How to Convince Executives to Measure Employee Engagement

In business, it’s widely accepted that we improve what we measure.

In finance, sales, and operations, “measure and improve” cadences are commonplace, with rigor applied toward the measurement aspect. Naturally, we need to first know what we need to improve and then measure to find out if our actions aimed at improving those deficiencies worked.

Unfortunately, this proven business logic has not been universally applied to employee engagement.  

Whether they simply haven’t been shown the value or had a bad past experience with an outdated process, some executives are still not convinced of the need to establish and maintain a measure/improve cadence when it comes to engagement. 

Here are some arguments and stats to arm yourself with next time you need to explain why investing in employee engagement is a smart business decision:

You’ll improve customer experience

Companies with engaged employees are 22% more profitable than those with low engagement levels, and customers will pay 16% more for convenience and friendliness. The more engaged your employees are, the better care they’ll take of your customers.

Employees who are moderately or extremely disengaged can have a negative impact on your business. Last year, 54% of consumers stopped doing business with companies because of poor customer service.

An investment in employee engagement is an investment in customer experience. Period.

You can identify blockers and improve productivity.

Employee engagement isn’t the same as satisfaction. You’re not collecting feedback to find out what brand of coffee your employees would prefer to have in the breakroom.

The value of measuring engagement (when done correctly) is the ability to pinpoint blockers or broken processes in your organization and get usable data that can help you take action.

When manufacturer T-H Marine started measuring employee engagement, they discovered their production employees were disengaged. It turns out, the team was struggling to lift heavy boating materials manually. So the company purchased carts with hydraulic lifts for the team to use. That one simple action resulted in a 67% increase in station capacity and saved the company $3.8 million in production capacity.

You can reduce turnover costs.

It may seem obvious that the more engaged an employee is, the less likely they are to leave their company. But while all executives understand this fact, many don’t consider just how much turnover is costing their organizations.

On average, the loss of one full-time employee making $45,000 a year costs your company about $15,000. For highly-skilled professionals, the cost can be even more staggering. For example, when a physician leaves their practice, that organization can lose between $500,000 and $1 million in revenue.

You can eliminate bureaucracy.

José Almeida, the chief executive of Baxter International, has made it his mission to eliminate bureaucracy at his company.

Despite the company’s massive size — including 60 factories and 12 R&D centers — Almeida believes the fewer layers of separation between himself and his employees, the better.

“The reason for eliminating the layers was not only cost reduction, but also the ability to connect with the folks across the company,” he said in an interview with Fortune.

Baxter’s stock has increased by nearly 70% since Almeida became CEO, and earnings and revenues have been exceeding expectations.

You can help your managers manage better.

The connections your employees create with their managers are some of the most important relationships they’ll form over the course of their careers. They’re the ones that determine if a team will achieve outstanding goals or watch productivity plummet.

According to one study, 70% of employee motivation comes from managers.

If you’ve been wondering why some of your teams are performing better than others, there’s a good chance it’s because they simply have better bosses. A great manager can inspire individuals, unite teams, prevent burnout, and keep employees engaged.

Measuring employee engagement can help you identify the teams who are thriving under their managers and the ones that may need more coaching. The more you do to help managers thrive, the better positioned they’ll be to increase productivity and profits.

Need a little more help? We have a workbook for you!

We created a workbook to help you document your current state of engagement and culture. It also includes a worksheet for setting engagement goals and provides tips for creating engaged teams.

Get the 7 Steps to Engaging and Retaining Top Talent workbook to get started.