Does the economy really have an effect on turnover and employee engagement? Does it really matter whether we are in a good economy or a bad economy?
Employee engagement retains its value in spite of the economic changes. The link between organizational outcomes and engagement remains consistent whether the economy is growing or in a recession.
The Data on the Economic Effect
A quote from a recent Gallup survey, “Engagement at Work: It’s Effect on Performance Continues in Tough Economic Times" verified that employee engagement strongly relates to critical organizational outcomes in any economic climate. The survey showed that it could be and is a competitive advantage for organizations whether the economy is thriving or not.
Businesses that scored in the top half for employee engagement had higher overall performance. In fact, compared to those in the bottom half, top half businesses had twice the opportunity of success based on composite metrics for: financial, customer, retention, safety, quality, shrinkage, and absenteeism metrics.
Employee engagement affects nine performance outcomes. Compared with bottom quartile units, top-quartile units have:
- 37% lower absenteeism
- 25% lower turnover (in high turnover organizations)
- 65% lower turnover (in low turnover organizations)
- 28% less shrinkage
- 48% fewer safety incidents
- 41% fewer patient safety incidents
- 41% fewer quality defects
- 10% higher customer metrics
- 21% higher productivity
- 22% higher profitability
Engagement Must be a Key Initiative
James K. Harter, Ph.D., Gallup’s chief scientist for workplace management stated “What has been most surprising to me, as a researcher, is the consistency of the findings during very different economic times. In good economic times, engagement is the difference between good and great. In bad economic times, engagement is the difference between seeking and holding your own.”
All of the above mentioned are important to all organizations in all economic times. These quantitative metrics prove that engagement must be a key initiative in any business’s strategy to ensure ongoing success. The key is to understand the importance and the link between engagement and performance despite the state of the economy. A primary take-a-way is to be certain that the businesses stays focused on engagement in tough times and not just when the economy is doing well.
At C.A. Short Company, we are your partner for increased employee engagement resulting in increased performance outcomes to grow your bottom line. Our process and research-based platform helps you engage your team in order to increase your bottom line, motivate your staff to the benefit of the entire organization, and reward your people for the positive changes they make. To request a Complimentary Consultation, please click here.