There is a clear quantifiable relationship between employee engagement and successful business metrics, according to a new study.
The study “Employee Engagement: An Economic Value Study” conducted research with over 300 organisations across the UK, the EU, the US and Australia, covering more than 1 million employees.
Business leaders were quizzed about levels of engagement, what they are doing to drive it, and the effects on the wider health and performance of their business.
Data was collected on metrics relating to an employer’s experiences of their employee engagement levels, including retention, productivity, skills development, value alignment, and wellbeing. It also collected data on business performance, such as customer satisfaction, revenue growth, and profitability.
A clear trend emerged: those that have a highly engaged workforce tend to also be those that report that business is booming. The report goes on to identify and explore the employee engagement solutions that drive this growth.
Nick Burns, CEO at Reward Gateway who compiled the study, said: Prioritising and fostering high employee engagement is a strategic necessity for driving superior business results and long-term viability. Companies that fail to nurture an engaged workforce place themselves at a critical disadvantage versus their more invested competitors.
“However, there is no one-size-fits-all approach to boosting engagement. Workforce dynamics are changing as new generations come into the workplace, preferred working patterns are ever-changing, and strategies that work for easy-to-reach desk-based workers can be harder to replicate when communication challenges arise among harder-to-reach workers such as those in retail, manufacturing or transport.”
Cash bonuses only go so far
The research also shows that cash bonuses can be a very effective tool to motivate employees but, when used without consideration, they can fail to live up to their fullest potential.
The research shows that the typical bonus has no significant correlation with any facet of employee engagement or any positive business outcome.
While these are valuable, it may be the case that they have become untethered from any sentiment of appreciation. High performers used to receiving a bonus may begin to see it as part of their overall compensation package, while low performers receive no motivation from it at all.
Nick Burns, CEO at Reward Gateway which compiled the study, said, “I have always been fascinated by the power of people and how they drive business. I’ve also been aware of how difficult it is to really prove that investments in people drive commercial outcomes.
“Investing in employee engagement is not just the right thing to do – it’s a business imperative. There is a distinct link between engaged employees and stronger business performance across key metrics like profitability, growth, retention, and customer satisfaction – and the more valuable and skilled a business requires its staff to be, the stronger this link is.”
Read the full report here.
About the research
Reward Gateway | Edenred commissioned research among 300 organisations, through both online survey research and further in-depth interviews. This research was carried out by independent research consultancy Meridian West, with the support of Reward Gateway | Edenred representatives and was undertaken during Q1 and Q2 2024.
