EMPLOYEE

ENGAGEMENT
REVENUE GROWTH STRATEGY
TABLE OF CONTENTS

3 16

4 20

6 23

7 25

9 26

11 27

13
INTRODUCTION
Review any organization that has earned a “best place to work” designation, or one that perennially earns “favorite
company” status with a strong base of loyal customers, and you’ll discover a common thread: employees who are
highly engaged.

The purpose of this study is to measure employee engagement, understand the impact it is having, and how it is
measured and managed so as to derive some best practices to guide all organizations.

Today’s employees desire a relationship with their employers that enable them to perform work that has purpose and
builds their skills while doing it as autonomously as possible.

A workforce of highly engaged employees is the product of company culture, which begins at the top of the
organization. Achieving it requires investment, leadership, commitment and time. It does not come about because of
the right words on the mission statement poster in the break room.

3
EXECUTIVE SUMMARY

4
EXECUTIVE SUMMARY


5
RESEARCH METHODOLOGY

Annual Revenues: Primary Role of Respondent:

 
 
 
 
 
 
 

Type of Organization:





6
EMPLOYEE ENGAGEMENT BASELINE

“For the purposes of this survey, ‘employee

engagement’ is defined as the measurable degree of an
employee’s positive or negative emotional attachment
to their job, colleagues and organization that
profoundly influences their willingness to learn and
perform at work.”

Employee Engagement Benchmark Report, Demand Metric, December 2013, n=291

7
EMPLOYEE ENGAGEMENT BASELINE
There is a clear divide at the 50% engagement level, with almost half of the sample in this study falling on either side of
this divide.

Small companies (less than $25 million in annual revenues) reported the highest level of engagement, with 57% of
employees engaged at the 50% level or above.

It is the medium-sized companies (annual revenues between $26 and $500 million)
that report the lowest level of employee engagement: only 40% of them report engagement levels of 50% or above.

As small companies grow, they often lose some of the advantages that facilitate strong engagement, but do so
gradually without realizing it.

8
THE CORE OF EMPLOYEE ENGAGEMENT

Employee engagement is not the fortunate

consequence of some random set of forces. It springs
from an organization’s culture; and that culture is
always a function of leadership.

Employee Engagement Benchmark Report, Demand Metric, December 2013, n=291

9
THE CORE OF EMPLOYEE ENGAGEMENT

In stark contrast are the organizations reporting an employee engagement level of more than 50%, represented by the
green bars, with 81% of leaders in those organizations exhibiting a high or very high level of commitment.

Without a high or very high level of commitment, leadership is essentially conceding on the issue, either willfully or
ignorantly counting on employee self-motivation to drive engagement.

10
CHARACTERISTICS OF ENGAGED EMPLOYEES

 (Revenue)

 (Employee Retention)

 (Productivity)

 (Morale)

 (Creative)

 (Customer Loyalty)

 (Competitive Advantage)

11
CHARACTERISTICS OF ENGAGED EMPLOYEES

Δ
Δ Δ

Improved morale contributes to employee

retention; employee retention influences customer
loyalty; and customer loyalty directly enhances
revenue.

a competitive
advantage.

Employee Engagement Benchmark Report, Demand Metric, December 2013, n=291 Most managers intuitively understand that the
characteristics on the list above all contribute, to some
degree, to facilitating the success of an organization,
12 and this data certainly supports that view.
THE IMPACT OF ENGAGED EMPLOYEES

Employee Engagement Benchmark Report, Demand Metric, December 2013, n=291

13
THE IMPACT OF ENGAGED EMPLOYEES

In fact, the biggest delta is arguably in the category most executives perceive as the most important one: profit
margin.

Of study participants with employee engagement at 50% or less, only 13% report significant impact of engagement on
profit margins. For the group where employee engagement is greater than 50%, 33% report a significant impact of
engagement on profit margins.

However, the financial benefit of extending customer retention beyond the average relationship
duration has exponential value.

14
THE IMPACT OF ENGAGED EMPLOYEES

making loyalists out of just 5% more customers would

lead, on average, to an increase in profit per customer
of between 25-100%.

Both Reichheld and Hughes’ figures suggest that the

benefit of retention is substantial.

Employee Engagement Benchmark Report, Demand Metric, December 2013, n=291

15
PROMOTING EMPLOYEE ENGAGEMENT

Some level of nurturing is required to establish and

grow an engaged workforce.

As a driver of engagement, the performance review is

the most popular instrument, but the way it is played
Employee Engagement Benchmark Report, Demand Metric, December 2013, n=291 determines how effective it is.

16
PROMOTING EMPLOYEE ENGAGEMENT

It is a fundamental truth that when organizations attempt to change the culture and/or produce certain behaviors, it
requires both the powerful expression of a vision and training.
PROMOTING EMPLOYEE ENGAGEMENT
To have effectiveness, initiatives to nurture employee engagement must first have genuine leadership backing.

To know if initiatives to nurture engagement are effective, the measurement must occur from the employee side of the
equation, not the management side.

They are all designed around an understanding of what motivates the workforce, not around what management
can or is willing to do.

18
PROMOTING EMPLOYEE ENGAGEMENT

 

 

 

 

 

 

 

 

19
MEASURING AND MANAGING ENGAGEMENT

Organizations with
more meaningful levels of employee engagement are
far more likely to have measurements associated with
it.

First, from a
practical standpoint, the metrics are a management
tool.

. The fact that a measurement exists lets

everyone in the organization know that what’s being
measured is important. The caveat here is that the
Employee Engagement Benchmark Report, Demand Metric, December 2013, n=291 measurement must have meaning.

20
MEASURING AND MANAGING ENGAGEMENT
Measurements, therefore, are both tools and affirmations of importance.

Regarding the specific set of measurements examined in this study, all but one – the employee survey – are indirect
indicators of engagement.

For this reason, organizations that wish to make a serious attempt at measuring and managing employee
engagement will need a series of measures or some sort of composite index.

Any organization that is serious about employee engagement should consider an employee survey, which provides the
most direct means of assessing not only engagement, but also a number of other critical workforce attitudes.

21
MEASURING AND MANAGING ENGAGEMENT

Human Resources is a logical candidate, and indeed is

most often identified as having ownership in this
study.

What matters most is for employee engagement to

have the oversight of any department that takes the
Employee Engagement Benchmark Report, Demand Metric, December 2013, n=291 mission seriously, and one that has full executive
support.

22
THE CULTURE OF ENGAGEMENT

Employee Engagement Benchmark Report, Demand Metric, December 2013, n=291

23
THE CULTURE OF ENGAGEMENT

The critical missing ingredient in a total customer-centric culture is the

workforce, which is the delivery mechanism for service to the customer.

These study results now further reveal that organizations with

higher engagement levels have a different culture, one that is not solely customer-centric, but more often customer
and employee-centric.

In fact, the path to

producing world-class customer outcomes starts with the capacity to produce those outcomes: the employees.

24
ANALYST BOTTOM LINE
Employee engagement has long been viewed like diet and exercise: everyone agrees that it’s a smart thing to focus on,
but it’s not always a top priority.

This study confirms the intuition of most savvy business leaders: higher levels of employee engagement have a
measureable impact

The benefits of higher levels of employee engagement are clear and articulated in this study. The formula for creating
and nurturing employee engagement is also simple, but the execution not always so easy.

But when an organization is able to orchestrate the mutual achievement of employee and business goals, it unleashes a
tsunami of energy unified around a shared purpose.

25
ACKNOWLEDGEMENTS

About Cvent

26
ABOUT DEMAND METRIC

27
 Benchmark Report

© 2013 Demand
© 2013 Demand Metric Research Corporation. Metric Reserved.
All Rights Research Corporation. All Rights Reserved.