The ROI of Employee Engagement


As Seen in CFO Studio Magazine Q3 2016 Issue


A workplace culture that is perceived as positive and vibrant has proven financial benefits. A Chandler Macleod study, “Shaping Organisational Culture for Improved Business Performance,” quotes 2013 research from CareerBuilder revealing that 73 percent of candidates interviewed considered a slightly lower-paying job in a company if their friend said it was a great place to work.

The same research also showed that prospective employees were more attracted to a company that had a reputation as a great place to work over factors that include the company’s reputation for great products, services, and people, or even its reputation for being prestigious. An organization that is recognized as a desirable place to work provides an advantage in attracting and retaining talent.

Gallup’s 2013 “State of the American Workplace” study estimates that active disengagement costs the United States $450 billion to $550 billion per year. These alarming figures reinforce the importance of keeping employees loyal and engaged. Some forward-looking corporate leaders are doing this by using workplace design to communicate corporate culture and brand values.

“Fully Engaged,” a report released by  Strategic Consulting, defines engaged workers by the effort they bring to their work practice. These employees develop a connection to their organization, and this makes them more likely to develop innovative practices that could result in competitive advantages for the company. Greater engagement not only improves the bottom line through increased customer satisfaction and productivity, it also helps to lower employee absenteeism and turnover. Employee retention is a critical financial advantage, as each replacement can cost up to 1.5 times the salary of a position.

John P. Kotter and James L. Heskett’s 2008 book on their study of 207 organizations over 11 years, Corporate Culture and Performance, found companies that actively developed their culture returned 516 percent higher revenue and 755 percent higher income. Corporate culture refers to the shared values, attitudes, standards, and beliefs that characterize members of an organization.

To ensure that workplace design fosters corporate culture and employee engagement, many companies have taken steps, including:

• Creating workplaces with alternate space configurations and technologies that are aligned to specific business processes. This approach gives employees control over the way they prefer to work. People do their best work when they feel trusted to carry out tasks in their own way.

• Incorporating company values into space design.

• Incorporating plants and natural light, as studies have shown the links between light exposure, increased productivity, and employee happiness.

“How a workspace informs and inspires an employee has become a significant expectation for corporate leaders,” says Jerry Sullivan, senior vice president  project and development services. “The new workspace that fosters greater interaction, flexibility in work uses, and includes more innovative approaches to communication and collaboration, has become vital for companies to attract new talent and retain valuable employees. This more thoughtful attention to the workplace environment has proven to have a direct impact on the companies’ bottom line.”

Copyright 2017