Manage Your BusinessCompany CultureThe true ROI of engaged and happy employees

The true ROI of engaged and happy employees

Employee happiness is a popular topic in any industry at the moment. You will find numerous results on the web if you search for them. It’s because the corporate world trends are changing, and a fulfilling job isn’t the one that pays you the most.

Instead, employees prioritize their mental and emotional well-being more, and reputable companies are now doing their part for it. Happy employees not only increase the company’s reputation but also significantly impact the return on investment (ROI).

Statistics reveal that only 20% of employees feel passionate about their jobs, which means there’s still room for improvement. Business owners and employers need to understand that happy employees are suitable for their business in every way.

Why Is Employee Engagement Necessary?

Mutual benefit and emotional fulfillment have always been a priority in human interactions, no matter how professional.

Individuals who find this kind of interaction in their workplace perform better and can contribute to the company’s well-being.

These employees move past their benefits and consider returning the favor to the company.

However, the companies have to put the first hand forward by interesting them in employee engagement for happy employees. The full spectrum of benefits of happy employees may vary, but here are a few standard perks that every business can enjoy:

  • Reduced absenteeism
  • Improved retention
  • Higher customer satisfaction
  • Boosted productivity

Therefore, with benefits like these, it’s highly beneficial for business owners to create an employee engagement plan. Seniors in any industry accept this as a fact but need data-focused results and focus on what results in the ROI bring.

Even if you look past the sentimental perspective of employee engagement, you can quantify its value. It is where the ROI of employee engagement measurement and communication comes in.

How to Measure the ROI of Engaged and Happy Employees?

Metrics and measurements are the quickest way to substantially understand any business move. If you are interested in increasing employee engagement but don’t want to do it for sentimental reasons alone, measure it. Various ways to measure the ROI of engaged and happy employees are discussed here.

Employee Involvement

One of the first changes you notice with effective employee engagement plans is increased employee involvement. Most professionals believe that involvement has a ripple effect and slowly inspires everyone.

A positive environment boosts the employee’s performance, efficiency, and output. The engagement strategy works if your employees are involved in corporate feedback, genuinely concerned about the company’s direction, and want to do their part. A great option is a pulse survey which covers crucial questions like:

  • Remote work
  • Professional development
  • Career growth opportunities, etc.

Similarly, you should focus on diversity and inclusivity to keep your employee valued. In addition, the situation of their psychological safety is an essential metric too. You can also see how often an employee would recommend your office to someone else.


The cost of talent acquisition and employee retention is crucial for any business. Engaged employees don’t need to change their employers because they feel connected with the firm. It’s why checking the attrition rates is a common practice in the corporate world.

However, low or decreased turnover rates are not a fully precise metric of employee happiness or engagement. You should practice a more holistic approach to the employee’s interest and inclination towards the company.

Additionally, employers can do their part in keeping the turnover rates low. For instance, performance bonuses, company recognition, and bonuses are great options.


Like other areas of life, engagement impacts an employee’s productivity. Engaged employees are generally more motivated and dedicated to achieving more. Recognition and monetary growth are fundamentals, but only if they feel valued in the company.

You can check the productivity metrics against your engagement program. For instance, if you have a sales division, focus on the number of sales done by an individual employee. If your sales increase, your engagement strategy is effective.

To check the sales ratio, simply divide the total sales by the number of hours employees worked. The higher the number, the better your business will do in the long run.

We also recommend performing a 360-employee analysis, which covers all essential aspects. You can get feedback from clients, peers, and other involved individuals.

productivityMore: Six metrics that can help small business owners track the productivity of remote workers

Quality Focused Operations

Employees’ productivity goes hand in hand with the overall quality of work they deliver. Without quality results and work, productivity has no use.

The highly engaged teams are motivated to do more and do their best in every regard. They produce high-quality work and are generally more creative.

These employees work harder and more intelligently, delivering high-quality work based on company standards. However, there are some ways that companies can use to determine the quality of work delivered.

For instance, checking the cascading goals of an employee and their success rates is an intelligent way. These include individual-level goals that one can assess at each level (an individual). You can also assess the bigger picture by determining department-based performance.

If your employees reach their goals to a high extent, they are engaged and happy. You can keep learning from the objectives and key results to better check the whole process.

Customer Satisfaction

How your employees handle your customers depends on how they feel. For example, if an employee feels positive, they can better care for the employees and resolve their issues. On the other hand, a troubled employee is less likely to deal patiently with customers.

If your employees feel more connected and engaged, they are also likelier to:

  • Learn
  • Develop
  • Be attentive to customer needs

If you are already working on customer satisfaction, you need to check if it’s effective or not; try these methods.

Customer Satisfaction Score (CSAT):

The CSAT is one of the oldest methods for getting real-time employee feedback. In most cases, the companies get the CSAT from their targeted audience right after services or products get delivered. CSATs at that time are the most honest and can help you better understand your company’s industry stature.

To calculate the CSAT, you can divide the number of positive responses by employees by total responses. Multiply the result by 100, giving you the CSAT percentage.

Net Promoter Score

Customer loyalty is a primary KPI for your company’s future, and that’s what the Net Promoter Score covers. To get the NPS number, you should ask how likely a customer is to recommend your service or product to someone else.

You can also add a scale of one to ten to make their responses more precise. People that give 9s or 10s are promoters, those who respond with 7s or 8s are passive, and others don’t like your services well enough.

Customer Effort Score

The customer effort score (EFS) is another standard metric used to determine the ease or complication employees face while working. It includes their experience with the team, the product, and overall thoughts.

The CFS usually helps in sales but can be tweaked for other businesses you may run. We recommend carefully strategizing CFS to get the maximum benefit out of it.


The effectiveness of all employee engagements comes down to the revenue generated by the company. There’s a significant relationship between happy employees and company profits. Statistics show that unhappiness among employees can cost business owners almost 34% of their total revenue. For instance, if your company earns a $100,000 profit, you lose $34,000. Gallup also found that 20% – 34% of employees in the U.S. and Canada felt engaged in their jobs.

With lower income and revenue, the company has to make budgetary changes that can impact the company’s direction. The profitability depends on the tendency of a business to turn a sale into revenue.

There’s a variety of profit margins that businesses should assess from time to time. Here’s you can do it:

  • Operating profit margin ratio = (Operating Income ÷ Number of Sales) x 100
  • Net profit margin ratio = (Net Income ÷ Number of Sales) x 100
  • Gross profit margin ratio = (Revenue – Cost of Goods Sold) / Revenue x 100

Once these ratios are lined out, you can compare them with the industry average and see what your competition makes. Remember, a little bit of value difference is understandable. However, if the difference is too big, it’s time to improve employee engagement for better results.


Employee absenteeism can be a significant sign of disengagement with your company. It’s also a sign that the workforce is exhausted and overwhelmed by their current roles. Absents can also be because of a medical complication or a family problem, so it may not be the same for everyone.

Nonetheless, you can counter these issues by communicating with the employees and providing flexible work alternatives. You can also provide paid leaves, sick leaves, and other benefits to further facilitate your workforce.

The most crucial part is not to make the employees feel bad for it. Instead, employers should encourage vacations by employees when necessary.

For instance, you can book a designated number of days employees must take off. Interestingly, many companies are flaunting their unlimited holiday offer and its working.

How Long Does Employee Engagement Take?

Developing, implementing, and getting ROI from an employee engagement strategy can take some time. Employees may have different issues with their employers, and their identification and resolution may take longer.

However, we recommend taking the time to carefully assess these engagement metrics. If you feel like you cannot do it on your own, you can take direct employee feedback—keep an open mind, and you should get the data you are looking for.

You can change your current business model, operations, and methodologies with the information to ensure your employees feel valued.

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