ROI of employee engagement programs

The Real Deal with ROI of Employee Engagement

I’ve been the CFO of a billion dollar media business, helped start dozens of venture-backed companies and I’m a fanatic about proving the numbers. “Warm and cuddly” initiatives are great, but it doesn’t mean much in a financial context.  I’m all for saving the world—environmentally or otherwise—but it has to make business sense first and foremost. And I'm not alone. CFO's put only 17% relative weight on the qualitative narrative of social and environmental impacts compared with 73% weight on financial return and payback when considering capital investments (Source: Accenture).

Done right, employee engagement has positive financial impacts.

There’s a growing amount of research showing employee engagement programs that use products like WeSpire have a dramatic impact on employee retention and productivity, as well as financial performance. The more engaged an employee is with their company, the more likely they are to work hard and continue as a happy employee.  This is particularly true when engagement is founded on doing good as a way to improve financial returns, and not just as a way of making money for shareholders.

Calculating the ROI of employee engagement with WeSpire

Here at WeSpire, we have a very precise tool to measure what we call the “hard” ROI of using our platform. Each of the thousands of actions a participant might take on our platform is evaluated by our staff scientist for its sustainability impact on things like water, waste and energy. Customers can either use national averages or use their own costs for those resources. Then, the action is categorized as:

  • one-time in nature (I walked the stairs rather than using the elevator),
  • one time with lasting impact (I changed the light bulbs in my office to energy saving bulbs),
  • or a recurring habit (I always use a reusable water bottle at lunch rather than paper cups in the cafeteria).

Our customers can then use our ROI calculator to determine the hard dollar savings generated from their employees’ actions.A sneak peek at WeSpire's ROI Calculator

Real change (and big ROI) on a platform like WeSpire doesn’t happen until a company perceives the platform as foundational to its corporate culture. Dipping your toe into this kind of thing doesn’t work. For that reason, our product is 100% white-labeled, so employees are unlikely to even know what the heck “WeSpire” is. They will only know that their company has a really cool platform where employees collectively participate in doing good.

Leveraging the network effect for deeper savings

What I have noticed is that there is a very strong network effect when it comes to the ROI of employee engagement on implementations like WeSpire.  When we launch with a new customer, we first think in terms of the number of users we are targeting within a defined pool of employees. Then, we consider how big that pool is as a percentage of the total population in the organization. What we’ve seen is that the higher the percentage of employees active on the platform, the higher the ROI per active employee. Likewise, the bigger the pool is as a percentage of the total employee population, the higher the per employee ROI. Hence, the “network effect” strengthens and the program gains momentum as the number of new users increases.

If you want to witness the network effect within your employee engagement program, there are certain things that you can start doing—even the CFO has a key role to play in making the business case for employee engagement. Stay tuned for Part 2, where I will detail some tried and true ways to maximize the ROI of employee engagement.

In the meantime, I encourage executives around the globe to realize that the power of an employee engagement program is the ability to bring a deeper sense of meaning to the job you are asking your employee to do. With greater meaning comes better understanding and personal investment in the position, which leads to better performance and deeper loyalty to the company. All of which, are good for the bottom line.

Continue reading about The Real Deal with Employee Engagement ROI: Part 2.


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