Making a Business Case and the ROI for Employee Engagement

Transcription

1 Making a Business Case and the ROI for Employee Engagement Presented by Presented By: Ray Halagera The Profit Ability Group ray@theprofitabilitygroup.com 1/16/ South Texas Human Resources Symposium 1

2 OUR AGENDA The Business Case for Employee Engagement The ROI of Employee Engagement Some Actions to Maximize Employee Engagement 1/16/ South Texas Human Resources Symposium 2

3 The Business Case for Employee Engagement Why Employee Engagement? 1/16/ South Texas Human Resources Symposium 3

4 The Business Case for Employee Engagement Why Employee Engagement? WFM 1/16/ South Texas Human Resources Symposium 4

5 Value of Engagement Employee engagement impacts: customer ratings profitability productivity turnover safety incidents shrinkage (theft) absenteeism patient safety incidences quality (defects) 1/16/ South Texas Human Resources Symposium 5

6 Value of Engagement Engaged employees: are 38% more likely to have above average performance are 65% more likely to recommend their company s product take 3.5 fewer sick days per year on average are 87% less likely to leave the organization Source Items 1-3: Madison Performance Group retrieved from Source Item 4: Corporate Leadership Council, Driving Performance and Retention Through Employee Engagement retrieved from Engagement.pdf 1/16/ South Texas Human Resources Symposium 6

7 The ROI for Employee Engagement 1/16/ South Texas Human Resources Symposium 7

8 The ROI for Employee Engagement Engaged employees: are 38% more likely to have above average performance are 65% more likely to recommend their company s product take 3.5 fewer sick days per year on average are 87% less likely to leave the organization 1/16/ South Texas Human Resources Symposium 8

9 The Costs of Disengaged Employees Productivity % Disengaged % Loss of Productivity Total Compensation 1/16/ South Texas Human Resources Symposium 9

10 The Costs of Disengaged Employees Productivity Engaged: 30% Not Engaged: 50% Actively Disengaged: 20% State of the American Workforce: 2014 Gallup 1/16/ South Texas Human Resources Symposium 10

11 The Costs of Disengaged Employees Productivity Lost Engaged: 0% Not Engaged: 20% Actively Disengaged: 30% 1/16/ South Texas Human Resources Symposium 11

12 The Cost of Disengagement. Engaged: 30% x 0% = 0% Not Engaged: 50% x 20% = 10% Not Engaged: 20% x 30% = 6% Total Loss in Productivity: 16% Total Compensation: $100 million Cost of Disengagement: $16 million 1/16/ South Texas Human Resources Symposium 12

13 The ROI for Employee Engagement Cost of Not Engaged: $16 million Engagement Improvement Goal: 10% Dollar Value of Improvement Goal: $1.6 million Investment to Improve Engagement: $1.0 million The ROI for Employee Engagement: 160% 1/16/ South Texas Human Resources Symposium 13

14 The ROI for Employee Engagement Engaged employees: are 38% more likely to have above average performance are 65% more likely to recommend their company s product take 3.5 fewer sick days per year on average are 87% less likely to leave the organization 1/16/ South Texas Human Resources Symposium 14

15 The Cost of Disengagement.Voluntary Attrition 1/16/ South Texas Human Resources Symposium 15

16 The Cost of Disengagement.Voluntary Attrition Costs of Person Leaving = 6% 1/16/ South Texas Human Resources Symposium 16

17 The Cost of Disengagement.Voluntary Attrition Costs of Person Leaving = 6% Costs of Hiring Replacement = 20% 1/16/ South Texas Human Resources Symposium 17

18 The Cost of Disengagement.Voluntary Attrition Costs of Person Leaving = 6% Costs of Hiring Replacement = 20% Training/Orientation Costs of Replacement = 4% 1/16/ South Texas Human Resources Symposium 18

19 The Cost of Disengagement.Voluntary Attrition Costs of Person Leaving = 6% Costs of Hiring Replacement = 20% Training/Orientation Costs of Replacement = 4% Value of Lost Productivity =30% 1/16/ South Texas Human Resources Symposium 19

20 The Cost of Disengagement.Voluntary Attrition Costs of Person Leaving = 6% Costs of Hiring Replacement = 20% Training/Orientation Costs of Replacement = 4% Value of Lost Productivity =30% Lost Revenue =??? 1/16/ South Texas Human Resources Symposium 20

21 The Cost of Disengagement.Voluntary Attrition Costs of Person Leaving = 6% Costs of Hiring Replacement = 20% Training/Orientation Costs of Replacement = 4% Value of Lost Productivity =30% Lost Revenue =??? Total = 60% 1/16/ South Texas Human Resources Symposium 21

22 The Cost of Voluntary Attrition.Huge! Infrastructure Professionals 150% of salary IT Professionals 176% of salary Engineering Professionals 200% of salary Middle Managers 241% of salary Critical Skills 10x salary (?) 1/16/ South Texas Human Resources Symposium 22

23 Some Actions to Maximize Employee Engagement Your Managers! 1/16/ South Texas Human Resources Symposium 23 20

24 Questions? 1/16/ South Texas Human Resources Symposium 24 24

25 Thank you! Ray Halagera, The Profit Ability Group e: p: (314) /16/ South Texas Human Resources Symposium 24