Does employee engagement matter?

Photo of a young African-American woman sitting at a computer and staring out the windowThere’s a lot of flutter and angst around employee engagement and the latest trend of employee experience. Questions abound on everything from how to measure engagement on through to how to improve employee experience, leading to the ultimate dilemma: is it really worth the effort?

Do happy employees actually improve the bottom line?

For those of us who care about whether employees are happy and believe they’re making a difference, the intuitive answer is, of course, YES.

But intuition doesn’t generally lead to budget allocation.

Fortunately, there are studies that provide actual facts. A recent example started with research on which companies among the largest in the U.S. have top ratings for employee wellbeing (based on salary, benefits, work-life balance, training, and professional development opportunity, among other factors). It then looked at how these top-ranked companies perform relative to those with lower rankings.

The good news for those of us who care about our employees: these top-ranked companies really do perform noticeably better, as a group, than those lower on the scale.

Just Capital is the author of one such study; they’re a nonprofit that ranks the Russell 1,000 index (consisting of the largest companies in the U.S.) on these issues of employee wellbeing. Just’s CEO, Martin Whittaker, commented in a Fortune magazine article a few months ago that it’s basic human nature: “A better-rewarded workforce produces at higher levels.”

Does this sound obvious to you? Me too. But, as I mentioned above, things that are intuitively obvious don’t necessarily translate into funding!

So now what?

This is important information if you want funding for professional development programs in your organization – whether for yourself or for your team.

The data from Just Capital, along with other research from Gallup as well as the financial advisory firm Parnassus Investments (and you can find more with a little Googling), helps you build a strong case for investment in what CEOs and CFOs sometimes view as “squishy” and with little clear return on investment.

Combine this information with the cost of failing leadership spreadsheet available for you to download (just click that link and you’ll have it), and you’ll be well prepared to present a proposal for the training and support you want for yourself, your team, and anyone (everyone?) else in your company.

Whether you’re a first-line manager and leader, or a seasoned executive with managers reporting to you, it turns out that making sure the people working for you are interested and challenged by their jobs really does matter to your company’s bottom line. So … what are you waiting for?

(Interested in learning more? Here’s a recent article from Fortune magazine on the Just Capital study:

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