Indra Nooyi & John Doerr

EmpowerHR 2021 

EmpowerHR 2021 

Lead and succeed at every level. Join keynote speakers Indra Nooyi, former CEO and Chairman of PepsiCo, and John Doerr, bestselling author, for this virtual event.

Employee Engagement
ROI Calculator

How to quantify the financial benefits of increased employee engagement

Driving employee engagement has become a top business priority as CEOs and senior executives look to increase employee retention, productivity, and innovation. However, quantifying these intangible benefits can be a challenge for HR and business leaders as they attempt to make a business case for employee engagement tools and solutions.

The following ROI calculators can help you determine the dollar value of highly engaged employees. This is a tool that business and HR leaders can use to obtain buy-in from the C-suite or anyone else in a budgetary approval-related role.

What is Employee Engagement?

%

of HR professionals define employee
engagement as “an employee’s willingness
to give his or her best at work.”

%

say employee engagement is “an
employee’s emotional commitment
to the organization and its objectives.”

Breaking Down the ROI
of Employees

While the positive effects of an engaged workforce manifest in multiple areas, we will show how improvements across several Key Performance Indicators can be modeled to form a compelling business case.

We calculate the ROI for the following
employee engagement metrics:

ROI_Calculator

Productivity

Employee engagement has a powerful effect on productivity. Actively engaged employees tend to be happier, more connected to the company, and aligned with the mission of the company. As a result, they are more focused and driven, putting in extra time and effort to help the organization succeed.

The best way to model a productivity gain resulting from employee engagement is to approximate the increase as a percent value. Even a small percentage can result in a very large benefit for the company. For example, if an employee arrives 15 minutes early to structure their workday, you can determine what percentage of their time that is and assign a dollar value to that.

Talent Retention

Employee engagement has a significant impact on talent retention. Highly engaged employees tend to be invested in their work. They aren’t showing up simply to get a paycheck, but because they care about the work they’re doing. That means staying a little later to finish a project or proactively seeking solutions when challenges arise. They are also less likely to leave the organization.

On the other hand, there is little that can incentivize employees to stay if they are not engaged. Replacing these employees is costly: According to Deloitte, the average cost to replace an employee is $7,000.

When quantifying talent retention as it relates to employee engagement, focus on cost savings. Cost savings come from the time spent writing a job description, posting and sourcing new applicants, screening, scheduling and conducting interviews, lost time waiting on acceptance, onboarding time of the new hire before they’re productive, etc. All of these can also be factored in when calculating the cost savings of retaining existing talent rather than hiring a new replacement.

Customer Satisfaction

There is a direct correlation between how engaged an employee is and their willingness to go the extra mile for your customers. Case in point: Over 80% of HR professionals say employee engagement has a high or very high impact on customer service. A highly engaged customer service rep is more motivated to find a solution, follow up afterward, be positive, and more resilient in the face of frustration or criticism. Over time, employee engagement translates to higher levels of customer satisfaction, which in turn results in lower levels of customer churn or loss rate.

Attendance

Emotionally committed employees enjoy being at work. They consistently arrive on time — maybe even early — and put in a full day’s work. They don’t call in sick on Friday afternoons or watch the clock obsessively as the workday comes to a close. The below calculation will help you model the cost savings that your company can hope to see through reduced absenteeism.

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Your Team's True Potential?

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