Employee engagement linked to company profits: Study

Having the right work tools, supportive environment key to high engagement
|hrreporter.com|Last Updated: 07/16/2012

Companies with high employee engagement have profit margins nearly three times larger than that of organizations with disengaged workers, according to a study by Towers Watson.

Employees who believe that their companies are high-performers deliver sustainable engagement scores 16 percentage points higher than the overall country norm, found the Global Workforce Study, which surveyed 32,000 employees globally — 1,000 of which were from Canada.

However, more than two-third (67 per cent) of Canadian workers are not fully engaged in their work and are frustrated by insufficient support from their organizations.

"When workers are not fully engaged, it leads to increased risk for employers. It makes companies more vulnerable to lower productivity and higher inefficiency, greater rates of absenteeism and turnover and increased costs for chronic illnesses," said France Dufresne, leader of Towers Watson's talent and rewards practice in Montreal. "Without more attention to the fundamentals of sustainable engagement — including improving on-the-job support for employees and increasing efforts to deepen employees' sense of attachment to the organization — employers will have a harder time generating growth and returns."

The Global Workforce Study breaks new ground in understanding and measuring what contributes to sustained employee engagement, said Towers Watson. The equation for sustainable engagement is the sum of three distinct elements:

Traditional engagement: Employees' willingness to give effort to their employer.

Enablement: Having the tools, resources and support to get work done efficiently.

Energy: A work environment that actively supports physical, emotional and interpersonal well-being.

"Enablement and energy are the really critical factors in this equation," said

Ofelia Isabel, Towers Watson's Canadian leader for talent and rewards. "It's only in the last few years, when we've seen more pressure in the system, that the importance of enablement and energy has risen to the forefront."

Companies have known for years that engagement is important to performance, what's now clear is the significance of effective workplace resources and interpersonal well-being, along with an understanding of the role that senior leadership plays in sustaining that well-being, said Julie Naismith, a senior talent and rewards consultant at Towers Watson.

According to the study, virtually all (95 per cent) of highly engaged Canadian employees believe that that they have the work tools and resources they need to achieve exceptional performance — compared to only 20 per cent of disengaged employees.

Similar disparities appear with regard to the ability to sustain energy throughout the workday (97 per cent versus 32 per cent) and sense of personal accomplishment at work (99 per cent versus 33 per cent).

However, amongst all Canadian survey participants, only one-third (38 per cent) believe that their organization and senior leaders encourage and support a healthy workforce and just 39 per cent think that senior leaders have a sincere interest in their well-being, found the survey.

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