Research-Backed Links Between Employee Engagement and Success

the word "facts" is highlighted under a magnifying glass

Highly engaged workplaces are more successful…they grow 16.29% faster and have a 26% higher stock performance. Employee engagement does indeed have a measurable impact on your bottom line. We have the evidence now that proves what we have believed all along…positive employee engagement drives positive business outcomes. Engagement matters a lot.

We conducted a study of 21 organizations all of which were publicly traded and have conducted a Best Places to Work Engagement Survey in at least three consecutive years from 2010 to 2013. Each averaged more than 2,000 employees, and they represented different industries and diverse geographical areas.

Here are the results across five factors that struck our research team.

  1. Revenue Growth
  2. Stock Price Appreciation
  3. Perception of Feeling Valued
  4. Opportunities for Career Growth
  5. Employee Retention and Trust In Leadership

 

1. Revenue Growth

The companies in the study with the highest employee engagement ratings experienced 16.29 percentage points higher revenue growth over three years than those with lower engagement scores. This is quite a statement considering that all survey participants are purposefully trying to win the Great Places to Work Contest as part of their talent management strategy and employee brand proposition.

While average revenue grew for all entrants over the three year period (a sign to us that engaged workers perform well), those with higher revenue growth (39.74% compared to 23.45%) had nearly 21% more engaged employees (75.6% compared to 54.8%).

With regard to quarterly revenue growth, organizations with the highest level of engagement experienced a whopping 18% greater quarterly revenue growth during the past 12 months.

Graph 1

 

2. Stock Price Appreciation
Organizations with the highest level of engagement also experienced 26% greater stock price growth during the past 52 weeks. The chart below illustrates the difference in stock price growth. Now wouldn’t your shareholders like that?

Graph 2

3. Perception of Feeling Valued
One employee engagement survey item dealt with whether or not employees believed that the “leaders of the organization value people as their most important resource.” This is a clear measure of engagement and, indeed, showed the greatest difference in engagement scores (15.2% higher) between the two groups.

Graph 3

4. Opportunities for Career Growth
Another significant factor in creating high employee engagement is the opportunity for career growth and advancement. When employees see where their career path could take them within the company, they are more engaged. Here is also reflection of that measure on overall growth with a 12.4% difference in career growth scores between high and medium growth companies.

Graph 4

5. Employee Retention and Trust In Leadership
In the area of Employee Retention, the difference between the two company groups was .48 on a six-point scale. And in the area of Trust in Leadership, there was a .47 difference. Both are statistically significant enough to take notice.

The conclusion is clear. If you are looking to grow your company, you had better be sure your employees will be working with, not against, you. How engaged are they? Do they feel valued? Do they have career development opportunities? Do they want to stay? Do they trust their leaders? Get the answers to these questions and make the moves required to improve employee advocacy, discretionary effort and intent to stay in order to become a high growth company.

Benchmark your employee engagement practices to see where you stand.

Download our free employee engagement and retention toolkit for leaders.

 

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