The Biggest Reason to Bet on Your Own Horses
All eyes will be on this summer’s Belmont Stakes, as Justify looks to become just the second horse in 50 years to win the sport’s prestigious Triple Crown. While fans mull over where to place their bets on race day, organizations around the world are banking on a largely untapped resource to gain big profits and better savings -- their own workforces.
While there are endless reasons you should invest in your own people when strategizing how to propel your company forward, one reason stands out among all the others: engaged teams are more profitable.
In business, every debate about processes, resources or investments begin and end with whether or not new ideas or strategies lead to a bigger bottom line. If the needle doesn’t move that much, then what’s the point of undertaking something different, right?
Employee engagement, however, is a sleeping giant when it comes to revenue generation; studies show that over 70% of American workers consider themselves not engaged, or worse, actively disengaged. Think about that for a second: a large percentage of companies are paying people a lot of money to purposefully decide to phone it in.
The thing is, the numbers show that when businesses focus on building a culture where people feel a sense of value and maybe even have a little fun, performance-related outcomes increase dramatically, which translates to better productivity that leads to increased revenue across the board.
In fact, research shows that engaged business teams are almost 25% more profitable than disengaged ones, and companies often save millions more as a result of higher employee retention rates that cut recruiting and training costs.
How Does Your Organization Measure Up?
Studies and research aside, let’s take a logical look into the mirror and ask the million-dollar question. How much are your workers really working for you?
Let’s say you run a company with 200 employees. According a study done by MIT, an average Fortune 500 employee costs around $65,000 in salary and benefits, so if you multiply that by the number of employees (200), you’re paying out $13 million to your workforce.
If 70% of those employees are disengaged, as the study showed, then according to the math, your organization is spending over $9 million to remain status quo at best. More realistically, that investment is losing money due to employee turnover and absenteeism, among other things.
Even if you’re on the other end of the spectrum and can assess that only 20% of your team is disengaged, you still have over $2.5 million not working as hard as it could for you.
The First Step to Better Employee Engagement
Any good business person knows that weak links in the chain need to be fixed or else they waste resources. If our exercise showed us anything, it’s that properly assessing how engaged an organization’s staff is can mean millions of dollars in savings first, and further profits down the road.
While some organizations employ people qualified to determine the health of its workforce, most don’t, and seeking out professional consulting firms that have expertise in this area can go a long way in building an authentic bridge between leadership and the rest of the staff.
Professional consulting firms have a wide-variety of services that include executive leadership coaching and innovative measurement tools. Plus, they focus on how those services translate into more revenue for their clients; studies show that a 10% investment in employee engagement can lead to almost $2.5 million in pure profits over a five-year period -- on top of all the savings.
At the end of the day, cultivating buy-in from each person on each team can help lead to everyone working together more effectively to achieve the company’s broader brand vision, without sacrificing the bottom line to get there.
For more information about our coaching and leadership training programs, contact us at Info@DavidCouperConsulting.com.
Josh Espinosa is a freelance writer and designer. He also founded The Approachable Music Project, a music education program on a mission to make learning to play easier on people.