Why Does It Matter?

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.

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5 Responses to Why Does It Matter?

  1. Claire LaBar says:

    Cathy, it’s interesting that you mentioned employee turnover rates. I plan to discuss how to measure social media effectiveness in achieving internal communications objectives in my next post, and I also found a lot of information about turnover rates in my research. A good objective to have within your organization is to increase employee satisfaction, and it’s clear in your post that employee engagement makes for a more satisfactory workplace. I’ll be sure to come back to your blog to gain more information for my next post. I hope my post is equally as helpful for you!

  2. Your opening statement mentions how “disengaged employees” can negatively affect an organization’s bottom line. I found the statistic that you provided intriguing. I am interested to learn what exactly constitutes an ‘engaged’ or ‘disengaged’ employee as well as how, specifically, employee engagement in social media can benefit a company financially. I was also interested to learn of the budget cuts that communications departments are suffering from.

  3. Melinda Long says:

    I haven’t really thought of employee engagement being important as a way to reduce turnover rates. That makes sense though, because it is costly to constantly hire and train newcomers. I think employee engagement allows people who are afraid to speak to higher management directly or find it difficult to express their ideas out loud, to share vital and useful information for everyone in the company. I found an employee engagement blog that you could use for future reference: http://employeeengagement.ning.com/profiles/blog/list.

  4. Employee engagement is something that I find extremely interesting. Since we are a generation that is obsessed with staying updated and in contact with so many people at one time, it is important that businesses are finding ways to accommodate us. I had never really thought about how important social networking can be in saving money too. It is reasonable for companies to take the time now to implement a plan that will promote engagement, so that present and future employees see this engagement as the norm and actively participate. I know that when I start looking for jobs, the use of social networking is a major thing I will be concerned with, because it is such a large part of my life.

  5. It’s hard for me to imagine a company not having an internal site for networking with employees. Clearly the benefits of such sites are all over the place in businesses and the issues of not having one have shown as well. I think a post comparing a company before it had an internal network and after would be very interesting because it would show the benefits, if any. That is something I would be interested in learning more about, just how much more successful is a company when it has an internal network for employees? Are the employees happier? And how many of the employees need to engage for the site to be seen as successful?

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