Employee engagement can affect the financial performance of a company because it is tied to an employee’s performance, productivity, absenteeism, retention, and customer satisfaction. It can also impact a company’s ability to innovate and improve processes, which are both necessary for financial success.
The roles of CFOs are evolving. Partnering with different functions, recognising the need for digitisation, driving cost transformation, retaining and attracting the right talent to support the business and driving sustainability initiatives are part of the CFOs agenda for the years to come.
The five indicators of high engagement in a workplace include less absenteeism, higher retention rates, increased productivity as the result of high performance, improved customer service, resulting in more client satisfaction and client retention, and better overall profitability for the organization.
Research shows that companies with poor engagement scores earn an operating income that is 32.7% lower than companies with more engaged employees. Additionally, disengaged employees cost an organization approximately $3,400 for every $10,000 in annual salary.
Scholars, consultants, non-profits, and companies have been researching the ROI of employee engagement for quite some time. The correlative data revealed in their research initiatives is significant. Here are some findings:
Earnings Per Share & Turnover
- Companies with highly engaged employees have earnings-per-share levels 2.6 x higher than companies with low engagement scores.
- Organizations in the bottom quartile of engagement scores experience 41% higher turnover.
Net Income and Shareholder Return
- Companies with highly engaged employees experience 2x higher net income than companies with poor engagement scores
- Organizations with highly engaged employees experience a 7x-greater 5-year total annual shareholder return than organizations with less-engaged employees.
Forward thinking CFOs understand the importance of stepping outside of their functional area to focus on employee engagement, a critical factor driving success.
But there is one more problem!
Employee engagement rates of finance department employees are also alarming.
As a finance or accounting manager, what can you do to improve engagement and keep your team members happy while they do the work they love?
Let’s focus on this topic in another article!