Employee Engagement ROI

Employee engagement is essential for company success. But, if you’re not tracking employee engagement ROI, how can you justify the investment and ensure executive buy-in? And, how can you be sure you’re putting the focus on the right initiatives to get results?

Return on Experience, or ROX, can reveal where your current employee experience falls short - this is a vital first step in increasing employee engagement and communication across your enterprise. In this guide, you’ll find the answers to important questions about employee ROI and ROX. You’ll also uncover the key metrics you need to consider, discover how to calculate the ROI of employee engagement, and learn about some of Unily’s client success stories.

What does Return on Experience (ROX) mean?

You’re probably already familiar with return on investment (ROI) - the performance metric for directly measuring the efficiency of a particular investment, relative to cost.

Return on Experience, or ROX, is a different take on ROI. ROX is valuable because it measures various factors - some tangible, and some less tangible - that directly influence customer and employee experience. These ultimately have a huge impact on your bottom line. In comparison, ROX relies more heavily on user experience and intangible benefits than ROI.

Digital experiences are a huge part of your customers’ or employees’ interactions with your organization. In today’s world of business, it’s these experiences that build relationships, not products. Coca-Cola doesn’t offer soft drinks, it sells community. Volvo doesn’t sell cars, but safety.

These stories define the relationship between people and your brand. Understanding how improvements to customer and employee experiences help shape this relationship is crucial for knowing where to make improvements.

With smart data on the tangible results that employee and customer experiences have on your profit, your enterprise can make smarter, more informed investments. This means you can enhance these experiences and boost your bottom line.

How do you measure ROX?

Several metrics can be used to measure Return on Experience and the ROI of employee engagement.

Absenteeism: The link between employee engagement and absenteeism is real. Employees are more likely to be disconnected and absent when they aren’t engaged.

Retention rates: Engaged employees are far less likely to jump ship. A high turnover rate can be an indication of them having a poor experience.

Reduction in onboarding time: Average cost-per-hire. Intranets that centralize resources and streamline the onboarding process can help employees get up to speed faster, in turn cutting costs.

Information search time gain: Stakeholders should take note of how much time employees are losing while searching for information. This figure can be reassessed post intranet implementation. In virtually all cases, a dramatic time saving is immediately clear.

Meeting time reduction: Unproductive meetings are costly to your enterprise. Intranets reduce the need for face-to-face discussions by providing users with a host of collaborative tools that drive efficiency and connectivity simultaneously.

Number of visits, likes, and shares: Using resources on internal comms is useless if your content isn’t engaging. A well-designed and targeted platform should generate active participation, including comments, likes, and shares. These metrics also indicate that users are engaging with the platform and consuming relevant content promptly.

Switching between apps: The more employees are switching windows, tabs, and apps, the more productivity suffers. One of Unily’s clients experienced a total cost savings of almost $800k every week by minimizing distractions and optimizing their employee experience (more on this later).

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How do you calculate ROI for employees?

In general, measuring employee engagement ROI isn’t as complicated as you might think. You’re measuring the yield of an investment against its initial cost. The basic formula looks like this:

ROI [%] = (final value of investment − initial value of investment) / cost of investment × 100

Another variation of the same employee return on investment formula also compares gains against initial cost. But the scope is more limited, as it doesn’t consider an investment’s increase in value over time. The calculation looks like this:

ROI [%] = (net investment benefits − cost of investment) / cost of investment × 100

You can also calculate the ROI of an intranet with a focus on employee experience by using tools like an intranet ROI calculator.

Calculating ROX, on the other hand, requires a different approach. Rather than the value of an investment, an ROX formula instead focuses on the value of the benefits of the experience:

ROX [%] = net value of benefits to experience / cost of investment x 100

Both ROI formulas are useful as calculations to build a business case for a new employee engagement initiative. The ROX formula offers an additional benefit by building on these initial calculations and examining the value beyond the investment. It considers the broader, more intangible aspects of the customer and employee experience, and continues to prove the value of your employee engagement investment over the long term.

Measuring employee ROX example

Since calculating ROX is more complex than ROI, let’s look at an example.

Imagine you’ve invested $50k in new technology to enhance the employee experience and strengthen employee loyalty. To measure the ROX, you could look at improvements in staff turnover rates and increased employee satisfaction rates.

To quantify the value of reduced staff turnover, you can use the cost savings associated with lower onboarding costs and reduced disruption to productivity. For this example, your new investment resulted in a 10% drop in staff turnover, saving $40k.

To get the value of improved employee satisfaction, you can measure historic performance against historic employee satisfaction rates. From there, you can determine the impact of the increase. In our example, your investment directly led to a one-point rise in employee satisfaction scores. If you use the previous performance against employee satisfaction scores you measured, you’ll find out that, on average, one point of ESAT scores is equivalent to $75k more revenue.

Applying this to our formula, the ROX of this investment in employee experience would look like this:

ROX = ($40k + $75k) / $50k x 100 = 230

For our example, the value of investing in employee experience - the ROX - was 230%. If you’re looking solely at the net benefits of Return on Experience, this calculation would offer a 130% return in net benefits.

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Use our simple ROI calculator to see how much money you could save by giving employees fast, comprehensive access to everything they need to do their jobs effectively.

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How does employee engagement increase profitability?

Now for the big questions. Ultimately, how does employee engagement increase productivity? And, just how valuable are employee Return on Experience and intranet ROI?

To arrive at a figure that truly captures employee engagement, it's vital to hone in on a handful of impact areas. Let’s take a look at how tracking and acting on key ROI metrics leads to improved profitability.

#1. Productivity

Companies lose billions each year due to outdated technology and inefficiency. For most enterprises, nearly all known productivity leeches can ultimately be traced back to poor digital tools.

Too many employees spend their day battling distractions. Everything from mass email messaging to constant platform-hopping can hurt a workplace’s output level.

Microsoft found that workers switch windows an average of 373 times per day, or approximately every 40 seconds while completing tasks. Intranets with integrated frameworks drastically reduce transitional distractions by providing users with a single point of access to content and data from virtually any third-party application.

Enhanced search features solve another major productivity pain point: the retrieval process associated with information gathering. According to McKinsey, employees lose nearly 10 hours per week searching for information. The advanced search capabilities provided by an intranet can streamline workflows by tailoring results to specific needs.

In short, deploying a high-functioning intranet can quite literally buy you time. When users have the tools needed to maximize performance, an enterprise’s success will follow the same upward trajectory.

Productivity success story

Case Study

Shell powers employee experience with a Unily intranet

Discover how Shell is transforming employee experience for 82k employees with Unily, driving savings of over $42m a year in productivity gains.

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When comparing common tasks performed on Shell’s Unily platform versus their old legacy system, employees were able to access tools and information 66% faster.

If applied across Shell’s 140,000-strong workforce, this equates to 140,000 minutes saved daily. The increased productivity led to total cost savings of almost $800k every week, showcasing the financial benefits of measuring your Return on Experience.

#2. Employee experience

Data from IBM found that organizations scoring in the top 25% on employee experience receive nearly three times the return on assets compared to those in the bottom quartile. These top-performing enterprises also report double the return on sales.

Similarly, research from futurist Jacob Morgan indicates that organizations that prioritize employee experience have more than 4 times the average profit and over two times the annual revenue. These enterprises are also nearly 25% smaller, which suggests higher levels of efficiency and innovation.

Many organizations don’t have workplace technology figured out — as a result, employee experience is suffering. Deloitte found that only 38% of respondents were satisfied with work-related tools and capabilities.

Intranets and employee experience platforms have the features and functionalities needed to be a true one-stop shop for optimizing employee ROI and engagement. Users can connect with peers through intuitive social networking features, access every tool needed to perform seamless work, and receive personalized news and updates.

Mobile responsive capabilities are another major employee experience win. According to Indeed, having the option to work remotely boosts employee morale significantly. It can also benefit an enterprise’s bottom line. For instance, Dell reported a $12m saving by creating more flexible workplace options.

Employee experience success story

"Digital satisfaction rates climbed from 5.7 to 6.1 after Shell implemented a new intranet, based on a survey of over 900 employees."

Everyone wins when employees are engaged: revenue rates soar, sales improve, and staff turnover decreases - all of which influence the bottom line.

#3. Communications

Enterprises are paying the price for communications blunders, to the tune of $62.4m per year according to the Society of Human Resource Management.

The same research pinpointed inadequate messaging to and between employees as the root cause for the losses. It also noted that the problem is particularly prevalent in larger organizations.

Digital workplaces bridge potential disconnects by providing each user with intuitive communications pathways. Intranets encourage both top-down and bottom-up messaging and enable specialists to measure performance with easy-to-use analytics.

Extensive internal comms features roll out timely and targeted updates to key elements of a workforce, while segmented social channels allow for multiple focused conversations simultaneously.

Communications success story

Unily Flight Centre Intranet Case Study

Case Study

Flight Centre powers productivity for 19,000 employees with a Unily intranet

Flight Centre is one of the world’s largest and most successful independent travel retailers. Download the case study and discover the secret behind their award-winning intranet.

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A targeted intranet helped Flight Centre reduce non-essential internal email traffic by 88%.

$62.4m is a steep price to pay for miscommunication. Intranets drive collaboration and connectivity, leading to hours and dollars saved.

#4. Engagement

According to Harvard Business Review, organizations are spending hundreds of millions of dollars on employee engagement programs with no results to show for it. Instead of sustained gains, most initiatives amount to a short-term boost followed by a period of decline.

Digital workplaces swim while other initiatives sink because platforms can grow and evolve with the demands of a workforce. As opposed to a one-off upgrade, new features and updates ensure that the solution remains relevant and continues to generate buzz.

An intranet’s specialty functions go a long way toward fostering sustained engagement and Return on Experience. Recognition capabilities, such as customizable badges and homepage takeovers, motivate every user to reach their full potential. Spotlighting is also linked to boosted retention rates. A study by the Society of Human Resources Management found that nearly 70% of executives saw a correlation between improved recognition and reduced churn risk.

Engagement success story

'Biogen transforms enterprise corporate communications and collaboration' case study flat pages

Case Study

Biogen transforms enterprise corporate communications and collaboration

Biogen keeps patients and physicians front and center in its daily work. With more than 7k employees across 40 countries all working together to research and develop medicines to transform neuroscience, collaboration truly lies at the heart of the company. Biogen sought to evolve their intranet into an employee experience platform that would encompass the tools and collaboration means to provide an unparalleled ability to further medical science.

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Biogen drastically improved engagement rates by providing employees with user-specific tools. The enterprise’s intranet offered more than 170 unique and easily accessible applications, including 45 which were specifically designed to boost connectivity amongst affiliates outside of US headquarters.

“How to fix engagement?” is the million-dollar question. With endless options and abilities, digital workplaces are the answer to improving employee return on investment.

#5. Ideation

It’s common knowledge that to prosper, companies need to ideate. McKinsey found that 70% of senior executives rated innovation as one of the top growth factors, yet 65% aren’t confident about the decisions they make to stimulate new ideas.

Intranets supply many of the ingredients needed to bring innovation culture to life. Digital solutions encourage everyone to weigh in, maximizing knowledge-sharing capabilities.

From a stakeholder’s perspective, intranets can also provide the insight needed to make decisions that prove revolutionary. Real-time metrics surrounding engagement, participation, and resonance pinpoint what’s working and what isn’t, in turn optimizing workflows to guarantee maximal performance.

Ideation success story

"From a stakeholder’s perspective, intranets can also provide the insight needed to make decisions that prove revolutionary."

Jaime Punishill - Chief Marketing Officer at Lionbridge

Jaime Punishill, Lionbridge’s Chief Marketing Officer, described the enterprise’s new intranet as “... a sea-change in attitude”. Instead of limiting ideation to the C-suite, now “you get the company driving the change”.

Digital workplaces drive knowledge sharing and provide data-based insights, serving as the impetus for innovation culture.

#6. Wellness

Eastern Kentucky University research estimates that employers lose $300b annually as a result of poor well-being.

Workplace stress is more than an inconvenience; it’s a threat to performance and productivity. A study by Willis Towers Watson revealed that three out of four employees rate stress as their primary workplace health concern.

Wellness programs have the potential to reduce workplace stress, but these initiatives are often an afterthought. Intranets can serve as the backbone for corporate wellness programs by centralizing resources, encouraging users to get involved, and serving as a hub for all things health.

Wellness success story

Trivallis and Unily, leaders in employee engagement


Trivallis and Unily take home employee engagement award

Trivallis and Unily are celebrating their triumph as leaders in employee engagement at this year’s EE Awards, as the Welsh housing association's digital workplace, Hive, is recognized as the Best Use of Technology in 2019.

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After launching a well-being initiative on their intranet, Trivallis experienced a 46% reduction in days lost due to stress-related absences, a 27% decrease in the average duration of long-term sickness, and an 11% reduction in staff turnover.

High workplace stress levels are a lose-lose for both staff members and employers. Digital workplaces can drive impactful health initiatives that keep engagement high and turnover low.

Intranet ROI: additional cost savings

In addition to changing the workplace for the better, intranets and employee experience platforms enable stakeholders to achieve additional cost savings. Below, we pinpoint key costs that can be avoided:

Retire obsolete software

If you think it’s cheaper to carry on with obsolete programs than it is to replace them, you’re mistaken. A 2017 survey found that US businesses lose up to $1.8b each year in wasted productivity due to outdated technology. Obsolete tech offerings can also drive away customers. Microsoft found that 90% of respondents would consider taking their business elsewhere when interacting with an organization that uses out-of-date digital processes.

Reduce overhead costs

As anyone who has ever managed a budget can tell you, the little things add up. From going paperless to consolidating office space by empowering remote work, turnkey intranets will help you lean out your overhead costs.

Cash-in on updates and support

According to IHS, IT downtime costs $700b annually. Out-of-the-box intranets boast built-in support at no additional cost, in turn nearly eliminating interruptions. Add in adherence to compliance regulations and ongoing upgrades and the dollar savings truly begin to speak for themselves.

Limit headcount

Instead of employing multiple developers at approximately $108,000 a piece, according to Indeed, enterprises gain access to the round-the-clock technical support included with their out-of-the-box intranet. Additionally, intranets reduce the need for administrative staff thanks to automated processes and built-in support.

Get new hires up to speed

Glassdoor found that better onboarding leads to an 82% retention boost and a 70% productivity gain. Given that Gallup prices voluntary resignations at $1t annually, improving learning and development works double duty to boost an organization’s bottom line. Intranets with FAQ pages, centralized resources, and video how-tos reinvigorate the process for new hires.

Consolidate platforms

Modern intranets bundle a host of features together, in turn reducing platform fees and staff training needs. Instead of paying separately for digital signage software, smart forms, event management platforms, emergency notification systems, and email newsletters, digital workplaces provide all of these capabilities together, in one place.

Prevent the unthinkable

According to IBM, the average cost of a security breach is $3.92m and rising. Intranet features like two-step authenticator apps and MDM protect your enterprise from hackers, even as digital threats continue to mount.

How can you improve return on experience?

ROX brings a host of new possibilities for improving customer and employee experiences. With the means to properly evaluate the value of experience, it’s much easier to identify areas to invest in and improve. In turn, this leads to an increase in the employee engagement ROI and ultimately, the organization’s profitability.

Intranets and employee experience platforms can pave the way for sustained growth by optimizing productivity, driving innovation, and inspiring employees to reach their full potential. The business will see immediate cost savings, improved employee loyalty, and a better sense of belonging. Employees that have a workspace specific to them, where they can communicate effectively with colleagues and express ideas and concerns to management, are more likely to feel valued within an organization.

Discover how a next-generation employee experience platform can improve the bottom line and increase the ROI of employee engagement. Speak with an expert today:

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