The Most Important Number You Won’t Find on Your P&L

August 9, 2017 7:55 PM
August 9, 2017 7:55 PM

We pore over our P&L statements to analyze our performance and figure out where we need to improve, but we won’t find the number that will have the biggest impact on our bottom line anywhere in that report.

The number that has the biggest impact on our bottom lines is one that has a direct impact on future customer satisfaction, sales, quality, safety, and employee retention.  The number is your employee engagement score.

Employee engagement isn’t the same as employee satisfaction.  You can have an employee who’s satisfied with their wages, benefits and working conditions but is a poor performer.

Employee engagement is when an employee willingly gives extra effort (over and above the minimum requirements of the job) to help achieve the goals of their employer.

Why is this the most important number?   Here are some of the research results:

Customer Satisfaction

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  • Companies with high employee engagement have twice the customer loyalty of companies with average employee engagement levels.

  • High engagement teams had 37% net promoter scores (NPS) compared with 10% for low engagement teams.

  • Morrison Management Specialists (a food service company) increased client satisfaction by 1 percentage point for every 2 percentage point increase in employee engagement.


Financial Results


  • In companies where 60 to 70 percent of employees were engaged, average total shareholder’s return (TSR) stood at 24.2 percent; in companies with only 49 to 60 percent of their employees engaged, TSR fell to 9.1 percent; companies with engagement below 25 percent suffered negative TSR.

  • Companies with high levels of employee engagement improved 19.2 per cent in operating income while companies with low levels of employee engagement declined 32.7 percent over the study period.


For references on these studies, as well as a long list of other studies on the impact of employee engagement, including the impact on sales, quality, safety, retention and absenteeism: https://www.kevinkruse.com/employee-engagement-research-master-list-of-29-studies/.

It’s not rocket science.  Employees who enjoy what they’re doing and care about their employer’s success will work harder, put more effort into quality work, and treat the customers better than employees who really just don’t give a damn.

That’s why so many executives realize that employee engagement needs to be a core business strategy, not just “an HR thing.”

So, you’ll find the number that will be the best predictor of your future success on your employee survey.

The employee survey is also the best way to measure the factors that impact engagement, which vary by employee but typically include the relationships they have with their managers, how valued they feel at work, and the opportunities they have to grow.  It provides a way to measure the impact of whatever programs an employer puts in place to increase engagement.

The survey itself is also a tool for increasing engagement. When an organization gives employees the survey results and asks for input on what should be priorities for improvement and what needs to be done in those areas, it is engaging employees. When management decides on priorities, takes action on those priorities, and communicates its decisions and actions along with the reasons for them, it demonstrates to employees that they are valued.

Is doing surveys and discussing results with employees more work?  Of course.

But with earnings per share of high engagement companies 147% higher than low engagement companies (according to Gallup), it’s clear smart executives understand its worth.