Engage Payroll: The Unbeatable Return on Payroll of Engaged Employees

Rhythm Systems is proud to announce the release of its newest white paper, "The Unbeatable Return  on Payroll of Engaged Employees," written by Cindy Praeger and Eskinder Assefa. The research clearly shows that engaged and motivated employees provide a competitive advantage that can help you dominate your industry and increase your return on payroll.

This is why our clients love our leadership development programs: if you get the most out of your team, you can accomplish more with fewer resources. If you don’t have an employee engagement strategy, you overlook one of the most cost-effective ways to improve your business.

In 2016, Gallup collected data from over 195,600 US employees. Among other things, Gallup sought to determine the extent to which employees were engaged by asking twelve questions covering areas such as basic, individual, teamwork, and growth needs.

The findings? Only 33% of employees were engaged. On the flip side, 51% were not engaged, and 16% were actively not engaged. In other words, two-thirds of employees were not engaged.

This lack of employee engagement comes at a significant cost to companies and is a severe inhibitor to growth, and affects the bottom line.

In fact, Gallup's research compared the top and bottom quartile of companies by employee engagement and found that the top quartile outperformed the bottom by 10% on customer ratings, 22% in profitability, and 21% in productivity. Work units in the top quadrant also had 25% lower turnover rates, 37% lower absenteeism, and 48% fewer safety incidents.

Why does this happen? Why do employees become so actively disengaged that the impact on performance can dramatically differ between two otherwise similar companies? How do I get an engaged workforce? What are the drivers of engagement at my company?

It wasn’t always like this. In the early years of a company's life, the founders were highly motivated and driven by a strong mission to change something. They effectively communicated this mission to their early hires who were just as engaged as they were. These individual employees were closely aligned to the company's highly engaged leaders and skip level meetings.

But, as the company continued to grow, more and more people were hired. More managers were needed, followed by layers of management. Employees were placed in departments, given narrow tasks, and measured by how well they did those tasks. Silos began to form and set in. With each passing year, employees were increasingly removed from the great mission, the reason the company was founded in the first place.

As each new hire reported to another new employee who was not engaged and worked with fellow employees, the majority of whom were less than engaged, the condition shifted from bad to worse. Employee disengagement and apathy settles in and overtakes the culture.

CEOs struggle to execute their strategies in this culture, and growth stalls. As these growth-minded CEOs look for new ways to grow, they inevitably decide to acquire another company in order to boost growth, but that actually exacerbates the problem. The acquisition leads to two cultures that must be merged, further alienating the cynical employees.

How do CEOs increase employee engagement?

Just the savings from lowered absenteeism alone can be impressive. What would happen to your company if you could better engage payroll employees?  Research by Circadian (a workforce solutions provider) shows that absenteeism costs companies around $266,600 per year per one hundred employees. That means that just by reducing absenteeism by a third, a company can realize net savings of $98,642 per 100 employees.

The savings on turnover rates can also be quite dramatic. Several studies show that replacing employees costs an additional six or more months of salaries in recruiting and training fees.

A 25% lower turnover rate translates to reducing this by almost two months of the average monthly pay for a company.

Clearly, engaging all your employees can have a dramatic impact on your company's performance. This leads to the question of how to accomplish that. How do you fully engage all your employees? How do you kill departmental silos?

One thing that has to change is how your managers engage the workers they supervise. They must coach them to succeed—on a daily basis—rather than simply rely on the old school method of annual reviews, bonuses, and performance plans to manage their teams.

And the only way they can coach daily is if they know exactly what kind of coaching each employee needs at any given time.

Having done that, now imagine that they enabled their now engaged employees to work as one unit to execute their top growth priorities—in other words, focused their efforts on the things that matter rather than waste their time on low-value activities.

That means that every team lead, supervisor, department head, all the way to senior executives need a way to know what each employee should be working on, if they are working on that, whether they are in the "green zone” on those activities, or in danger of slipping into “red zone.” This kind of deep, real-time insight would position them to step in and help immediately. This goes above and beyond sending out an employee engagement survey, or working solely on employee motivation; this requires a better way of working.

We Call This Intelligent Work.

To make this vision a reality, we need a tool that makes this a natural and daily behavior for everyone. We call that tool The Intelligent Work Platform by Rhythm Systems.

This paper first discusses the high costs of a disengaged workforce and what the remedies are. It then discusses the concept of Intelligent work—where employees fully understand the game plan and what role they play in that game plan so they stay focused on doing only what leads to their company’s growth and profitability. Finally, it discusses how CEOs of mid-market companies build a culture of execution excellence using the Rhythm Intelligent Work Platform to create actively engaged employees.

If you’ve enjoyed this summary, please download the full research white paper "The Unbeatable Return on Payroll of Engaged Employees," and let us know if we can help you execute on those goals.

Interested in learning more about Employee Engagement, please enjoy these articles written by the middle market experts:

The Power of Systems and People: Accountable Leaders and Teams

Intelligent Work – How Mid-Market CEOs Execute for Success

Departmental Silos: The Silent Killer of Employee Engagement

Are Employee Motivation and Engagement the Same? (Infographic)

The 10 Best Employee Engagement KPIs for HR and Beyond!

5 Employee Engagement Blunders to Avoid

How to Fuel Employee Engagement with a Recognition Culture

10 Ways to Improve Employee Engagement in Your Manufacturing Company (Video)

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