Analysis: Improving Employee Engagement Can Boost Revenues, Profits

Lincolnshire, Ill. — May 30

A new analysis by human recourses research firm Aon Hewitt found that high levels of employee engagement can dramatically influence an organization’s growth rate, operating income and total shareholder return.

In 2012, Aon Hewitt examined the relationship between employee engagement and financial performance using data from 94 global companies representing nearly 9 million employees from 2008 to 2012.

The analysis uncovered a strong positive correlation between increased employee engagement and sales growth in the years following. Each incremental percentage point of employees who became engaged translated into an additional 0.6 percent growth in sales.

For example, a $5 billion organization with a gross margin of 55 percent and operating margins of 15 percent increased operating income by $20 million with just a 1 percent improvement in employee engagement, the analysis found. With a 5 percent improvement in employee engagement, operating income jumped to $102 million.

Aon Hewitt’s analysis also found a strong correlation between employee engagement levels and Total Shareholder Return (TSR).

Organizations within the top quartile of employee engagement levels — where 72 percent or more of employees are engaged — attained a TSR that was 50 percent higher than that of the average organization.

Likewise, companies in the bottom quartile engagement group — where less than 46 percent of employees are engaged — had a total shareholder return that was 50 percent lower than the average.

Source: Aon plc