Because jobs are scarce now, senior management of these laggards don’t feel the need to engage with employees to reach the shared goal of making the company great. As a result, according to an Aon Hewitt study, companies that don’t fit its “Best Employers” category are losing shareholder value.
Smart companies understand, however, that an engaged workforce is a productive workforce.
Employee Engagement Correlates to Shareholder Returns
Organizations with high levels of engagement (65% or greater) continue to outperform the total stock market index and posted total shareholder returns 22% higher than average in 2010, according to the study by the human resource consulting firm. On the other hand, companies with low engagement (45% or less) had a total shareholder return that was 28% lower than the average, as illustrated in this graph.
The study shows the key drivers of employee engagement in this graph.
Note that study respondents from Aon Hewitt’s employee engagement database say that pay is only half as important as career opportunities. So simply giving employees a raise isn’t as important as putting systems in place that reward employees with opportunities to build their careers in the organization.
If you are an employer, are you engaging with your employees and offering them the opportunities to grow? If you are an employee, do you feel stuck in place? Maybe it’s time to move on.