Your business decisions are made on data. Information that tells you what’s a good investment, and what isn’t. The same is true for the decisions you make around your employee experience. Before investing in a program, you want to be sure that it will produce positive results — both for your employees, and for the business. And once you’ve invested, you want to be about to track your progress along the way, be agile, and adapt your approach based on the results you’re seeing.
Investing in your employee experience
Most business decisions leverage financial metrics like return on investment (ROI), net present value (NPV), or internal rate of return (IRR) to help determine which initiatives to fund. Every one of these metrics requires estimates of the benefits associated with each initiative — usually cost reductions or revenue/profit improvements.
A relatively new source of benefits has recently emerged as companies invest in improving their employee experience. Let’s take a closer look at the description of these benefits and how they’re quantified.
Organizations with employees who are more engaged see an average of 23% higher profitability and 10% higher customer loyalty.
Employee recognition is no longer a nice-to-have. It’s a must for organizations who value the well-being and productivity of their employees and understand the direct correlation between recognition, engagement, performance, and business outcomes. Recognition is the first (and often, the missing) ingredient to an organization’s success. It’s what differentiates leading organizations and drives innovation.
By focusing on strategic recognition and engagement through the Achievers Employee Experience Platform™, CHRISTUS Health — a not-for-profit system made up of more than 600 health centers — saw an immediate 2.9% lower turnover rate, experienced an investment gain of $150,00, and gained a return on investment of 250% for every dollar spent.
“Recognition is an integral part of the culture we have built, and we have done the analysis that shows it is an important driver of the strong Associate engagement we have at CHRISTUS.”
– Ron Croy
Vice President and Chief Talent Officer, CHRISTUS Health
Setting the stage: Why recognition matters
Most HR leaders agree that recognition is fundamental in driving engagement — and engagement is critical to an organization’s success, contributing to stats like a 25-59% decrease in turnover and 41% lower absenteeism.
Traditionally, measuring something as elusive as engagement proved problematic— and achieving it even more so. But now, engagement is no longer considered intangible. With the right tools, making the link is easy to do and aids in the discussions HR leaders have with their c-suite to secure buy-in for a more modernized recognition strategy.
Recognition is a short-term need that has to be satisfied on an ongoing basis — weekly, maybe daily.
Achievers’ customers receive an average of 12.2 recognitions per employee, per year — far greater than the competition. We know that recognition and engagement are positively correlated and that Achievers customers are more likely to be happier, perform better, and contribute to more positive business outcomes.
Food for thought — recognition fast facts:
- Every time an organization doubles the number of recognitions received, overall engagement is expected to increase by 5 points
- Engaged employees are shown to be 17% more productive
- Higher engagement means: less turnover, more productive teams, greater customer satisfaction, and more
The sweet spot: “One recognition per employee every 30 days seems to be the tipping point associated with the most predictable improvements to retention and other key metrics, such as customer satisfaction or performance scores,” according to Dr. Natalie Baumgartner, Chief Workforce Scientist at Achievers.
Organizations with 12 recognitions per employee per year (or more) start to see true organizational transformation.
71%> of highly engaged employees work in organizations at which their peers are recognized monthly or more frequently
Areas of benefit that matter to you
While many benefits are shared across sectors, each have their primary focus. Here are just a few of the ways that the Achievers platform helps organizations drive an improved employee experience.
Quantifiable benefits include:
#1 Reduction in employee recruiting and training costs [$]
Increased employee engagement creates an attractive work environment in which employees thrive and choose to stay.
How to measure:
Expected improvement in turnover rate [%] x Cost to replace an employee [$] x Total number of employees in impacted population [#]*
Case study snapshot: Meijer, a family-owned superstore based out of the U.S. Midwest, wanted to understand the impact of employee recognition on retention and use these insights to keep their best employees.
The result: Through their Achievers Employee Experience Platform™, Meijer was able to identify that recognition had a direct correlation on employee retention. Those who stayed at the company had significantly higher recognition rates than those who left.
Read the full Meijer customer success story.
#2 Lowering the costs associated with safety incidents [$]
In manufacturing and healthcare environments, employee and guest/patient safety is paramount. High levels of employee engagement are shown to result in safer work environments.
How to measure:
Expected improvement in safety incident rate [%] x Average number of annual safety incidents [#] x Cost per safety incident [$]*
Case study snapshot: Deeply concerned about the health and safety of their patients, CHRISTUS Health implemented a Near Miss/Zero Harm program to encourage the encourage the reporting of incidents that could have caused harm. These reports are used to adjust policies and procedures to ensure greater patient safety.
The result: Using their Achiever program to execute this important initiative, CHRISTUS Health saw a six-fold rise in near miss reporting — an outstanding improvement considering that often, near miss incidents go unreported, putting patients at risk.
Read the full CHRISTUS Health customer success story.
#3 Lower program costs through program consolidation
By consolidating all recognition and rewards initiatives into a single platform, organizations increase the visibility of recognition and reward spend, enabling the reallocation of budget from low impact activities to high impact initiatives.
How to measure:
Total current spend across all business units and regions [$] – Cost of single consolidated program [$]*
- Calculate the total cost of running individual rewards/recognition programs, excluding the cost of the rewards being paid out (e.g., software fees, headcount to run all the separate programs)
- Subtract the cost of running a single program (e.g., software fee, headcount to run a single program)
Case study snapshot: Power Design, an electrical contracting company, wanted a program that provided efficiencies around awards reconciliation, saving time, effort, and money.
The result: By streamlining their recognition programs and housing them all in one place through the Achievers platform, Power Design is afforded more time to learn from each program, identify and execute process improvements, and breathe new life into them with fresh ideas and approaches.
Read the full Power Design customer success story.
#4 Increased margin or cost savings through improved productivity
Highly engaged employees are measurably more productive than less engaged employees. And that productivity, if driving customer satisfaction improvements, manifests itself as increased margin due to higher revenues, or, if driving increased employee efficiencies, results in lower employee costs.
How to measure:
Expected productivity increase per highly engaged employee [%] x Increase in % of highly engaged employees [%] x Revenue per employee [$] x Margin [%]*
Case study snapshot: Genesis Hospitality, a collection of hotel chains, aimed to increase productivity and sales through a focus on employee recognition and engagement.
The result: Suite upsells increased by 62%. In addition, Genesis was named one of Achievers 50 Most Engaged Workplaces and became one of Canada’s Best Managed Companies two years in a row.
Read the full Genesis Hospitality customer success story.
#5 Reduction in customer attrition [$]
Acquiring new customers is costly. Achievers helps organizations retain customers and maintain a more stable revenue stream through improved employee engagement that drives customer satisfaction.
How to measure:
Improvement in number of customers retained x Average revenue per customer
Expected reduction in customer attrition [%] x Cost of acquiring a new customer [$]*
Case study snapshot: A national retailer known for innovation in food and retail practices sought to impact their customer satisfaction by leveraging the connection between employee engagement and customer loyalty. Utilizing the Achievers Employee Engagement Platform™, the organization drove business success through recognizing employee contributions, aligning them to business objectives and corporate values, and engaging them every day.
The result: Within the first six months, the retailer experienced a 112% increase in customer satisfaction scores across its stores. A remarkable 70% of the stores achieved a 90% customer satisfaction rating — up from just 33% of stores at the early stages of the program.
Read the full customer satisfaction story.
*Calculations have been simplified for demonstration purposes. To understand the dynamic calculations required to curate a complete picture of your quantifiable benefits, contact us.
These benefits are simply the beginning. For full details on all seven of the Achievers value drivers and to learn how to accurately calculate and measure the quantifiable benefits to your organization’s ROI, talk to a recognition ROI expert today.