Unlock Your Business Success:The ROI of Employee Engagement

The landscape of small and medium-sized enterprises (MSMEs) is everchanging. The ability to absorb these changes varies depending on the nature of the business, Industry, Geography and many other factors. But the effect of that changes is always severe for MSMEs compared to larger corporations and businesses. Though the sleepless nights for all business owners may feel similar, the shape-size-and-impact of crisis need suitable understanding and remedies for smaller businesses.

Engagement requires that we bring both our emotions and our actions to the table—our hearts, spirits, minds, and hands.

-Tracy Maylett, Ed. D

CEO, DecisionWise

Amongst all variables which have direct impact on businesses, there is a critical factor which stands out as a game-changer for all companies: Employee Engagement or EE. Engaging your workforce isn’t a buzzword anymore, it’s a powerful strategy with quantifiable returns on investment (ROI), for any team, any organization. In this blog post, lets delve deep into the financial benefits of cultivating an engaged workforce in MSMEs, backed by data and insights from leading Research Institutes, Consultancies and Knowledge Societies.

Before we go further, does this question need our attention: What’s Employee Engagement (EE) by the way? It should get our due attention because Employee Engagement (EE) means different things to different people and definitely evokes different emotions, based on the experience one has had. One of the best definitions is provided by Bob Kelleher, the author of the classic book “Employee Engagement for Dummies”. I recommend the book to all EE enthusiasts. 

“Employee engagement is the mutual commitment between an organization and an employee, in which the organization helps the employee meet his or her potential and the employee helps the organization meet its goals.”

It’s widely accepted that EE goes much beyond the formal transactional contract between the Employer and the Employee, beyond employee being just “happy”; it’s essentially capturing both head and heart of everyone. As Tracy Maylett, CEO, DecisionWise mentions: “Engagement requires that we bring both our emotions and our actions to the table—our hearts, spirits, minds, and hands.”

The ROI Puzzle: What Does Employee Engagement Mean for MSMEs?

As we dive into the numbers, its essential to ask, how to measure the ROI of emotional commitment? If EE is about emotional commitment, feeling connected, valued, and motivated etc, how to capture these components numerically?

Understanding the numbers

There has been many studies and reports published by some of the best organisations, Knowledge Societies, and consulting firms in the world, including Gallup, Harvard Business Review (HBR), Deloitte etc, SHRM etc. They not only have deep understanding of the elements that influence EE, but also has the data to back up the findings

"Engaged employees are 17% more productive."


For example:

  1. Only 32% of employees are engaged at work.
  2. 17% of workforce are actively disengaged.

Okay, that’s well known. What about the cost part? Specially, cost of disengagement?

  1. A company loses $3,400 for every $10,000 a disengaged employee makes.
  2. For company with 250 employees, low employee engagement can cost more than $3 million per year!

The Financial Perks of Employee Engagement

1. Enhanced Productivity and Profitability: A highly engaged workforce is a productive workforce. According to Gallup, engaged employees are 17% more productive than their disengaged counterparts. This surge in productivity translates into higher profitability. Companies with engaged employees outperform their competitors by up to 202%.

Employee Engagement is about Employee’s:
1. Emotional commitment
2. Willingness and discretionary efforts

2. Reduced Turnover and consequently, reduced Recruitment Costs: High turnover can be a financial drain on MSMEs. Engaged employees are 87% less likely to leave their jobs than disengaged ones. When you retain talent, you save on recruitment and training expenses.

3. Increased Customer Satisfaction and Loyalty: Engaged employees provide better customer service. Satisfied customers are more likely to remain loyal, leading to increased revenue. A study by Temkin Group found that companies with highly engaged employees have a 10-15% higher net promoter score.

4. Innovative Edge: Engaged employees are more likely to contribute innovative ideas. According to Deloitte, companies that nurture innovation are 30% more likely to be market leaders.

Putting Numbers into Perspective

Now, let’s apply these insights to an MSME context with an example: Consider an MSME with 50 employees and an annual revenue of $5 million. If they raise their engagement levels by just 5%, the financial impact can be substantial. 

"Engaged employees are 87% less likely to leave their jobs."


Productivity Boost: A 5% increase in productivity can result in an additional $250,000 in revenue.

Turnover Savings: With reduced turnover, they save around $50,000 in recruitment and training costs.

Customer Loyalty: A 10% increase in customer loyalty can lead to an extra $500,000 in revenue.

Innovation Advantage: Being more innovative can help them capture an additional $150,000 in market share.

The Bottom Line: Investing in Engagement Pays Off

When you consider the potential financial gains, it becomes clear that investing in employee engagement is not just a feel-good strategy; it’s about business, profitability and remaining competitive in the market place. Engaged employees drive profitability, reduce turnover costs, enhance customer loyalty, and give your business an innovative edge.

As you embark on your journey to unlock the ROI of employee engagement in your MSME, remember this: the investment you make in your employees’ emotional commitment will pay dividends that go far beyond the balance sheet. It may not show in the accounts immediately, as the result take time shape up. But tin the long run, it can definitely result into either situation:

"Companies fostering innovation are 30% more likely to be market leaders."


  1. It’s great I started at the right time!
  2. I wish I started at the right time!

Whether you’re a business leader, an HR professional, or an employee, the financial benefits of engagement should not be underestimated. It’s a win-win scenario for all the stakeholders and definitely a must-have tool for a businesses or companies to use it to their advantage.

In our long experiences in our respective work areas, realizing what an incredible, untapped potential employee engagement has, Srikanth and I have embarked on a very special and curated journey Employee Engagement Academy.

Employee Engagement Academy is an online academy for HR Professionals, Business Leaders and Entrepreneurs where we curate Content Courses, Consulting, Community, Conference and Connections to help them improve Employee Engagement in their Organizations.

In today’s VUCA world (Volatility, Uncertainty, Complexity, and Ambiguity), Recruiting and retaining quality talent is always a very high priority for Entrepreneurs, Businesses Owners and their HR leaders. And maintaining a high levels of Engagement and Motivation among employees is the only way to have a healthy workforce. Through Employee engagement Academy, we help HR Professionals, Business Leaders and Entrepreneurs achieve this in their organizations through:

– CONTENT, to stay informed about the latest employee engagement trends

– COURSES to help them learn and execute effective employee engagement strategies

– CONSULTING projects to achieve results at great speed

– COMMUNITY of likeminded professionals to network and brainstorm

– CONFERENCES to learn from the best in the industry

– CONNECTIONS where service seeker and service providers can interact and help each other with their services.

What’s your next step?

So, are you ready to unlock the potential of your business through employee engagement?

  1. Check: Employee Engagement Academy website and Employee Engagement Academy LinkedIn Page
  2. Register for our upcoming Employee Engagement Webinar
  3. Join our FB Community
  4. Follow the founders on LinkedIn:
    1. Subrata Kabiraj
    2. Srikanth Acharya

Resources you can check:

  1. Gallup’s State of the Global Workplace Report: https://www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx
  2. The Harvard Business Review: Numerous articles and research papers in HBR shed light on the financial implications of employee engagement.
  3. Deloitte’s Global Human Capital Trends Report: https://www2.deloitte.com/xe/en/insights/focus/human-capital-trends.html
  4. Knowledge societies: SHRM, CIPD and other HR Societies
  5. Special Reports: Mercer, McKinsey, State of the Global Workplace Report
  6. Temkin Group. “Employee Engagement Benchmark Study


  1. Everything you Need to Know From Gallup’s 2023 State of the Global Workplace | LinkedIn

      2 Must-Know Employee Engagement Statistics [2023]: Trends, Benefits, And More – Zippia