The number one reason employee engagement is important is because it affects the bottom line. According to Ethan Yarbrough, president of Allyis, Inc., engaged employees are up to 28% more productive than their unengaged counterparts. Disengaged workers cost U.S. businesses between $243-270 billion a year. SnapComms.com, a privately owned business that focuses on employee communications, adds that engaged employees lead to an overall improvement in business performance, increased profitability, and a rise in customer satisfaction.
Engagement also has a stabilizing effect on the company by minimizing employee turnover rates, this is explained in detail in this employee engagement slide-show by Yarbrough. The cost to recruit and train a replacement is estimated to be double the salary of the previous employee, making retention a major influence on the bottom line.
Why Web 2.0?
According to the 2009 IABC “Employee Engagement Survey,” communications departments are being hit hard with budget cuts: 52% of participants reported decreased funding. About one-third (35%) also reported staff downsizing in the past year. Despite the reduced funding and reduced staff, about half of the companies did not adjust their employee communications plans. Smart Pros discuss the results of the survey here.
The survey also indicates that about 20% of organizations are using social networking as an employee engagement strategy, and many organizations are planning to use these technologies even more in the future.
Shelley Aylesworth-Spink of Suite101.com explains the shift in employee communications from traditional media to social media in her article here. The environment of reduced communications personnel and budget cuts coupled with a growing need for internal communication and information sharing creates an ideal opportunity for a Web 2.0 employee engagement initiative. Social media software is usually very inexpensive, and sites like Twitter, Facebook, and many blogging sites are virtually free. Web 2.0 technologies make it easier to communicate with geographically dispersed employees, easier to engage in meaningful two-way communication, and help reduce the gap between senior management and lower level employees.