The Business Case for Employee Volunteering – Case #1

Employee Engagement: The direct connection to business success

The evidence supporting the importance of employee engagement is incontrovertible. Beyond the reports and analysis, even common sense will tell you that an engaged workforce is important to a company’s well-being and profitability.

But let’s start with the bad news – According to a recent Scarlett Survey, on average, it’s safe to assume that at least 31% of your employees are disengaged. Worse yet, 4% of those who are disengaged are probably hostile. That means that they are speaking poorly of your company to all their friends and family and most likely stealing office supplies. (Seriously.)

On the other hand, according to Gallup, companies with high levels of employee engagement enjoy a significant uplift of every business performance number. Gallup performed a meta-analysis across 199 studies covering 152 organizations, 44 industries, and 26 countries. They discovered that for companies where employees were more engaged than not, their profitability jumped by 16%. Not only that, general productivity was 18% higher than other companies. Customer loyalty was 12% higher and quality jumped up by an incredible 60%.

But what’s the connection between employee engagement and volunteering?

First, it’s important to establish that there is, in fact, a connection. In Ireland, a recent study found that 87% of employees who volunteered with their companies reported an improved perception of their employer. More importantly, a whopping 82% felt more committed to the organization they worked for.

In another study conducted by VolunteerMatch and UnitedHealthcare entitled “Do Good Live Well Study Reviewing the Benefits of Volunteering”, researchers found that employees who volunteer through their workplace report more positive attitudes towards their employer as well as colleagues. An interesting benefit to employers is the improved physical and emotional health of employees who volunteer. That means that if companies want to decrease their health costs, they should be looking to volunteering as an affordable and accessible solution.

Why is there a connection between employee engagement and volunteering?

Specifically, employee volunteering programs increase engagement levels at work when it connects to an individual’s need for meaning and accomplishment. This was first demonstrated in 1968 when Frederick Herzberg article “One More Time, How Do You Motivate Employees?” was published. The article was so popular, that by 1987 it was the most requested article from the Harvard Business Review having sold 1.2 million reprints.

Frederick Herzberg, was a psychologist who suggested that, based on his data, what made people happy at work was not the same thing as what made people unhappy at work. What makes us unhappy at work is lousy pay, lousy work conditions (like your cubicle space or no windows), and a lousy boss. If you fix those it makes a better working condition but it actually won’t make you happy at work.

What makes you happy at work are things like achievement, recognition, more responsibility, the chance to advance, personal growth, etc. These concepts all have to do with personal fulfillment and our humanity. When a company takes time to formally offer an opportunity to get involved in community, what they’re doing is creating the right kind of space for people to express their personal interests and personal desires that go beyond what they’re doing as part of the company. And so it integrates their life inside that building, or that assembly line, or those sales calls with the rest of the world.

If you are more satisfied with who you are as a person, you simply do better in life. People with a purpose outperform those of us wandering around wondering what it all means. Companies that are able to connect people to passions and interests where they feel they’re making a significant contribution as a human being, will see a direct correlation to significant benefits.

Assuming it’s true that employee engagement is increased through volunteering, the business benefit is crystal clear. Companies satisfied with low participation rates or only annual activities, are missing huge financial benefits.

How huge?

According to the 2008/2009 study, Driving Business Results Through Continuous Engagement by WorkUSA, companies with engaged employees experience 26% higher revenue per employee, 13% total higher total returns to shareholders, and a 50% higher market premium.

Think about it. What is your company’s earnings per employee? Microsoft’s is currently at $244,831 per employee. Increasing that number by 26% equals a $63,656.06 increase in revenue per employee. To ignore that potential would be bad business.

For an outstanding discussion on this topic, I recommend setting aside 10 minutes of your day to watch the following video by Daniel Pink, the author of Drive. It’s already been viewed by nearly 6 million people – I promise, you won’t be disappointed.