Employee Engagement: The case for Finance Teams to get involved.

Experts say that employee engagement and employee satisfaction are the biggest operational concerns within any organisation. When your employees are actively engaged, the positive impact on productivity and profit margins are measurable. In the finance team, you control company budgets – where it is spent, how it was spent, and ensure efficient and accurate reporting is delivered. But what impact does employee engagement have? How could this powerful intangible be harnessed to really drive profit margins? Let’s take a look at why more and more Finance Heads are taking this subject as seriously as the Head of HR.

Not Just an HR Issue

Employee engagement gains more traction and attention in a business when departments work together in pursuit of clearly communicated corporate goals and strategies – genuine engagement is key to success in achieving this collective understanding and effort. Much of this engagement has financial implications. Employee engagement cannot be confined to being just an issue for HR teams. Unless the finance team genuinely understand and measure the impact of employee engagement, they are missing a key business metric, and with it the opportunity to provide real board-level focus on this area.

The traditional role of the finance team is evolving quickly as new technologies reduce repetitive tasks and free up resource. To stay ahead of the game, finance professionals must take into account more than just the payroll and direct costs associated with employees – they must look to capture financial and non-financial information on staff behaviour and provide business insight into the financial impact of such things as overall staff happiness, break usage, out of hours working, employee stress, etc. Failing to recognise that employee engagement needs to be measured and monitored will leave some financial variances unexplained. Employee engagement can play a pivotal role in preventing your top performers from leaving and prevent your organisation from creating more of them.

When employees are disengaged, the last place they want to spend their time is at work. The finance departments’ key role is to handle the company budget and financials. Low engagement and potential absenteeism have a significant impact on productivity, recruitment, training and payroll costs. Finance teams need to be vigilant and ensure employees are aligned to business goals. How do you do this? By ensuring the systematic delivery of a genuine employee engagement strategy – it costs you nothing and may well be the one thing that will drive up margins.

Why you should care?

The study and measurement of employee engagement is a growing trend with research showing employees with high engagement levels are 50% more likely to exceed performance targets.

Accelerating the pace of closing books, generating accurate reports, controlling costs, and forecasting financials are still core objectives of finance operations. However, ensuring employee engagement is also on the agenda will increase the likelihood of those financial targets being achieved.

Research shows that employee engagement has a strong impact on business results, organisations with high engagement are 78% more profitable than organisations with low levels of engagement. Key challenges facing finance teams such as reducing operational costs, easing the pressure on tight margins and driving up output are all objectives that can benefit from an employee engagement strategy that has business growth as its ultimate goal. Far from being “just an HR thing”, employee engagement needs to be understood within finance teams in order to be measured – payroll is a significant cost in almost every business and the finance team have a duty to ensure that the business return on this outlay is maximised. Without measuring employee engagement how can you do this?

Indicators of Improved Financial Performance

Increased Productivity

When employees enjoy what they do, they are completely involved in their job and performing to the best of their ability, which in turn generates better business results. Companies with high employee engagement achieve five times more revenue growth. When the engagement level among employees increases, it increases their productivity, which in turn improves the financial standing of an organisation.

Lower Employee Turnover

When employees are engaged in their jobs and are fully satisfied with their career and the organisation, they remain with that organisation. This decreases the costs associated with locating, attracting and training new employees, all things the finance team has to find a budget for. Reducing these costs with loyal and engaged employees means an organisation can plan with confidence.

Improved Customer Satisfaction

When employees are engaged and love their job they serve customers better. This helps establish long term relationships with customers, and in turn, increases the number of loyal customers and promoters – ultimately increasing sustainable business profits.

There are many other factors that contribute to the productivity and profitability of any organisation. Employee engagement is not the only factor, but it is one of the most important ones. Delivering on employee engagement plays a significant role in financial decisions, spending, and investments. Getting engagement right massively benefits your finance team and accelerates business growth.

Learn how we can help you better balance the finances with a tangible employee engagement strategy, here, and transform your business, your drive for increased margins may depend on it!