June 20, 2013

Employee Engagement is Still Poor but it Does Drive Bottom Line Results

Being a rookie author I have no idea whether (or when) a second edition is contemplated.

If you’re from Wiley and reading this, please fill me in.

But if a second edition of Flat Army is in the cards, then I have the chance to update the myriad statistics and data points that envelope chapter one around the topic of ’employee engagement’.

Gallup recently released their annual findings on employee engagement. The short version summary? Not much has changed. Take a peek at the following graphic, courtesy of Gallup:


Over a twelve-year period, the percentage of ‘engaged’ employees in the workforce has see-sawed between 26% and 30%. That, my friends, is pathetic.

And our friends at Aon Hewitt (see one of their graphics below) have submitted a similar trend. That is, over the past five years there has only been a 3% deviation in employee engagement between 2008 and 2012 flipping between 57% and 60% – on the global roll-up number. (in fact, North America is on the decline over the past four years from 67% to 63%)


With both Gallup and Aon Hewitt indicating employee engagement is poor and it’s still not really making any positive inroads, does it actually matter?

I’ve previously written on this site that customer satisfaction can be improved by a more engaged workforce. There is also a litany of further evidence that I document in Flat Army.

But I was grinning ear to ear when I saw the following graphic (and accompanying words) from a recent Gallup report entitled “How Employee Engagement Drives Growth“:


Gallup states:

Gallup researchers studied the differences in performance between engaged and actively disengaged work units and found that those scoring in the top half on employee engagement nearly doubled their odds of success compared with those in the bottom half. Those at the 99th percentile had four times the success rate of those at the first percentile. These kind of performance differences are always important to businesses, but they are especially crucial during a recession.

Work units in the top quartile in employee engagement outperformed bottom-quartile units by 10% on customer ratings, 22% in profitability, and 21% in productivity. Work units in the top quartile also saw significantly lower turnover (25% in high-turnover organizations, 65% in low-turnover organizations), shrinkage (28%), and absenteeism (37%) and fewer safety incidents (48%), patient safety incidents (41%), and quality defects (41%).

Simply said?

It’s (yet) further evidence — and thus another smoking gun — that an engaged, collaborative and open workforce does in fact help the bottom line.

What say you?

9 Replies to “Employee Engagement is Still Poor but it Does Drive Bottom Line Results”

  1. I am all for engagement and believe in it but….
    I often wonder which comes first, an engaged workforce creates great business results—or great business results create engaged workforce’s.

  2. @Rob – I’m not certain it matters. If an organization is driving business results — but hopefully in a harmonious way culturally — then it (ideally) goes without saying it’s an engaged workforce. If, however, the organization is somewhat rigid (and business results are sub-par) and they were to tackle their culture such that it becomes more engaged … perhaps then that organization will see improved business results. Either way, perhaps it’s a win-win. (unless, of course, there is the organization that is driving great business results but treats their employee base like dirt – although successful, I doubt it lasts)

    @Jane – you are very welcome, thanks for dropping by.

  3. Dan, employee engagement drives results, yes. My view is that it is not one person’s responsibility. And that’s the problem. Employee engagement in my experience as a successful technology entrepreneur is down to two things: the vision from the top to make it happen and the right talent optimization systems and processes to support it. People are most engaged when they have the right level of challenge, a clear target, and a boss who gets out of the way but provides support when needed. That has to be a conscious decision. Managers need the cultural support from the top, the HR processes and the right systems and software to drive bottom line results. An unusual combination? You bet.

  4. Dan, thanks for sharing this. Engagement drives business results – no surprise there. What surprises me, however, is there has been no increase in engagement in last 12 years. It means no HR policies or intervention; no leadership or management theory has impacted engament levels positively. Just why?

  5. @Amit – My particular belief on the lack of employee engagement movement is quite simple … we’re stuck in a 20th century way of leading people who in fact are working in the 21st century. Oil and water.

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