Invest in Employee Engagement, Enjoy the ROI
The buzz surrounding employee engagement is hard to ignore, but while all employers aim to have happy employees, they also need to see a concrete business case for bolstering employee engagement. What do businesses stand to gain by investing in an engagement program? And what do they lose when they don’t prioritize engagement? As it turns out, quite a lot.
When employees don’t feel motivated, that ends up costing employers in both unnecessary labor expenses and in missed revenues. Turnover, a major symptom of unengaged staff, racks up unnecessary costs quickly. For every worker who leaves a job in which they make $30,000 or less, employers shell out 16 percent of that salary to replace them. Turnover can also greatly impact the quality of customer service provided, leading patrons to take their business elsewhere and leaving sales on the table. Across the board, the costs of employee disengagement can wreak havoc on the bottom line.
Fortunately, there is a path to employee engagement that meets the needs of both employers and their hourly workers. Using employee engagement technology that looks at the whole employee-employer relationship to simplify scheduling, improve employee training and bolster top-down communication, organizations won’t only build a happier and more loyal workforce – they’ll also see a huge return on their investment.
A new WorkJam report highlights just how much money companies can save by investing in employee engagement tools. Using a standardized model of calculating ROI, the report offers the example of a retailer with 1000 locations staffed by an average of 25 employees per location. By implementing a comprehensive employee engagement system, this business can cut costs by $14.63 million annually. Here’s how those savings break down:
- Reduced overtime: With more efficient scheduling, employers can avoid the bad communication and understaffing issues that otherwise result in costly overtime. Annual savings: $286,000
- Reduced overstaffing: Scheduling solutions that extend existing workforce management systems, can also go a long way toward highlighting resource-draining staffing inefficiencies. Annual savings: $1.14 million
- Lower turnover: Companies earn the biggest savings by keeping workers around. With lower attrition, businesses can avoid the hefty costs associated with recruiting, onboarding and training new employees. Annual savings: $7.2 million
- Improved top-down visibility: By providing head offices with real-time visibility into the front lines, a robust employee engagement system creates a seamless system of labor management – one that’s equipped to oversee top-tier performance and compliance. Annual savings: $6 million
To read more about these savings – and to learn how this 1000-location retailer can earn an additional $17 million in annual revenue with employee engagement solutions – check out the full WorkJam report here.