P&MM is pleased to launch an ‘Employee Engagement Calculator’ to help organisations assess the financial impact when engagement levels change.

Our free calculator will benefit anyone responsible for engagement initiatives including HR professionals, internal communicators, Finance Directors, and line managers. The Engagement Calculator will help build the business case for engagement activities, helping to identify, “How much should we spend on engagement initiatives?”, “What measures and targets should be in place?” and “What return I can expect?” The analysis resulting from the Calculator will help to steer strategic initiatives and improve staff productivity.

The Engagement Calculator offers two levels of analysis. The first level identifies different staff engagement levels and calculates an estimated cost to the organisation in terms of productivity, absence and retention. The second level enables the indicators to be adjusted and therefore quickly identifies the positive financial impact that different increases in engagement can have, helping define measures and ROI criteria.

Adrian Duncan, Motivation Engagement Specialist at P&MM Motivation, says,

“Employee engagement continues to be a big issue for many organisations. Our own research shows that four out of ten staff (40%) are not engaged at all and whilst 95% of business leaders believe that workforce engagement is important, only a quarter (25%) have actually done anything about it. Part of the reason is the multiple definitions of engagement, drawing on a wide variety of research and evidence, making measurement difficult. This tool uses the published evidence within a practical tool to help organisations build a more specific business case for engagement initiatives – and establish measures and targets to drive commercial success.”

How does it work?

The Engagement Calculator uses evidence from recent research* and maps it against four key pieces of information provided in a short online survey. The data then provides an impact report that will:

• Help an organisation understand the “lost potential” at the four common levels of engagement (from disengaged to fully engaged);
• Calculate the financial impact of lower levels of engagement on performance, absence & retention across the organisation;
• See the predicted financial impact of poor engagement levels in terms of absence, and retention;
• Understand the potential impact on customer service and revenues.

According to Great Place to Work, there are four leading indicators that will create a “high trust environment” and are the basis of high engagement: Values, Empowerment, Recognition and Innovation. Adrian Duncan adds: “Although only one of the four leading indicators, Recognition is a core engagement driver through its impact across all the others. Executed effectively recognition embeds values, by empowering people to recognise & seek out what’s good, supports senior leadership integrity, fosters employee voice & can be used to encourage innovation.”

Duncan concludes, “P&MM’s engagement calculator** estimates that an organisation of 500 people could be wasting £2.4m a year through lack of engagement. Just a 3% increase in engagement, with a linked 1% reduction in staff absence and retention could reduce this by £526,000 and impact on customer service and revenues. Through this type of analysis organisations can calculate a potential budget, set realistic KPIs and assess the ROI of engagement initiatives such as recognition. This is a great free tool that will help kick start the measurement criteria now required for senior management.”

To access this free tool please visit www.staffmotivationmatters.co.uk/employee-engagement-calculator.

*The research utilised to support the Engagement Calculator includes:

• THE EVIDENCE, Employee Engagement Task Force, “Nailing the evidence” workgroup, November 2012, which references:

• Development Dimension International (DDI) analysis of a Fortune 100 manufacturing company (Absence & Retention)

• Sourced from the Chartered Institute of Personnel and Development Recruitment, Retention and Turnover Annual Report, 2009.

• Towers Perrin-ISR (2006) The ISR Employee Engagement Report, as cited in MacLeod and Clarke 2009. (Performance)

• The Human Capital Institute (Performance)

  Harter, James K., Schmidt, F. L., Killham, E. A. and Agrawal, S. (2012). “Q12® Meta-Analysis: The

• Relationship Between Engagement at Work and Organizational Outcomes.” Gallup Organization (Performance)

• Sears US Study, reported in EEA – Final Economics of Engagement (June 2009) (Customer Service)

 

**500 employees, £24k salary, +20% benefits, Engagement levels of 20% fully engaged, 30% engaged, 30% somewhat engaged and 20% not engaged. Adjusted with a 2% increase in engagement and a linked 1% reduction in Absence & Retention.