In today's HR world, it's all about the numbers - proving how your initiatives are making an impact, and ultimately delivering a measurable business ROI. If like many this time of year you're buried in 2018 planning exercises, you've come to the right place for actionable insights.
This morning we hosted an interactive webinar with our friends at 15Five to help guide your 2018 planning efforts. We discussed the value of an engaged workplace and the metrics you should prioritize, and workshopped through two awesome tools for calculating the return on investment you can expect when investing time and resources into employee engagement, and more specifically into meaningful employee recognition.
In the webinar we'll reference two ROI calculators: for a full overview of how to use the calculators with mock company examples, download our companion eBook, "Know Your Recognition ROI".
- Link to 15Five's Employee Engagement ROI Calculator
- Link to Blueboard's Employee Recognition ROI Calculator
Check out the webinar recap and uncover the true value of your recognition efforts with numbers you can bring straight to the boardroom. Any questions on the methodology or how to apply the learnings to your own plans? Reach out to email@example.com along the way.
Here's a quick recap of the insights we discovered during the webinar:
Looking at data across a variety of sources, we see a strong correlation between companies with highly-engaged workforces and their stellar business results. Engaged employees not only bring a more positive attitude to work helping to build a more warm and welcoming company culture, but also show improvement across productivity, absenteeism, employee turnover, and shareholder value key business drivers.
Taking a look at our first calculator, powered by 15Five, we see how an engaged workforce can positively impact metrics like productivity rates, can reduce absenteeism or unearned PTO, and help to reduce annual voluntary turnover rates by plugging in unique workforce data. Download the Engagement ROI Calculator online here to run your own numbers.
Brand-A is a growing company with 500 full-time employees, generating on average $100M in annual revenue. Their average employee salary is $65,000. Plugging in these numbers, we see how engaged employees can help increase production and reduce the costs to replace employees who might otherwise leave Brand-A throughout the year. In total, a more engaged workforce has the potential to yield Brand-A a $21.8M economic impact annually, through a mix of increased revenue and reduced operational expenses.
How'd we do the math?
As you'll see from the Excel calculator, the estimated value comes from the amount of revenue added due to the effects of a more engaged workforce: experts assume a 20 percent increase in employee productivity, plus the money saved from a 41 percent reduction in absenteeism and 40 percent decrease in turnover.
Employee engagement is driven by a variety of factors, and there is no one-size-fits-all approach. When evaluating tools for improving employee engagement, check out our eBook, "The HR Tech Engagement Stack," a comprehensive review of disruptive startup technologies that help boost employee engagement across the employee lifecycle.
In our first example, we saw that Brand-A could expect a $21.8M yield through increased employee engagement efforts, derived from increased productivity, reduced absenteeism and employee turnover.
Deloitte shares that when recognition is done well, it’s also a big driver of employee retention, with recognition efforts alone reducing annual voluntary turnover rates by 31 percent! For this exercise, we’ll specifically look at the savings that meaningful recognition efforts bring as a result of more employees staying on at your company (vs. having to replace them).
For Brand-A, this came out to a 3X return on investment:
How'd we do the math?
Walking through the Recognition ROI Calculator, we see a few new variables in play. The first is Brand-A's estimated Recognition Investment, which when planning for success is recommended to be 1-2% of your annual payroll. Second, we see Deloitte's metric for estimated reduced turnover through meaningful recognition efforts. When taking into account the estimated costs to replace employees (now averaging 9-months salary, or for Brand-A $48,750 per head), we divide these anticipated replacement fees by the recommended recognition investment to uncover a very sizable ROI.
For every one dollar invested into meaningful recognition and rewards, Brand-A saves 3.
We learned a lot through the calculator tools, connecting the impact of engaged employees with key quantitative metrics like employee turnover, performance rates and absenteeism.
But what about the more qualitative, or opinion-based findings? At Blueboard, we deliver Post-experience Engagement Surveys to every rewarded employee, aiming to understand how they enjoyed their Blueboard reward experience, and how their reward specifically shifted engagement sentiment. Through hundreds of survey responses, we've found that Blueboard experiential rewards, in particular, have positively changed sentiment around the employee's feeling of value, their motivation rates, and their plans to stay. Employees also agree that Blueboard is a pretty excellent tool for building company culture.
Feeling more able and ready to tackle 2018 planning? We hope these tools add value, and we're always looking to develop more exciting content to guide your path. Please let us know in the comments below if you found the calculators helpful, and how you leveraged the insights for your own planning meetings.