Regular readers of our Small Business Blog know that at Summit Financial Resources, we’re fans of quirky holidays. So when we found out that the third Thursday in April is National High Five Day, we thought it was the perfect opportunity to talk about the importance of employee engagement.
Employee engagement is not to be confused with employee satisfaction. Engaged workers do not simply like their jobs, they are motivated to come to work, know their responsibilities inside and out, and understand how they contribute to their company’s success. They care about the needs of their coworkers and the business as a whole because they have a personal stake in its success.
In order for your small business to grow, you need more than a desirable product or service, a solid business plan, and adequate financial resources. It’s important to develop a strategy for creating a culture in which your team is genuinely engaged in your company’s mission and goals. By personally connecting with your brand promise, they will be committed to providing your customers and vendors with a consistent, quality experience.
Here are seven reasons why engaging your employees matters to the future of your small business:
1 – Greater profitability.
Simply put, investing in employment engagement is critical to your bottom line. Numerous research studies have shown that a fully engaged workforce will outperform a team that is disengaged. One example: Gallup reported that companies with more engaged employees were 22% more profitable than those with employees who were not engaged.
2 – Improved retention and recruitment rates.
It stands to reason that employees who are engaged are less likely to leave their jobs. In fact, according to one study, 56% of not engaged and 73% of actively disengaged employees are looking for jobs compared to just 37% of engaged employees.
In addition, a small business known for its engagement efforts will attract talented employees who will be just as engaged as the current team. Happy, connected employees are far more likely to recommend their employer to friends and acquaintances, which can help lower recruiting and hiring costs.
3 – Higher levels of productivity.
The more efficient and productive your employees are, the more successful your small business will be. Teams with high employee engagement rates are 21% more productive than those with low engagement. On the other hand, disengaged workers have higher absentee rates and, according to Gallup, produce 60% more errors, costing U.S. companies $450 to $550 billion a year in lost productivity.
4 – Increased customer loyalty.
Consumers expect outstanding service and a positive buying experience from the businesses to which they are loyal. Dissatisfied customers will quickly move on, most likely to one of your competitors. There is no question that happy workers help create happy customers. A study by online software provider Cvent found that customer retention rates are 18% higher on average when employees are highly engaged, proof that by boosting employee engagement, you can help increase customer loyalty.
5 – More communication and collaboration.
A supportive company culture encourages communication and fosters connections, which ultimately results in greater productivity. Employees who are engaged are more likely to communicate openly and collaborate with their colleagues than those who are disengaged, resulting in lighter workloads for overburdened teams, less internal conflict, and increased company loyalty. According to McKinsey, improved communication and collaboration can raise the productivity of workers by 20% to 25%.
6 – A happier workplace.
Many employees are seeking recognition for their contributions, not necessarily a bigger paycheck. One study found that pay ranks no higher than fifth on the list of most important reasons why people excel in their jobs. What motivates employees most is how they are made to feel by the organizations they work for and the bosses who manage them. Small business owners who provide a positive environment and show genuine appreciation have happier, more dedicated employees and higher company morale.
7 – Commitment to success.
When your employees are emotionally invested in your company, they will do everything in their power to help it succeed. Employees who are engaged are more likely to remain committed to their company, even during stressful or difficult times.
Engagement begins and ends with reinforcing to your employees that they are an integral component of your company and you cannot achieve and maintain your goals without their best efforts. Investing time and resources in helping your team engage is essential to ensuring a healthy future for your business.
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Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.