Gallup runs an ongoing “Employee Engagement Survey” with thousands of companies each year. Those that score in the top half of the survey results show these benefits compared to those in the lower quartiles:
• 48% fewer safety incidents
• 41% fewer quality incidents (defects)
• 22% higher profitability
• 37% lower absenteeism
• 25% lower turnover (in high-turnover organizations)
• 65% lower turnover (in low-turnover organizations)
• 28% less shrinkage
• 41% fewer patient safety incidents
• 10% higher customer metrics
• 21% higher productivity
Let’s take a look to estimate what any of these stats could do for your business.
Take the absenteeism stat for example; Let’s assume you have 250 employees at your location. According to this Forbes article, the average absenteeism cost per employee per year is around $3,000, or $750k for our hypothetical company. A 37% cost savings would be $277,500.
Or how could your business benefit from 48% fewer safety incidents?
The National Safety Council estimates a cost of $38,000 per disabling injury and $7,000 per non-lost time injury. Let’s use $10,000 as an average per-incident amount (which doesn’t even include workplace fatalities that cost $1.1 million). According to the Bureau of Labor Statistics, the annual injury rate is 2.9 per 100 employees. So, our typical 250-employee company would have 7 incidents per year. A 48% reduction would mean 3.4 less incidents per year. At an average of $38,000 per, that’s a savings of $129,000 per year.
We’ve only quantified two of the items on the list and are already a little over $400,000. I’d say that quantifying the other eight would easily get us over $1 million. Keep in mind that these savings don’t require any additional sales; they represent potential profit dollars currently draining out of a leaky bucket.
Communicating effectively drives employee engagement. Engagement drives better behaviors which in turn drive profits.
Will implementing better communications solve all those issues? Probably not, so cut the savings in half. Heck – cut them by 75%, and you’re still talking about big dollars, certainly a huge ROI on just about any program you initiate.
Plugging up that leaky bucket might not be the most exciting project in the world, but it will generate real profit dollars and healthier, happier employees.