Employee Engagement ROI

Employee engagement ROI is the return on investment that employers receive after investing in employee engagement. Engagement influences motivation, productivity, retention, happiness, and satisfaction, so the ROI of investing in it can be great.

Identify Key Metrics: Define the metrics that will indicate improved engagement. This can include employee turnover rate, employee productivity, customer satisfaction, revenue per employee, and more. 
Establish Baseline Data: Collect baseline data for the identified metrics to have a point of comparison to measure changes.
Implement Engagement Strategies: Use initiatives aimed at employee engagement like training and development programs, recognition and rewards systems, and wellness programs. 
Track and Measure Changes: After implementation, compare the data to your baseline to find any improvements. You could use performance management systems, surveys, or feedback tools to find changes. 
Calculate Financial Impact: Change the metrics into financial numbers. This could include reduced turnover calculated from the cost savings by decreasing hiring and training expenses. It could also include increased productivity, which is calculated by estimating the additional revenue generated from improved employee performance.

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What is the ROI of employee engagement?

The ROI of employee engagement is significant. Businesses with a high number of engaged employees are 17% more productive and 21% more profitable. By investing in employee engagement programs, companies can create a culture of appreciation, increase employee satisfaction, and ultimately improve their bottom line. 

Are engaged employees 21% more profitable?

According to research conducted by Gallup, engaged employees are 21% more profitable. Gallup found that organizations with higher employee engagement saw more profitability, productivity, and customer satisfaction. Engaged employees tend to be more committed, motivated, and productive, which translates into better overall performance for the company.

Best Practices

Best practices

What is a good employee engagement rate?

A good engagement rate can vary depending on the industry you are in. It can also depend on company size and organizational goals. A general range for a good employee engagement rate ranges between 60% to 70%. Consistently high employee engagement rates tend to correlate with better business performance. 

To learn more about employee engagement ROI, see our blog post Drivers of Employee Engagement ROI

What are the 5 C's of employee engagement?

The 5 C’s of employee engagement are a framework used for maintaining high levels of employee engagement. The 5 C’s include: 

  • Clarity
  • Confidence
  • Control
  • Collaboration
  • Contribution

The 5 C’s are based around providing clear communication, building a supportive environment, empowering decision-making, fostering teamwork, and recognizing employees' efforts. This framework helps create a connected and committed workforce to improve employee engagement ROI.

How does employee engagement and ROI affect the bottom line?

Engaged employees are more productive, innovative, motivated, loyal, and committed to their work. When employees feel appreciated and recognized, they are more likely to go above and beyond to deliver exceptional results. By investing in employee engagement, companies can lower turnover rates and reduce the cost of recruitment and training. Ultimately, employee engagement is the glue that holds a productive workforce together.

Learn more about what Awardco can do for your employee engagement ROI. Schedule a demo with one of our team members today!

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