Engaging employees in the right way translates into dollars, according to a survey by Aon Hewitt, but employee benefits are far less important as a driver of engagement than such factors as career opportunities within the company, recognition, clear communications and pay.
That said, all factors, including benefits, contribute to strong engagement, and strong engagement leads to stronger financial performance, Aon Hewitt reported in the release of its annual engagement study.
Consider this finding from the study: Organizations in the study that were ranked in the top 25 percent in terms of employee engagement levels reported a total shareholder return that was 50 percent higher than the average organization's shareholder return.
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The survey extracted data from 94 global corporations that employed some 9 million employees, and identified "a strong positive correlation" between the financial performance of companies and increased employee engagement. "Each incremental percentage point of employees who became engaged translated into an additional 0.6 percent growth in sales," the study concluded.
But as a contributor to engagement, benefits remained far down on the Aon Hewitt "list" of some 29 indicators that have mostly to do with a corporation's reputation, its resources and the way it recognizes and promotes workers. Pay ranked No. 3.
Moreover, benefits actually dropped a percentage point globally as a factor and fell 2 percentage points in the U.S. compared to the 2011 survey results.
Among the study's key findings:
- U.S. engagement levels, which actually decreased by 3 percent in 2012, lagged behind both that of Europe (5 percent increase) and Latin America (3 percent increase). Overall, the study found, engagement is increasing globally.
- Four out of 10 employees worldwide are not engaged in their work, as defined by Aon Hewitt's model.
- Engagement has increased along with the improving global economy, but it continues to grow more slowly than the rate of economic recovery. One subconclusion of the study related to this relationship between engagement increase and economic rebound: "companies that managed higher employee engagement relative to their peers throughout the economic downturn are now seeing dramatic, positive impacts to their revenue growth."
- Employee pay moved up the list as a factor, from No. 6 in 2011 to No. 3 last year, trailing only career opportunity and organizational reputation.
"The link we found between engagement and financial performance validates the theory that engaged and productive employees are a critical ingredient in the success of an organization," said Dr. Ken Oehler, Aon Hewitt's Global Engagement practice leader.
"Employers need to recognize the incredible financial opportunity behind their investments in talent and develop a long-term strategy for keeping their employees engaged and productive at work."
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
