How Do You Calculate the ROI on Employee Engagement?

Employee engagement may be defined as proactively and passionately adding value while aligning with the company mission. Engaged employees demonstrate their commitment through their hard work, communication and body language. Because engagement impacts your bottom line through higher productivity and less turnover and absenteeism, knowing what a fully engaged team can do for your business is essential. Here’s how to calculate your ROI on employee engagement.

Reasons Employee Engagement Matters

Engaged employees are more focused and efficient than nonengaged employees. Engaged staff openly communicate about experiences, triumphs and challenges. They genuinely care about their work and don’t let anything stand in their way of attaining success. Engaged employees appreciate receiving feedback on their strengths and weaknesses so they can improve their performance.

Calculate Your ROI on Employee Engagement

To determine your ROI on employee engagement, begin by calculating your revenue per employee, which measures how efficiently you utilize your employees. Divide your annual company revenue by your average number of employees. For example, if your annual revenue is $31,550,000 and your average number of employees is 29, $31,550,000/29 means you earn approximately $1,087,931 in revenue per employee.

Next, determine your cost of absenteeism per employee. For instance, if your absenteeism per employee averages out to be 1.2% of total working days (3 days per year), take 1.2% of revenue per employee and add 1.2% of average employee salary. Based on the previous example, if your revenue per employee is $1,087,931 and average employee salary is $61,812, $1,087,931 x 1.2% = approximately $13,055 and $61,812 x 1.2% = approximately $742. Adding $13,055 + $742 means your cost of absenteeism per employee is $13,797.

Then, calculate your turnover rate by dividing the number of employees who left during the year by the average number of employees during the year. Based on the previous example, if your number of employees who left during the year is 11 and average number of employees during the year was 129, 11/129 means your turnover rate is 8.5%.

Next, determine your total cost of employee turnover by multiplying the average cost to replace an employee by the number of employees who quit or were fired last year. According to the Society for Human Resources Management, it costs 6-9 months of an employee’s salary to replace that employee. Nine months’ salary was used for this formula. So, $61,812/12 = $5,151 per month in salary; $5,151 x 9 = $46,359 for nine months’ salary. So, on average, if your cost to replace an employee is $46,359 and 11 employees quit or were fired last year, $46,359 x 11 = $509,949 in employee turnover.

Determine Your Total ROI

Finally, determine your total ROI value, which is the amount of revenue added due to a 20% increase in employee productivity, plus the money saved from a 41% reduction in absenteeism and 40% decrease in turnover. Based on the previous example, an increase in revenue would bring in an additional $28,068,594 ($1,087,931 x 20% = $217,586; $217,586 x 129 = $28,068,594). A reduction in absenteeism would save you $1,050,060 ($13,797 – 41% = $8,140; $8,140 x 129 = $1,050,060). A decrease in turnover would result in an additional $305,969 in revenue ($509,949 – 40% = $305,969).

Hire Engaged Employees

Hire engaged employees through Casey Accounting & Finance Resources. As a top Chicago employment agency, we provide high-performance candidates who make strong contributions to their companies. Partner with us today!

6 Ways to Harness the Power of Social Media to Attract Candidates

The majority of job candidates use social media to find better employment opportunities. Along with searching for job openings, candidates use social media to learn about potential employers, company culture and what a day at the office is like. For this reason, you want to maximize your use of social media to promote your company and open roles. Here are six ways you can use social media to attract qualified finance and accounting candidates.  

Build a Strong Brand 

Because candidates typically read six or more reviews before forming an opinion of a company, use social media to build a strong brand. Be sure you have an active Facebook page, Twitter account and LinkedIn page. Make sure your content is current and you have a strategy to keep it updated.   

Communicate Company Culture 

Show what your company mission, vision and values are and what a day at the office is like. You will attract more qualified candidates who have the required skills and experience and fit with company culture. Be sure to add photos and videos to your posts. Show interesting projects and events held in the office so candidates have an idea of what to expect. 

Target Your Audience  

Tailor your social media campaigns to reach your target audience. Identify who your ideal candidates are, then create tailored ads and messages designed for them. Notify your social community that you are hiring by updating your LinkedIn profile with a message about open opportunities or adding a recruitment banner to your Facebook and Twitter pages that links to your job listings.   

Continuously Build Relationships  

Connecting with substantial numbers of people increases your network of potential candidates. Even if your connections are not qualified or a good fit for open roles, they may know someone who is. Keep your posts consistent and valuable so you engage in two-way conversations with your audience. 

Attract Passive Job Candidates 

Although most candidates are not actively sending out resumes, they still are on the lookout for new opportunities. Posting available positions gains the attention of passive candidates who probably would not have known about the opening otherwise. You may gain their attention by using hashtags or purchasing paid social media advertising to target who sees your ads based on demographic and geographic ad criteria.   

Request Help  

Ask your existing social network to help you find qualified job candidates. When a position opens up, request that your fans, followers and connections share your posts. Include your employees in the sharing process. Because they know and love your company, they can better communicate what a great place it is to work. Plus, candidates who receive a personal invitation to apply from someone they know, and trust are more likely to respond.   

Find Qualified Finance and Accounting Candidates 

Find qualified finance and accounting candidates through Casey Accounting & Finance Resources. As a leading Chicago employment agency, we review resumes, complete prescreening and in-person interviews, handle background checks and negotiations and more. Get in touch with us today!