ROE: Return On Engagement

Some leaders are afraid of what happens if they invest in their people and those people leave.

You should be more concerned if you don't invest in your people and they decide to stay.

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Costs associated with lack of engagement are a 'slow bleed'. Every day you fail to address it, you place profits, people and productivity at risk of leaving.

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We know we live in the discretionary portion of our clients' budgets. We are not payroll. We are not rent. Our clients have found however, that we are just as essential.


That's because what we unlock is also discretionary...their people's full effort. 


We understand the value proposition when it comes to investing in teams can be murky. That's why we've put together this example of an average CultureSmith client in an effort to add some clarity in respect to ROI.


We are on a mission to scale empathy in every workplace that exists in the markets we serve, and the last thing we want is confusion around money to stand in the way of delivering on that mission.


ROI Factors

Calculating exact ROI can be as much art as science given that the costs of disengagement don't tend to show up line items on financial statements with the disengaged employee's name next to them. That said, there are three areas routinely measured that give a solid measure of the potential ROI that comes with investing in your people.

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Productivity (Learn More)

  • A Moderately Engaged culture experiences a 17% increase in Productivity vs a Moderately Disengaged one.*

  • For every 5% increase in Productivity an organization can expect to see a 3% increase in Revenue the subsequent year.**

*Source: State of The Global Workplace, Gallup, 2018

**Source: Trends in Global Employee Engagement, Aon Hewitt, 2017


Toxicity / Absenteeism (Learn More)

  • 63% of employees report lost time each year avoiding toxic coworker.*

  • The average number of days lost per worker per year currently sits at 11.6 days **

  • The move from a Moderately Disengaged Employee Base to a Moderately Engaged one results in a 41% decrease in absenteeism.***

*Source: Toxic Workers, HBR

**Source: Statistics Canada

***Source: State of The Global Workplace, Gallup, 2018

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Turnover (Learn More)

  • The replacement cost of an employee is between 6-9 months of that individual’s salary.*

  • The avg. turnover rate in Canada is 16%, the 4th highest globally.**

  • The move from a Moderately Disengaged Employee Base to a Moderately Engaged one results in a 59% decrease in Turnover .***

*Source: Society of Human Resource Management (SHRM), 2018

**Source: Canadian HR Reporter, 2018

***Source: State of The Global Workplace, Gallup, 2018

Fun With Math

Using these statistics a predictive model can be built to forecast the hard impact of soft costs.


Let's apply the above statistics to a company with the following characteristics:


25 Employees.


Average Salary of $70k Annually.


Annual Revenue of $5mil.

Turnover Costs

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- 16% Turnover Rate x 25 Employees = 4 lost employees per year.

- Turnover cost of 50% of Salary x $70,000 Salary = $35,000 lost per employee.

- 4 Employees x $35,000 = $140,000


- 40% Reduction in Turnover x $140,000 = $56,000 in Savings.

Toxicity - Absenteeism




- 11.6 lost work days per year = 4.44% lost time.

- Lost Revenue = 4.44% x $5,000,000 = $220,000

- Lost Salary = 4.44% x $70,000 x 25 Employees = $77,700.

- Total Losses = $297,700


- 37% Drop In Absenteeism x $297,700 = $110,149 in Savings.

Impact of Productivity on Revenue

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- $5,000,000 in Revenue


- 21% Revenue Lift = $1,050,000 in Added Revenue.


This creates a max potential ROI of $1,216,149.


However the we routinely deliver situational ROI that even further justifies the investment.

  • We have helped leaders prevent poor communication from killing multi-million dollar transactions.
  • We have helped teams embrace conflict that has made their products and services more viable, adding new streams of revenue. 
  • We also rountely enabled the leaders and employees we work with to have better interactions with their families  at the end of a tough day, avoiding costs that are quite literally incalculable.


The Greatest ROI we offer is peace of mind

There is nothing quite like the confidence of knowing that your people are equipped to deal with any situation.

Book a Free Exploration Call and we will help tailor a plan that fits your budget and your needs.