As a consumer, it’s easy to tell an engaged employee from one who couldn’t care less. Engaged employees go the extra mile to help and provide value. Engaged employees genuinely care – not just about their jobs, but about customers as human beings. Engaged employees understand how their daily actions have a greater impact, and act accordingly.

Sadly for consumers, engaged employees are all too rare. Some estimates show that more than 20 percent of employees are actively “disengaged,” and far more – 40 to 70 percent – are “neutral.”

But for business owners looking to gain a differentiating edge against their competition, these numbers reveal an opportunity.

Engagement is a powerful differentiator.

If you’re in a customer-facing industry, that difference will be felt in how customers are treated.

  • 62 percent of companies view customer experience as a competitive differentiator
  • Gartner predicts that by 2018, more than 50 percent of organizations will redirect their investments to customer experience innovations
  • A 2016 Inc. article by Bill Carmody states “the only point of differentiation left today is the customer experience itself.”

In non-customer-facing industries, the difference will be felt in higher levels of innovation.

  • “Gallup research has shown that engaged employees are more productive, profitable, safer, create stronger customer relationships, and stay longer with their company than less engaged employees. This latest research indicates that workplace engagement is also a powerful factor in catalyzing ‘outside-the-box’ thinking to improve management and business processes as well as customer service.”

Whatever type of business you have, it’s highly likely that people are perfectly poised to be your primary source of competitive advantage.

The Brookings Institute examined how market value is determined in today’s organizations, compared back to how value was determined in 1982. Thirty-five years ago, 62 percent of an organization’s market value came from tangible assets (machinery, products, facilities), 38 percent from intangible assets (brand, intellectual property, quality of the workforce).

By 2002, those numbers had flipped. Nearly 80 percent of market value came from the intangible, and just 20 percent came from tangible assets. That trend has only grown over the last 15 years.

Businesses today are, quite literally, only as good as their people.

Therefore, people are the means by which businesses can gain that competitive edge, even as competition grows and markets saturate.

Studies support the idea that the more engaged a workforce is, the better they do in regards to their competition.

Towers Perrin looked at more than 35,000 employees across dozens of companies and found a positive relationship between employee engagement and:

  • Sales growth
  • Lower cost of goods sold
  • Customer focus
  • Reduced turnover

Interestingly, the highly engaged employees surveyed were almost three times more likely to feel that their companies really cared about their customers, and believed that their companies served customers better than competitors. In fact, these companies beat average revenue growth in their sector by 1 percent (their competitors who scored low engagement were behind by 2 percent). (“Understanding what drives employee engagement,” The 2003 Towers Perrin Talent Report).

Employee engagement may be thought of as a “nice to have,” rather than a “must-have.” But differentiation and competitive edge have never been “nice to haves.” They’re imperatives. When more employers make the connection between engagement and rising above the competition, that “nice to have” will quickly transform into a “can’t do without.”

Engagement is that impactful.

Transferable Insight: An engaging work environment gives employees the support, encouragement, and respect they need to feel motivated to try harder and make extra efforts that differentiate organizations from their competitors. Every type of industry can benefit from engagement – for more information on how engagement can benefit your business, contact us or try it out for FREE!