Regular readers of this blog surely know that employee engagement is like many things in life: you get out of it what you put in.

However, too many leaders of small and midsize organizations do the bare minimum when it comes to employee engagement activities.  They might remind their workforces about their open door policy a couple times a year – which may not exist in reality.  Or they might bring everyone together for a holiday party – only to watch as people self-segregate themselves by job function or department, the result of too few team building and morale-boosting initiatives throughout the year.

It's certainly understandable that the leadership of such firms might shy away from taking a bold, long-term position on employee engagement.  It is really, really tough to continually stay abreast of what your employees are thinking about each other and your business.  And, as mentioned, it takes long-term commitment and even the understanding that there will be some mistakes along the way.

Yet, as a recent Hewitt Associates survey of the 2008 "best" employers in Australia and New Zealand shows, the missed opportunity costs of doing nothing, or even too little, are huge.  According to The Age website, their study of almost 200 organizations composed of over 40,000 employees 

shows a clear link between levels of employee engagement and virtually every measure of company performance. The best employers generate an average of 1½ times more revenue and 2½ times more profit per employee than the lower-ranked organisations.

As may be expected, these "lower-ranked" firms deal with more incidences, on average, that generate unexpected costs – things like manager-prompted turnover and discrimination suits.  But, as The Age article also outlines, there are many more "hidden" costs that leaders and HR managers must consider as a result of poor employee engagement best practices.  These include:

• unplanned absenteeism
• reduction in work team cohesion and productivity
• reduction in staff morale
• lost management/employee time (investigations, hearings, etc.)
• workplace accidents
• stress and illness claims
• damage to the company's reputation
• political and industrial relations impacts

So how do smart firms avoid most or all of these known and lesser-known costs?  For one thing, leaders can get past the myth that the best solutions are expensive (certainly very good news in these tough times).  The Society for Human Resource Management just wrote an article on how to boost employee engagement during uncertain economic conditions.  Their list makes for a great starting place:

• Implement telecommuting
• Review goals and objectives with employees
• Get the basics of team building – meet with people and follow up with them on what they say they need – down pat
• Promote employee assistance plans (EAPs)
• Get involved in public transportation

You can even improve your employee engagement through learning and development initiatives, all while keeping costs down.  We wrote an Ask An Expert column on this a while back.  Check it out.

What solutions would you add?  How have they helped your bottom line and/or reduced some of the hidden business costs mentioned above?