% higher profitability

The study found that “Engaged employees are more present and productive; they are more attuned to the needs of customers; and they are more observant of processes, standards and systems.”

In particular, the engaged teams demonstrated:

  • 41% reduction in absenteeism
  • 17% increase in productivity
  • 59% less turnover in low-turnover organizations, 24% less turnover in high-turnover organizations
  • 10% increase in customer ratings
  • 20% increase in sales

All of these factors, when added together, significantly increased one of the most important metrics for any organisation.....

a 21% boost in profitability.

Del Boy would be proud.

Del Boy millionaires

Better Performing Companies Have Higher Engaged Employees

Hardly surprising [following on from Gallup’s statistics] is research by the Temkin Group, showing that better-performing companies have highly engaged employees.

  • 82% of employees at companies with strong financial results were rated as “highly” or “moderately” engaged
  • compared to only 67% at under-performing companies

AKA - engaged employees are more motivated, work better to deadlines, and deliver better customer experiences leading to higher sales and increased revenue.

They’re also happier in the workplace, less absent and more loyal.

What’s not to like?

So, if the engaged employees are busy driving revenue and profit, what are those ‘disengaged’ employees up to?

Probably costing your company, that’s what 😬

What Are The Costs Of Low Employee Engagement?

Low employee engagement comes with a lot of baggage (read: a lot of costs.)

Fortunately, many of these are avoidable with a little bit of effort put into improving employee engagement.

Here’s how the cost may play out in terms of productivity, quality and reputation for those companies who aren’t addressing employee disengagement in their workplace.

1)    Reduced Productivity

If employees aren’t engaged at work they won’t be as productive as they could be. Gallup states 50% of workers aren’t engaged at work and 13% are actively disengaged—that means only 37% of employees are fully engaged (or actively engaged).

Diving deeper, disengaged employees have a 37% higher rate of absenteeism, 18% lower productivity and 15% lower profitability. Not to mention more errors and little to no enthusiasm.

hr problems

2)    Lower Quality Services

A lack of employee engagement can unhelpfully lead to lower quality products or services.

Lack of effort + lack of care + lack of interest?

That's right; lower quality of services and products.

3)    Lost Customers

The last thing you need is customers or clients witnessing low engagement amongst staff members - scenarios where they have disappointing experiences or bad interactions with unhelpful or disinterested staff members— there’s nothing worse.

Not only are they less likely to come back themselves, but you can bet your life they’ll be out there telling all their friends not to visit you too.

This goes for online customer service as well as in-person experiences.

4)    Higher Staff Turnover Costs

It goes without saying that disengaged workers are more likely to leave for pastures new. And frequently.

High turnover rates within organizations can have a huge impact on business performance.

We all know it takes time and effort to hire new people and train them, whilst existing staff are left trying to pick up the pieces until replacements arrive—this leads to increased stress levels for everyone involved.  Not good.

5)    Reputational Damage

Disengaged employees can create bad PR both inside and outside of your company. Disengagement is annoyingly viral, and before you know it there will be bad feelings, bad attitudes and bad results rife among your staff.

Not only will this impact the mood in camp but disengaged employees can really hurt the external credibility and reputation of a business.

hr problems . funny cat

Bad reputation = less customers = less sales.

For a strong, positive corporate image, you want your employees to be subconsciously taking on the role of company marketing spokesperson, when at work or out of work.

Employee Engagement Leads To Profitability

So, I think we are all in agreement - we want employees to be as engaged as possible in order to increase productivity, profitability, exude positivity and decrease absenteeism & staff turnover.

Improving employee engagement is clearly a key step to achieving business success.

By taking a proactive approach to engage your employees, you’ll be boosting overall profitability in no time!

Check out our annual wellbeing platform if you need a helping hand with your employee engagement.

Our app supercharges motivation and engagement across staff, and you’ll be in good company 😉

“GoJoe is a fantastic digital solution to proactively engage our people no matter where they are.  From their world series events to their health and wellness content, it always gets amazing engagement.”

- PayPal

We get thrown a lot of wellbeing apps. GoJoe is the one we actually use.”

- Employee at PwC


Thanks to Gallup for their research -