Happy Employees Increase Profits

 In Blog, Culture

This post is contributed by Lidia Young, LSCSW, Executive Coach and Culture Strategist

Lidia@ReThinkLeadershipNow.com ~ www.ReThinkLeadershipNow.com


Business is a human endeavor. If you are a leader you get results through other people. Current statistics on employee engagement are disheartening. According to Gallup, 85% of employees worldwide are disengaged. The US is doing better where employee disengagement is 66%. That means that only 34% of US employees are actively engaged. 

Why should you care? Glassdoor states that employee engagement has emerged as a critical driver of business success in improving organizational performance. The higher the level of engagement, the more employees are willing to strive for the success of their organization.

Other Gallup statistics:

  • US companies lose $450 -$550 Billion due to lost productivity every year
  • Employee turnover costs companies $11 Billion annually
  • Companies with highly engaged teams enjoy
    • 21% higher profitability
    • 41% reduction in absenteeism and
    • 59% less turnover

Highly engaged teams exemplify good relationships and a sense of shared purpose.The value of retaining employees shows up in the performance of teams. Continually changing the members of a team often prevents them from building trust and developing group norms. A high-performance team requires time and experience with one another. They need to be able to communicate well together, know each other’s strengths, weaknesses and work styles to be able to perform at a high level.

In a Harvard Business Review study, 58% of employees stated they did not trust their boss.Humans are meaning-making machines. As a species we make every experience mean something.  Leaders have a great deal of impact on employee happiness and they influence what stories employees tell themselves and others about the company. Trust is inspired by fair practices and honest communication. Employees need to feel valued and have a clear path showing them what they need to do to be successful.

If your employees know the purpose of your company, trust you, feel valued, have a clear sense of how to accomplish their job successfully, and are empowered to solve problems, you likely have a healthy culture that retains talented employees.

Happy and effective employees inspire customer loyalty, which has a significant effect on your bottom line. According to Aberdeen group, companies with engaged employees see 233% greater customer loyalty.

As a leader what are you modeling for your people?

  • Do you have a clear vision for your company?
  • Are you personally inspired and a good role model?
  • Do your employees trust you?
  • Do you communicate well and often?
  • Do your practices effectively support your mission, values and employees?
  • Do you recognize small and large wins?

To increase employee engagement, get clear on your vision and mission. Define “why” you are in business and clarify your company’s purpose. A critical thing every leader should do is to explain why their company exists. When the “why” is clear, employees have a stronger sense of direction and mission. The purpose of your organization, your “why” should inform company strategy, policies and practices.

Clarifying your vision, mission and values is worth the investment because over time you will make money by inspiring and keeping highly engaged employees as well as retaining customers. Aligning your vision with your company policies and practices creates meaning. Everyone wants to be part of something meaningful. Become the leader and company that provides meaning to your employees and customers. Your decision will be directly reflected in increased profits.

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