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ROI Toolkit

Employee Engagement ROI

Investing in employee engagement reduces sick leave and staff turnover, saving costs and increasing ROI.

The Principle

Invest Ā£X in Employee Engagement ā†’ Reduce Sick Leave & Turnover ā†’ Save Ā£X on Staffing & Recruitment ā†’ Improve CSAT ā†’ Deliver ROI (Ā£Z)

The methodology

The Methodology

The following outlines the recommended steps to implement this methodology:

  • Collect employee engagement data ā€“ Measure employee engagement through surveys, feedback sessions, and key workforce metrics such as sick leave and staff turnover.
  • Identify areas for improvement ā€“ Analyse trends to determine where engagement issues are impacting operations. This may include high absenteeism, poor workplace morale, or lack of training and development opportunities.
  • Invest in employee engagement initiatives ā€“ Develop targeted strategies such as enhanced training, wellbeing programs, employee feedback mechanisms, and recognition schemes to boost engagement.
  • Monitor impact on sick leave and staff retention ā€“ Track changes in absenteeism and staff turnover over time to measure how engagement improvements are reducing business costs.
  • Quantify the financial impact ā€“ Link improved employee engagement to cost reductions in areas such as sick leave, temporary staff, and recruitment costs.

An example of how an organisation might use the Employee Engagement ROI metric

A supermarket launched an employee engagement initiative to reduce high sick leave and turnover rates. They invested Ā£300K in a strategy that included enhanced training, regular employee consultation, and wellbeing programs. Within six months, sick leave hours dropped by 100,000, leading to Ā£600K in cost savings from reduced temporary staffing and overtime. Employee turnover also decreased, saving an additional Ā£100K in recruitment costs. At the same time, CSAT scores began improving, reinforcing the link between engaged employees and customer satisfaction.

Things to consider

Track CSAT/NPS alongside employee engagement to identify trends.

Improvements in employee engagement may take several months to reflect in customer satisfaction scores.

Increased CSAT can lead to higher retention, increased customer spend, and improved brand reputation.

Any business with a customer-facing workforce can leverage this methodology for measurable benefits.

Key research/insight from us

Research from post card

The Customer Knows (2016)

The Customer Knows (2016)

The Customer Knows (2016)
  • 67% of customers who had a great experience with an employee said they would buy again from that organisation, compared to 11% who had a bad experience.
  • 63% of customers who had a great experience with an employee said they would recommend that organisation, compared to 10% who had a bad experience.
View full research
The Customer Service Dividend Revisited

The Customer Service Dividend Revisited

The Customer Service Dividend Revisited

This research examines the relationship between customer satisfaction and business performance over the 5 years.

The research showed that companies with customer satisfaction at least one point above the sector average achieve significantly stronger results, with 20.3% EBITDA, 7.4% compound revenue growth, and Ā£717,739 revenue per employee. In contrast, companies with customer satisfaction at least one point below the sector average perform much worse, with only 10.5% EBITDA, 0.1% compound revenue growth, and Ā£297,025 revenue per employee.

View full research
Productivity UK

Productivity UK

Productivity UK

With almost 80% of UK GDP generated by the service sector, there is an urgent need to define, develop and measure productivity in a service context.

This Breakthrough Research examines the perspectives of senior managers, employees and customers on productivity in a service context.

The research looks at how organisations have sought to improve both their productivity and customer satisfaction, and recommends a framework to enable organisations to improve and measure their performance.

View full research

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