How Employee Engagement Can Affect Your Firm’s Bottom Line
Emily Taibl, Sweeney Conrad, PS
When your partners think of employee engagement, they may think about fun activities during busy season, or HR related perks. When the focus is on the billable hour, sometimes engagement can seem like fluff, the extra stuff that is not that important. In reality, that could not be further from the truth. Recent studies have shown that satisfied employees may make the difference in turning a mediocre company into a great one. Logically, it makes sense - if you want your business to grow, you need a high performing workforce, and the only way to a high performing workforce is happy and engaged employees.
Here are some statistics:
- According to Gallup1:
- Highly engaged teams are 21% more productive and have 28% less internal theft than those with low engagement.
- The teams who score in the top 20% of engagement report have a 41% reduction in absences and 59% less turnover.
- A Salesforce study2 found that employees who feel their voice is heard are 4.6 times more likely to feel empowered to perform their best work.
What is Employee Engagement?
According to Wikipedia, an engaged employee is one who “is fully absorbed by and enthusiastic about their work and so takes positive action to further the organization’s reputation and interests.” Engaged employees are passionate, driven, and dedicated to doing their best work and play an active role in firm growth and recruitment. Employee engagement is different than simple employee satisfaction, although the two are definitely linked. Engagement goes beyond being satisfied with their career, to create a worker who is passionate about a company, and proactively works to help a company succeed and grow.
How Does Employee Engagement Benefit Business?
To answer this question, we must work backwards. People do business with companies who they trust. They want to work with people who are positive and work hard to find solutions to their problems. Employees who are not confident in their position, not excited about what they do, and who do not believe in the value of the company they work for, cannot provide this level of customer service. When tasked against a competitor’s engaged employee, a disengaged employee will lose the business every time. In fact, studies have shown that one engaged employee will be more beneficial to your organization than ten disengaged employees.
Benefits of engaged employees include: higher productivity, better employee retention and recruiting opportunities, improved customer experience, as well as just a happier and more positive work environment.
What Happens When Employees Become Disengaged?
A recent study that has been described as an “exhaustive report” by The Engagement Institute1, uncovered that a third of employees aren’t truly engaged on the job, and these disengaged employees are costing the workforce between $450 and $550 billion a year.
When it comes the accounting profession, we all know how hard it is to find good, dedicated employees. Recruiting is a major challenge for many firms, so losing good team members is something that we should all be proactively trying to avoid. One study found that one in every six firms experiences annual turnover of 20% or greater4. To drain the bottom line even further, replacing a professional staff member can cost a firm as much as 50-60% of the employees’ annual salary.
Aside from the financial impact, disengaged employees can bring down the morale of other employees, create less productivity, and even end up reflecting negatively on the firm after their departure.
The Benefits of Engaged Business Developers
Creating engaged business developers (or accountants who are tasked with developing business) is especially important, as these are the folks who are selling your firms’ services, and serving essentially as brand ambassadors. These employees will want to be more involved with the proposal process, will be excited about spreading the word about the services your firm offers, and will more easily build networks and show others how to do the same. Firms should be proactive about making sure business developers have a strong understanding of firm values, feel like their efforts are valued and noticed, and receive frequent and effective communication and feedback.
Making Engagement a Priority
In 2019, Gallup announced that employee engagement had ticked up 34% in the U.S., a hopeful sign that many business leaders are becoming more aware of the importance of engagement and making it a priority. While many accounting firms are notoriously slower to change, the hard numbers and multitude studies are a great way to share with your partners the importance of employee engagement. This issue of the AAM Minute is full of other great information on the factors that impact employee engagement and some ways that you can lead the charge at your firm.
Do you have new and interesting ways that you’re driving employee engagement at your firm? Do you have any data that proves the benefit to your partners? Share it on the AAM Minute Discussion boards, we would love to hear your suggestions and success stories.
4Inside Public Accounting National Benchmarking Report, Platt Consulting Group, 2015