Employee Engagement Study

In the past few years, employee engagement has become one of the biggest and fastest-growing management trends, and with good reason: There is ample evidence it works. While part of this is common sense – an engaged employee is almost by definition a happier, more productive employee – hard numbers back it up as well.

As part of its 2007-2008 Global Workforce Study, consulting firm Towers Perrin (now Towers Watson) surveyed 90,000 employees in 18 countries about a number of topics, including what drives engagement – the desire and willingness of employees to go the extra mile in their jobs, to put in discretionary effort. While the firm came up with a number of answers about how companies drive engagement, the most eye-catching part of the survey was why. Towers Perrin compared the financial results of 50 multinational companies. In the course of one year, the companies with high employee engagement posted a 19 percent increase in operating income and a 28 percent increase in earnings per share; conversely, those with poor employee engagement scores saw operating income decline by nearly one third, and earnings per share drop 11 percent. More broadly, the firm has concluded that a 15 percent improvement in engagement will cause 2 percent improvement in a firm’s operating margin.