Where Is Your Money Going?
Who’s ready to talk numbers? Wait - don’t click away! I promise this won’t feel like a spreadsheet. Whether you geek out on ROI or would rather poke your eyes out than open Excel, stay with me. Understanding the financial impact of your people strategy could be the most important move you make this year.
In a world where employee disengagement costs organizations billions each year, investing in strengths development and engagement efforts isn't just "nice to have". It's a strategic move with measurable returns. Leaders who lean into their innate talents and help their teams do the same are not only more effective, but they also build organizations that thrive.
The Business Case for Strengths and Engagement
Research consistently shows that focusing on strengths and engagement leads to higher performance, better wellbeing, and lower turnover. Gallup reports that employees who use their strengths every day are 6x more likely to be engaged and 3x more likely to report excellent quality of life (Gallup, 2023). Meanwhile, employees who are engaged - those who feel connected to their work and valued by their organization - are more productive, more loyal, and more likely to go above and beyond.
While Gallup has long highlighted these impacts, other research supports the case:
- McKinsey & Company found that self-aware leaders are more likely to lead financially high-performing teams (McKinsey, 2020).
- Zenger Folkman’s 2023 report emphasizes that leaders who build on their strengths are significantly more effective, particularly in areas like trust-building, adaptability, and coaching.
- ADP Research Institute's 2023 Global Workforce View found that employees who feel supported by their managers and colleagues report lower stress levels and higher engagement.
Organizations that invest in both strengths-based development and employee engagement initiatives, like Gallup’s Q12 framework, can compound the benefits. When employees feel seen for their strengths and supported through engagement best practices, the cultural and financial returns are exponential.
ROI in Real Terms
In today’s workplace, we’re also seeing what Gallup has coined "The Great Detachment" - a growing number of employees who remain in their roles but have mentally checked out. They may not be job-hopping, but without meaningful engagement, their performance, productivity, and customer service inevitably suffer. It’s a silent drag on your business, and one that’s easy to overlook until the impact becomes painfully clear.
I know that investment decisions are often driven by cost, but it's just as important to ask: what is the cost of not investing in strengths and engagement? The cost of disengagement, turnover, and lost productivity can far outweigh the price of building a strengths-based and engaged culture.
Here’s a simple way to start visualizing the savings:
Turnover Savings Calculation
Estimated Annual Turnover Cost = (Number of Employees) × (Turnover Rate) × (Average Salary) × (Replacement Cost Factor)
The replacement cost factor typically ranges from 0.5 to 2.0. A midrange benchmark is 1.5.
Example:
Industry data suggests 20% is a common benchmark for annual turnover, but to be conservative, let’s use 18%:
100 employees × 18% turnover × $75,000 salary × 1.5 = $2.025 million annual turnover cost
Now, assume either strengths-based development or engagement strategies reduce turnover by just 30%:
$2.025 million × 30% = $607,500 saved annually
Combine both strategies and assume a 50% reduction:
$2.025 million × 50% = $1.0125 million saved annually
Productivity Gain Estimate
Highly engaged teams are 18% more productive (Gallup, 2023). To estimate the gain:
Productivity Gain = (Total Payroll) × 18%
If payroll is $7.5 million:
$7.5 million × 18% = $1.35 million in productivity gains
To put that into perspective:
If a full-time employee works 40 hours a week, an 18% productivity increase is the equivalent of gaining over 7 extra hours of effective work per employee each week.
That’s nearly a full additional workday - without anyone staying late or adding hours.
When engagement efforts are paired with strengths development, productivity can be even higher due to greater clarity, collaboration, and alignment.
This Isn't Just About Morale
It’s easy to assume that strengths and engagement work is about boosting morale or making people feel appreciated. But the real power lies in building business outcomes through:
- Smarter talent deployment
- Increased innovation (people working within their zones of genius are more creative)
- Higher resilience and adaptability during change
And while this post highlights a more analytical approach to employee engagement, the intangible benefits are far-reaching: improved team trust, better communication, increased psychological safety, and a sense of belonging that fuels retention and wellbeing. The ripple effect of this work extends beyond the workplace - positively influencing employees' personal lives, strengthening families, and enriching communities. Those are stories for another day, but no less critical.
Start with Leadership, Scale with Intention
- Start with leadership: Self-aware leaders create self-aware organizations. Strengths assessments and coaching for executives and managers are critical first steps.
- Scale it across teams: Embed strengths-based conversations and engagement principles into team meetings, performance reviews, and goal setting.
- Measure what matters: Track not just engagement scores, but also retention, promotion rates, and business performance indicators.
Final Thought
Strengths-based development and employee engagement aren't "soft" investments. They're strategic business imperatives that drive measurable ROI. In a time where organizations need agility, innovation, and retention more than ever, the cost of not doing this work is simply too high.
Want to estimate what this could look like for your organization? Let’s run the numbers together.
