Top Workplaces Benefit From Higher Engagement and Lower Turnover

by Laura Santiago

Data Insights From the Energage Research Desk

Top Workplaces benefitEnergage names Top Workplaces in 50 regions across the U.S. each year. Nationwide, more than 50,000 organizations have participated in the Top Workplaces program since 2006. And in 2017, we awarded approximately 2,500 organizations with the Top Workplaces honor.

This sparked our curiosity. We wanted to know what changes — if any — can be observed after an organization has earned a Top Workplaces ribbon. Do they reap benefits beyond the positive press and recognition? Are there bottom-line benefits? So, we tapped into the Energage Survey data for a closer look and here’s what we discovered.

What the data tells us

We studied organizations with at least three years of Top Workplaces survey data. Then we compared the year before and the year after they were named for the first time. The largest score differences included these statements from the Energage Survey:

  • Communication Down (+6%)
  • Perceptions of Pay (+5%)
  • Execution (+5%)
  • Communication Up (+4%)
  • Referral (+4%)

And, even more significantly, we found:

  1. Employee engagement increased five percentage points, from 58% to 63%. Top Workplaces organizations continue to improve their ability to unleash potential. This is especially significant considering the engagement level at average U.S. organizations hovers around 31%.
  2. Employee turnover dropped seven percentage points, from 31% to 24%. This is a decrease from one in three employees to one in four!

Turns out, the data supports our hypothesis: Being proactive about building a healthy culture can have a positive effect on the employee experience, not to mention business outcomes. Our findings also corroborate a study recently published in the Academy of Management Journal. 

Top Workplaces benefit from bottom-line savings

First, saving the cost of turnover
Let’s put this into perspective. Assume you’ve got 150 employees and your average recruiting cost runs approximately $4,500. This is an expense — which, by the way, is a conservative estimate — you incur each and every time you have to replace an employee who left your organization for the local competition. Dropping seven percentage points in turnover (31% to 24%, for instance) translates to a savings of approximately $47,000. And for an organization with 500 employees, this savings jumps to a whopping $157,000.

Then, saving the cost of lost productivity
To be a bit less conservative and more inclusive of all the real costs of employee turnover, consider the lost productivity your organization racks up while sourcing and onboarding replacements. If the average salary of the employees you are replacing is $45,000 and the cost is 33% of their salary, a 150-person company would save approximately $156,000. Similarly, reducing turnover at a 500-employee organization would save an estimated $520,000!

And finally, saving the cost of disengagement
Turnover is expensive, that’s for sure. But there’s also a not-so-obvious cost associated with disengaged employees who stay. These are the people who would rather spend their days elsewhere. Instead, they wreak havoc on productivity, quality, and even customer service. This is why higher employee engagement pays off. Because when all employees are motivated to give their very best at work, the full potential of your organization is unleashed.

It pays to be intentional about culture

Every organization has a culture. It’s what you do about it that matters. You can let it develop on its own — or you can get intentional about it. Leaders at Top Workplaces recognize culture is a key differentiator and they use it as a competitive advantage.