By Peter DiMario and Phyllis Mikolaitis
Every CEO knows that Human Capital is no longer just a line item—it’s the driver of sustained business growth, agility, and profit. But here’s the hard truth: most companies are falling short in unlocking the true power of their people.
According to Gallup’s 2023 Global Workplace Report, only 23% of employees are actively engaged. That translates to $8.8 trillion in lost productivity worldwide—a staggering number that no executive can afford to ignore.
However, this gap in engagement is not all doom and gloom. In fact, it represents one of the greatest untapped opportunities for return on investment.
Why Engagement Is the Game-Changer
Companies with highly engaged teams consistently outperform their competitors. Multiple studies—including research by Gallup and McKinsey—reveal that engaged employees deliver:
- 18% higher productivity
- 23% higher profitability
- 18% increase in sales
- 10% boost in customer satisfaction
- Lower turnover and absenteeism
What are the attributes of an engaged environment? Innovation, connection, enthusiasm, well-being, job mastery, and achievement. Engaged employees bring energy, creativity, and a focused approach to their work. They are aligned with company goals, emotionally invested in outcomes, and committed to excellence. They don’t just show up – they grow and thrive.
The Leadership and Engagement Connection
So, where does engagement begin? It starts with leadership.
Transformational leaders don’t just make decisions; they develop and shape the organization’s culture and build team connections. Their words and actions influence team member engagement. When leaders communicate clearly, recognize contributions, and connect team members’ work to the organization’s vision and goals, team members become more engaged. It is the responsibility of leadership to develop and promote team member engagement.
At Pinnacle Solutions, we work with executives and leadership teams to build these exact capabilities—ensuring that managers evolve into transformational leaders who inspire, align, and activate their teams.
The Formula for Engagement-Driven ROI
Maintaining team member engagement requires more than just providing recreational activities and free coffee. It’s about building a culture of respect, purpose, and shared accountability. Here are the proven levers we help organizations implement:
- Strategic Leadership Development
Train managers to lead with empathy, vision, and behavioral clarity—transforming them into “leadership lightning rods” who elevate team performance. - Clear Role Alignment
Employees must see how their work directly contributes to company goals. Purpose drives performance. - Skills & Capability Growth
Encourage cross-functional collaboration, professional learning, and coaching to boost confidence, competence, and connection. - Envisioning Outcomes & Inspiring Overachievement
Help leaders generate fresh insights, challenge assumptions, and capitalize on emerging trends—creating teams that reach new levels of innovation and execution. - Building Trust & Cultivating Responsible Freedom
Develop a culture where employees are empowered to grow, trusted to act, and accountable for results. - Work-Life Integration
Support balanced workloads and flexible policies that reduce burnout and enhance focus, well-being, and employee retention. - Recognition & Reward Systems
Implement authentic, meaningful, and personalized recognition that motivates, inspires, and reinforces peak performance. This makes employees feel appreciated and valued, which in turn boosts engagement and performance. - Creating a Culture of Overachievement
Build an environment where healthy communication, strong compensation, purposeful work, and strategic direction allow ordinary people to deliver extraordinary results.
Final Thought
Human Capital Engagement is a strategic asset and essential to the organization’s overall achievement of performance, productivity, and profits.
Organizations that engage their human capital—by developing emotionally connected, high-performing leaders—will thrive in any market. Those who don’t will continue leaking profit, performance, and potential.