Employee engagement is one of the core principles of organizational success. It cultivates happier staff, increases motivation and productivity, and eventually boosts profitability. Without it, a company can find itself stuck in a rut with disengaged, unmotivated and unhappy staff.
Managers are increasingly understanding the importance of encouraging employee engagement and how it goes hand in hand with company growth and success. According to Gallup, 34% of US employees were engaged in the workplace, which is the highest level in Gallup’s history.
So, if you want to know more about the importance of employee engagement and why it is essential for transforming the workplace, read on!
What is employee engagement?
An engaged employee is present, focused and motivated in the workplace. They go above and beyond their job role, feel that they have a purpose, and are committed to the goals and values of their company.
Employee engagement describes those who have more reason to go to work beyond a paycheck. They’re invested, absorbed and devoted to bettering the company’s operations, reputation and interests.
Why is employee engagement important?
As mentioned, employee engagement is important in driving your company’s success — here’s how:
1. It improves productivity
Gallup found that disengaged employees cost the US between $450 billion and $550 billion each year in lost productivity. Another Gallup research study, conducted in 2012, also found that businesses with a high level of engagement had 21% higher productivity rates. The key takeaway, then, is that employees tend to be more productive when they are satisfied with their jobs.
Job satisfaction gives employees the motivation and energy to go the extra mile with their tasks and job performance. Increased efficiency then leads to a better quality of work, and eventually benefits business results.
Employees should be enthusiastic about their work, motivated to offer ideas, and always strive to do more. With high engagement levels, your workforce can benefit in these ways tremendously.
2. It encourages collaboration and communication
When employees find their work meaningful and feel valued as members of staff, internal communication and collaboration are improved. They’re more open to developing plans and facing challenges together, and it has a positive effect on meetings and cross-departmental communication. These factors increase productiveness and eventually amplify business results and even employee success.
Communication from management is also vital, as it clarifies the company’s goals and provides a shared understanding of the organization’s performance and direction. Without this, there is a higher chance of misunderstandings arising in the workplace.
Building engagement through communication and collaboration tactics is, therefore, essential in pushing a business forward. Examples of this include having an open-plan office or creating a communication toolkit that provides vital company information.
3. It builds trust and relationships
Open communication, honesty and camaraderie from management builds trust among employees. Staff members don’t want to feel like another “number” in the organization, nor do they want to feel like they work in a factory.
Employee engagement enables a company to feel more like a community, where management is open, honest and truthful with staff. By giving your employees a voice, recognizing their contributions and showing compassion, you can create better trust between management and staff.
Methods like engagement activities, open-door policies, and get-togethers can also augment a relationship between seniors and their staff. Monitoring and measuring employee morale and offering support and open feedback are additional engagement initiatives that build trust in the workplace.
4. It improves employee wellbeing
Another positive consequence of engagement in the workplace is employee wellbeing. When staff are happy and engaged at work, their overall mental and physical health is positively affected. And conversely, when staff are in good health, they perform better.
Gallup found that 62% of engaged employees feel their work positively affects their physical health, while 78% of engaged workers feel their work lives benefit them psychologically.
5. It creates job fulfilment
An impressive paycheck, an office pool table or an Ugly Sweater Day aren’t the only ways to retain happy and committed employees. They want a job that develops their skills, offers a positive experience and enhances their careers. Employees want job fulfilment.
Employee engagement establishes job satisfaction. Some employees aren’t going to stay in a job just because it is financially secure; they want to feel engaged with their role. According to the 2018 statistics by Access Perks, nearly 60% of Americans would take a job they love over a job they hate, even if the preferred position paid half the salary they would earn at the job they dislike.
Whether it’s through training, a positive environment or communication, several engagement methods can instill job fulfilment in your employees.
6. It cultivates company culture
When staff feel valued and appreciated, it contributes to a positive company culture. Employees want empowering and fulfilling work experiences.
They strive to work in a pleasant environment where communication is open, there’s no conflict, missions and values are clear, and success is rewarded. This is all achieved when management puts focus on employee engagement permanently, and not just as a passing trend.
Engagement strategies can strengthen company culture, which can then lessen staff turnover. Low office morale and job dissatisfaction can spread among your workforce, which can be costly to the business. It’s critical, then, that HR managers find ways to enforce engagement and make employees feel enthusiastic about coming to work.
7. It reduces employee turnover
A happy employee is a loyal employee. Engaging staff members is crucial for sustaining top talents in your workplace. It reduces staff turnover, and thus decreases burdensome hiring costs.
When employees feel satisfied with their working culture and values, they’re more likely to remain in that position and stay committed to their employer. According to a study by Josh Bersin, companies with highly engaged staff lowered employee turnover by 31%.
A disengaged employee will show up, do the bare minimum, and possibly quit their job for a better offer elsewhere. This then results in a vicious cycle, whereby fellow employees notice others leaving, and end up doing the same.
A lack of employee engagement is usually a result of:
- Feeling undervalued by management
- Low pay and lack of rewards
- Poor company communication
- Mismatch with values, goals and company mission
- Lack of collaboration
8. It improves talent acquisition
Companies that have low employee turnover rates and great business results are more likely to attract top talent.
Jobhunters take notice of firms that focus on employee happiness and satisfaction. They’re looking for organizations that offer a positive and thriving culture. These elements are usually affirmed through a company’s social media accounts, website, and overall brand reputation.
Companies that are therefore developing employee engagement can stand out in the competitive job landscape and attract talented, in-demand staff.
9. It attracts and retains customers
Employee engagement not only retains skilled staff — but customers too. Satisfaction has a domino effect: when your employees are happy with their experience, your clients will feel the same. Why? Because high morale and positivity are contagious.
When the sales force is happy, your customers will take notice. They’ll be on the receiving end of a positive customer service, which will, in turn, attract and retain clients at a higher rate.
10. It builds success
An engaged workforce fuels better business results. Simply put: it can increase profits and company success. The 2012 Gallup study reported that companies with high levels of engagement were related to positive business outcomes. More specifically, they were 22% more profitable than those with low levels of engagement.
As mentioned earlier, a positive sales force helps retain and attract customers, which ultimately drives more revenue and profit. Happier staff are also more likely to recommend their organization’s services or products to others.
Employee engagement statistics
We scoured the web and found some interesting stats that you should know:
$450–$550 billion
is lost by US companies each year due to disengaged employees
Source: The Conference Board
60%
of Americans would take a job they love with half the salary over a job they hated with double their current salary
Source: Lexington Law
39%
of workers will work harder and increase their productivity at work if they’re happy in their current job or company
Source: One4all Rewards
51%
of US workers would quit a job that didn’t provide the necessary training
Source: Udemy Business
How to improve employee engagement
So, now that you know why employee engagement is important to your company’s success and longevity, it’s time to make it happen. Here’s how.
1. Offer regular performance feedback
Implement a system for frequent, constructive feedback — not just annual reviews. Continuous performance discussions help employees feel valued and aligned with company goals, encouraging ongoing growth and engagement.
2. Encourage transparent communication
Create open communication channels where leadership shares company updates and goals. Transparency fosters trust and makes employees feel connected to the bigger picture, enhancing their commitment.
3. Foster inclusive decision-making
Involve employees in decision-making processes through surveys, town hall meetings or suggestion systems. Empowering them to contribute fosters ownership and engagement in the company’s success.
4. Launch employee development plans
Create personalized development plans during performance reviews. Tailoring growth opportunities based on each employee’s strengths and goals shows commitment to their future, boosting engagement and retention.
5. Implement work–life balance policies
Introduce flexible work arrangements, like remote work or flexible hours, to support work–life balance. When employees feel that their personal needs are valued, their overall satisfaction and engagement improve.
6. Introduce career development programs
Develop structured career growth pathways and mentorship opportunities. When employees see clear progression, they’re more likely to invest themselves in their roles and the company.
7. Create a structured onboarding process
Develop a comprehensive onboarding program that clearly outlines job expectations, company culture and growth opportunities. A well-structured onboarding process ensures new hires feel welcomed and confident, increasing long-term engagement.
8. Train leaders
Offering leadership training for managers ensures they foster supportive and motivating work environments. Strong leadership directly impacts employee satisfaction and engagement, leading to higher performance and employee retention.
9. Celebrate success
Establish a formal recognition program to consistently celebrate achievements and contributions. Acknowledging hard work, whether publicly or privately, helps motivate and engage employees, reinforcing their value to the organization.
10. Create employee feedback loops
Implement regular surveys or feedback systems where employees can voice concerns or ideas. Respond to the feedback with actions, demonstrating that their input is valued and contributes to company improvements.
FAQs about employee engagement
Still got questions about employee engagement? Perhaps you’ll find an answer below:
Q: How can I measure employee engagement effectively?
There are several methods you can implement to measure engagement. Tools like employee surveys, performance reviews and one-on-one check-ins, for example, can all provide insight into satisfaction, motivation and commitment levels.
Q: What are the key drivers of employee engagement?
Key drivers include effective communication, career development opportunities, recognition, work–life balance, and strong leadership.
Q: How can I improve engagement with a remote team?
As remote work grows, so does the need to keep remote employees engaged. Virtual check-ins, clear communication channels, team collaboration tools and flexible working policies are crucial to maintaining high engagement remotely.
Final thoughts
One of the most valuable assets a business can have is its people. That’s why employee engagement matters so much. Keep them content and improve their satisfaction on an ongoing basis, and you’re guaranteed a happier workforce and successful business in the long run.
How do you achieve employee engagement in the workplace? Let us know in the comments section below!
This article is a partial update of an earlier version originally published on April 1, 2020.