Engaged employees aren’t just nice, they’re profitable. Here’s the proof.

What if the secret to skyrocketing profits isn’t all in those new products or marketing strategies, but in the level of engagement of your employees?

If it sounds new or crazy to you? I encourage you to read this till the end.

But I am hoping the following to be more of a reminder for you as a leader. 😊

Back in 2018, when I was with Viacom18 , we saw one of our peer companies in the media space, Spotify make waves with a bold new move.

They introduced a Flexible Public Holidays policy, allowing employees to trade official public holidays for days that aligns more with their personal beliefs and celebrations. This was an initiative to promote inclusivity and accommodate a diverse and global workforce.

At first, we were like, ‘wow’. A company in our space, amongst the first ones to do it, was putting employee happiness at the forefront, and it felt really groundbreaking. And they later topped it up in 2021 with a Work from Anywhere” (WFA) policy.

And guess what? The results have been as impressive as expected. Its been more than 3 years since the implementation of the policy and Spotify’s attrition rate is reduced by half, and there has been an impressive increase in the time they take to fill a position (from 48 to 41 days). One can simply think of the $$ contributions of these results in Spotify’s bottom line.

And this gets you thinking. Employee engagement is directly tied to better business results. It’s not just a feel-good thing, it’s a real driver of profits. A Gallup study backs this up. They found that companies with engaged employees outperform their competitors by a whopping 147% in earnings per share. That’s not a coincidence, it’s proof that engaged employees contribute to the bottom line.

Why Engagement Equals Profits:

So, how exactly does employee Engagement translate to profitability? Let me break it down for you:

1. Engagement Boosts Productivity

When employees are engaged and happy, they’re more likely to show up energised and motivated. Think about it: If you’re rested, mentally healthy, and genuinely engaged, you’re going to perform at your best. This leads to higher productivity, better quality of work, and ultimately, more revenue.

• Microsoft Japan saw a 40% boost in productivity$$ during a trial with a four-day workweek. They weren’t working more — they were just more engaged and productive, and the results followed.

2. Engaged Employees Stick Around

We all know that turnover is expensive. Replacing employees costs money — between hiring, onboarding, and training, the cost adds up quickly. Engaged employees are more loyal and less likely to leave. When they feel appreciated, they’re in it for the long haul.

• Zappos has a legendary low turnover rate thanks to their employee-centric culture. They know that treating people well leads to strong retention, which saves the company tons of $$ in recruitment costs.

3. Engagement Fosters Innovation

Innovation doesn’t come from a place of stress and burnout. It comes from an environment where employees feel safe, supported, and inspired. When people are engaged, they’re more likely to share ideas, think outside the box, and come up with creative solutions to problems.

• Adobe encourages “Innovation Days,” where employees are given time to work on side projects. This initiative has led to new products$$ and improvements$$ that have kept Adobe on the cutting edge.

Here are some more examples from the real-world:

1. Salesforce — With a comprehensive employee wellness program, including mental health days and counseling services, Salesforce has seen high engagement levels, leading to improved productivity and retention. Source: Airbnb Employee Well-being Programs
2. Airbnb — Their flexible time-off policy and focus on employee wellness has created an environment where employees feel supported and valued. The result? Strong engagement and loyalty, which ultimately boosts company performance. Source: Salesforce Corporate Responsibility Reports
3. Infobip — A global leader in the CPaaS/SaaS space, has quite an effective Talent Strategy with a focus on growth from within. This clubbed with its Hybrid Work Program has placed it amongst the top companies in high tech space with highest employee engagement scores, and indeed making it a lot more profitable entity. Source: Infobip People Survey Report 2024
4. Slack — They offer unlimited sick leave and have a strong culture of work-life balance. This has contributed to high employee satisfaction, and guess what? They have one of the lowest turnover rates in the industry. Source: Slack’s Work-Life Balance Initiatives

How Can We Boost Employee Engagement?

Okay, this all sounds great, but how can we actually implement this in our organizations?

Don’t worry, I am not advising to launch an unlimited paid leaves policy, or announce a 4 days a week working set up, it doesn’t have to be a massive overhaul. Here are a few simple, real-life tips that can increase engagement in your workplace:

1. Be Flexible: Like Microsoft or Infobip, offer flexibility in how, from where and when people work. If our employees are healthy and well-rested, they’ll be far more productive than if they’re constantly stressed about meeting tight schedules.
2. Recognize and Celebrate: Big or small, every achievement deserves recognition. Whether it’s a shout-out in a meeting or a company-wide email, people thrive when they know their efforts are appreciated. Focus more on the ones who do their job quietly and stick with you, rather than the star performers, some of them who change job every other year.
3. Encourage Time Off: Be flexible with time offs. Encourage employees to take time off when they need it. Stressing about leave days just adds to the pressure. Plan it out at the start of the year with each individual in your team to balance it out during peak and off peak business seasons.
4. Foster Open Communication: Make sure your employees feel comfortable voicing concerns and ideas. Use technology to gather anonymous and open feedback if you see everyone praising the company or the leaders all the times. If it’s too good to be true, most likely it ain’t.
5. Provide Support: Invest in mental health resources and wellness programs. Support your employees in taking care of both their physical and mental health.

Bonus tip: Look at the amount of time folks are spending on meetings (aka calls), specially virtual ones. Perhaps some of those could have been an email or an update in a group chat, most likely the daily or weekly recurring ones.

Conclusion:

So there you have it. The secret to driving profits and success isn’t just about sales strategies or the latest products — it’s about happy and engaged employees. Treat them well, give them the support they need, and watch how it impacts your bottom line.

Employee engagement isn’t just a nice-to-have; it’s a must-have for long-term business success.

So, what’s the first step you’re going to take to make your employees feel valued today?

_{I published this article on Medium on Dec 29, 2024. Here is the link –} https://medium.com/the-people-room/engaged-employees-arent-just-nice-they-re-profitable-here-s-the-proof-b62264f355bf