Bottom line benefit: address employee engagement to end steep turnover, grow customer loyalty
By Manufacturing Business Technology Staff -- Manufacturing Business Technology, 9/4/2007 3:29:00 PM
The cost to replace an employee can be as high as 2.41 percent of annual salary, according to a study by Metrus Group, but the long-term cost to the organization's service-profit chain often is even higher. The service-profit chain establishes the relationship between corporate policies, employee satisfaction, value creation, customer loyalty, and profitability.
In a benchmarking report by Best Practices LLC, a reduction in turnover rates by just two percentage points can result in a savings of $3 million annually. Depending on the level of employees—supervisors versus front-line employees—and the reduction rate, this figure can escalate to savings as high as $40 million annually.
While many companies realize the importance of "engaged" employees, few can effectively understand and capitalize on the linkage to productivity and customer satisfaction.
The full report, Employee Engagement and the Service-Profit Chain, is available with a complimentary summary at http://www3.best-in-class.com/rr847.htm . It highlights the best practices in identifying and improving drivers that are proving most effective in engaging employees in their jobs, their companies and their work groups.
Drawn from primary and secondary research from AstraZeneca, 3M, Freescale Semiconductors, BAI, Microsoft, Tennessee Valley Authority, Texas Instruments, Verizon and more, subject matter is organized as follows:
· Connecting employee engagement and customer loyalty;
· The organization's Cultural Health Index;
· Experiential learning;
· What can go wong during employee engagement;
· Measuring employee engagement;
· Engaging employees through strategy, sense of community, recognition & personal growth;
· Incenting managers to better engage employees; and
· Linking engagement to quality.
