Employee engagement is a term that has a different meaning depending on who you ask. Enthusiastic employees, happy, satisfied, highly productive—all relevant definitions, but more in line with aspects of engagement rather than a definition.
More generally, employee engagement describes people who are committed to their work and the goals and values of their company. Engaged employees are present and involved, not just because of the paycheck but because they feel an emotional connection to the company and their work.
Organizations with a strong focus on employee engagement will excel. But that’s not the only reason to encourage it. Here are eight more equally vital arguments supporting the value of employee engagement.
Eight reasons why employee engagement is important
The importance of employee engagement can’t be summarized in a single statement. It’s a many-layered topic aligned with critical aspects of a company’s success and growth. Here are just a few.
1. Engaged employees are aligned with company values
Employees who feel their company’s values align with theirs are more connected and enthusiastic about their work. They’ll also be more likely to recommend their employer to other job seekers as a great place to work, driving recruitment and innovation success. Highly engaged employees improve work relationships, strengthen internal culture, and encourage others to engage similarly.
2. Boosts productivity
Engaged employees tend to dig into their work. They love what they do, believe in their company, and are confident that their managers and employers value their input. When people find their work satisfying, they’ll be invested and highly motivated to do their best. According to a recent Gallup survey, productivity improves by 18% or more, and profitability increases by 23% when workers are engaged and connected to their work. The other side is slightly darker, as employee disengagement is linked to $355 million in lost revenue annually per company (based on a mid-size S&P 500).
3. Higher quality of work
Engaged employees take pride in their work and always have great ideas about improving it. They are enthusiastic, collaborative, and feel valued, knowing their efforts contribute to their team’s and the company’s success. Of course, maintaining that level of enthusiasm is critical. Overwork and stress can negatively impact work quality and may cause employees to disengage. Engaged employees are fully present and care about their work; therefore, they are less likely to make mistakes or gloss over critical processes. Once again, we’ll refer to the Gallup data as it quantifies this idea, finding that engaged teams produced 41% higher quality work.
4. Improves retention
Companies with highly engaged employees report 81% less absenteeism and 43% less turnover than those with a disengaged workforce. Keep in mind these results don’t happen in a vacuum. Some of the attributes shared by organizations with high engagement stats include transparency, great communication, and employee recognition, to name a few. When employees feel valued, they are more likely to be satisfied and stay in their jobs as they know their work has value beyond a paycheck.
5. Reduces burnout
Engaged employees work harder but are less liable to burnout than their disengaged counterparts. Employees with low engagement are more likely to experience stress and overwhelm, leading to workplace burnout. When productivity and engagement start to slip, companies must take action and correct the situation. Fewer burnout moments keep staff healthy and happy, and efforts to mitigate their stress won’t go unnoticed.
6. Easier recruitment
Engaged employees are enthusiastic advocates for the company and will not hesitate to recommend their employer to other job seekers. They know it’s a great workplace, are highly satisfied with their jobs, trust the company’s leadership, and are proud to be part of a winning team. Gallup reports that companies with highly engaged workforces experience almost 60% less turnover—and that’s significant. With the cost of a bad hire anywhere from half to several times the worker’s yearly salary, companies can’t afford to miss the boat on this one. A workplace culture built on engagement is solid from the inside out and companies won’t have to work nearly as hard to compete for top talent.
7. Increases customer satisfaction
Companies with an engaged workforce exude happiness and confidence, which resonates with the public and any person or entity connected to the company. We’ve all had experiences with companies that are a joy to deal with—and plenty of the opposite. Engaged associates want to help and will go the extra mile to ensure customers are happy with the outcome of their requests. It’s this level of care that sets some companies apart from others. Looking at it through an engagement lens makes it easy to see the correlation. These days, more than half of customers won’t hesitate to switch to a competitor brand after a single bad experience.
8. Grows revenue
Companies with a highly engaged workforce are 23% more profitable than those with low engagement stats. This data can be directly attributed to lower turnover, greater employee satisfaction, higher productivity, and a strong company commitment to employee success. When employees have access to the content and tools they need to do their jobs, feedback, recognition, opportunities to help them improve, develop, and excel, and a collaborative culture to work within, bottom-line value follows.
How to improve employee engagement
No championships are ever won without a game plan. But before you strategize, you’ll need to know where the issues lie. Understanding employee sentiment is a critical first step. Surveys are an excellent way to gauge sentiment and get a broad picture of engagement across the workforce.
Soliciting feedback from your employees brings many benefits. It provides you with data and shows your employees that you care about what they think. Anonymous surveys may encourage more people to speak up, especially if there are issues.
For a comprehensive guide to creating effective employee surveys, check out our article Employee Engagement Surveys: Best Practices for Maximum Impact.
Creating an engagement plan
With survey data in hand, it’s time to create your action plan. Each organization will have its own unique focus, but in best practice, you’ll want to incorporate the following elements:
- Articulate clear objectives. Knowing what you want to achieve will help you gauge success.
- Develop initiatives that directly address the issues you want to address.
- Assign responsibility to individuals or teams for implementation and to monitor progress.
- Establish a timeline for the overall campaign with milestones along the way.
- Allocate the resources necessary to accomplish your goals, including budget, technology, and staff.
- Communicate the plan to all stakeholders so everyone understands the plan.
- Measure constantly to evaluate progress and collect feedback as you go.
- Implement a reward program to recognize outstanding achievement.
- Review and adjust when needed to ensure continued progress.
Learn more about the action plan process with our Easy Tips for Creating an Employee Engagement Action Plan.
Final Thoughts
Employee engagement is an ongoing concern. Companies experience change, industry trends shift, and sometimes, these adjustments impact how employees view their company and work. Solicit feedback regularly, act on the data you receive, and stay alert to any significant drops in productivity, retention, or profitability, as these could indicate an engagement disconnect that is within your power to fix.
