How Employee Engagement Affects Your Business’s Bottom Line

Think your employees are happy to have a job?

Think that means they’re helping your business grow?

There’s a difference between workers who maintain your business and those who are committed to making it thrive. The latter are more engaged.

By developing a highly engaged workforce, you can keep the talent you have, keep your customers coming back, and keep your company in the black.

Think about that.

Staying power

With job descriptions, interviews, onboarding and training, hiring new employees can be pretty pricey.

That’s why increasing retention is a top priority for most businesses.

See also: What Is Your Bad Hire Really Costing You?

It makes sense, then, for businesses to make boosting employee engagement a pivotal part of their retention efforts.


According to the 2013 Kelly Global Workforce Index, management can play a big part in increasing workforce engagement. In fact, 63 percent of those surveyed said their direct managers had “a significant impact” on job satisfaction and engagement.

When employees were asked what managers could do to improve engagement – beyond more money, better benefits or a promotion – the top three responses were:

  • More training and development opportunities (53%)
  • More clarification of responsibilities, goals and objectives (46%)
  • More transparency in communications (37%)

A solid performance management strategy helps managers address all three of these desired outcomes.

Well-written job descriptions spell out the responsibilities of the position before new hires show up for their first day. Additionally, job descriptions help managers and employees establish clear, relevant performance goals that line up with the company’s objectives.

Through periodic status meetings, employees and managers can track the progress of performance goals and modify when necessary. And when a formal performance review is completed, a development plan can be agreed upon and put in motion.

See also: 5 Steps to Creating Employee Development Plans That Truly Work

Paying it forward

When you build a culture of learning, development and high performance, your employees deliver better products and services. That improves the experience of your customers, prompting them to come back and recommend you to others.

In other words, increased employee engagement leads to increased customer engagement.

Gallup’s 2013 State of the American Workplace report states that companies with engaged employees and engaged customers enjoy a 240 percent jump in performance-related business outcomes compared to those with neither engaged workers nor engaged customers.

The report recommends several ways organizations can better the customer experience, including:

  • Recognizing that everyone – not just front-line employees – plays a part in customer engagement
  • Turning engaged employees into effective brand ambassadors
  • Rewarding those who carry out the brand promise
  • Asking employees to suggest innovative ways to deliver the brand promise

The bottom line

The last domino to fall in the employee engagement conversation is also the biggest: how it increases profitability.

A Towers Perrin-ISR study found a staggering difference between high-engagement and low-engagement companies. Operating margin was 3.74 percent for high-engagement firms versus -2.01 percent for low-engagement firms. Additionally, net profit margin was 2.06 percent for high-engagement companies versus -1.38% for low-engagement companies.

It’s pretty easy to see how more engagement trickles down to the bottom line. Highly engaged employees are more productive, they stick around, they represent the company better, they deliver more to the customer and, ultimately, they provide a greater return on investment.

So stop thinking about employee engagement, and start engaging in it.

Learn more about how to develop highly engaged and productive employees. Download our free e-book, How to Develop a Top-notch Workforce That Will Accelerate Your Business.

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