Article

November 6, 2024

Why is Employee Engagement so Important? TOP 20 Benefits

Blair Williamson

13 minute read

What is Employee Engagement?

Employee engagement is a measurement of the level of loyalty and commitment an employee has to their work and their company. Employee engagement is not static, and will definitely change over time throughout an employee’s journey with the company.

Engagement levels are high in an organization when people are pleased to come to work in the morning and feel confident in the importance and contribution of their role to the company. When employees have a clear vision of their tasks and find meaning in their jobs, they are more efficient and are hungry to learn more. They know where they fit in the company, how their role contributes to overall success, and feel their input is valuable. If they have a problem they know their employer will listen.

→ Employee Engagement: What is it? How to improve it?

TOP 20 Employee Engagement Benefits

According to Gallup, simply measuring satisfaction is not enough. Approaching employee engagement as a business strategy yields more organic results. Highly engaged organizations share common practices and experience the following benefits:

Employee Engagement

Time to start or overhaul an engagement strategy? Capitalize on Employee Engagement Opportunities.

1. Reduction in Absenteeism

Every organization is different, but absenteeism in the workplace is a common problem because it not only affects individuals, but it’s also seen as a management problem. Absenteeism is costly for a company and can spiral out of control if not addressed.

If you love what you do and where you do it, you probably won’t take days off for no reason or without consulting your manager first. You should trust your employer will give you time off when you need it. Absenteeism appears when employees are not satisfied or indifferent to their work and team, so they may take advantage of certain situations and leave work without much consideration.

To fight absenteeism you should look at the satisfaction, motivation and engagement of your staff. Improving employee engagement alone can bring up to 41% reduction in absenteeism; imagine the results you can achieve if you improve the overall employee experience in your organization.

2. Increase Productivity

One of the main characteristics of the engaged employee is their positive behavior towards the organization, as they are often the ones who believe strongly in the company’s mission and vision. This attitude makes people work harder and proactively to reach their goals, which leads to a 17% increase in productivity.

Engaged employees know that their work is appreciated and valued. They will spend less time chatting with colleagues or taking longer breaks and more time working. Higher productivity and efficiency are key benefits of employee engagement that directly impact employee performance, and can influence overall company performance.

3. Better Employee Safety

Employees who are willing to show up and are consistently engaged in the work environment have a greater commitment to quality and safety at work. When employees have the right mind set and are not distracted or stressed they can focus better, meaning they are less likely to make mistakes that can lead to work accidents.

Working in a stable and dependable workplace, engaged employees are proven to be more proactive, which results in 70% fewer safety incidents. So employers should ensure health and safety regulations are followed and up-to-date. This is just as important for factory workers as for office workers.

For example, environmental and energy service company Idex experienced a 23% decrease in the number of incidents after implementing an intranet that helped to streamline information shared during onboarding.

4. Healthier Employees

Many companies believe that a high-stress environment is the best way to motivate employees to perform at their best. They think of co-workers as competition rather than colleagues, believing this approach keeps employees productive and focused. However, research published in the Harvard Business Review points to a “large and growing body of research” demonstrating that this type of workplace environment actually reduces employee productivity over time. Studies also highlight the role of team employee engagement in lowering healthcare costs for employers.

Companies with high stress levels report spending nearly 50% more on employee health care compared to their more relaxed counterparts. Work stress costs the U.S. economy over $550 million, according to the American Psychological Association. It is also linked to the majority of workplace accidents (60-80%) and accounts for more than 80% of doctor visits. Team employee engagement can help address these issues, as workplace stress is connected to serious health conditions such as metabolic syndrome and cardiovascular disease.

5. Lower Employee Turnover

Just like a chain reaction, less absenteeism and higher productivity lead to motivated employees who are likely to stay in the organization longer. Engaged employees don’t look for new jobs – their positive experience in the organization leads to high satisfaction rates. . On the contrary, non-engaged or disengaged employees are constantly looking for new opportunities as their bond with the organization is not strong enough.

Depending on the overall turnover rate of an organization, business units with high employee engagement can achieve up to 59% lower turnover. This proves the importance of improving employee engagement and why it should be one of the main priorities for leaders and HR teams.

6. More Effective Leadership

Leaders who want to inspire their employees to do more must connect with them first. They need to make time for engaging with team members and getting to know employees. In return, the employees are more likely to listen to the company leaders since they understand the leaders care about what is important to them. Company morale increases, workers are excited about their jobs, and the level of employee engagement gets a boost.

With more effective leadership comes improved reputation for managers. Engaged employees are more likely to share honest feedback and, thus, have more effective working relationships with their managers. Of course direct managers will have the most impact on an employee’s view of the leadership team since the direct manager is often most involved in conveying upper leadership initiatives and also for helping their employees implement work-life balance.

7. Better Business Growth

Combining all the above, we can reach a tipping point that brings the organization closer to its customers. Increasing profitability isn’t just about selling more products. Engaged employees help organic growth by improving customer relationships, resulting in a 10% increase in customer ratings. This can allow the organization to observe a 20% increase in sales and a 21% increase in profitability.

This is a perfect example of one of the benefits of employee engagement for employers. Happy staff means happy customers. And happy customers are loyal and more likely to give positive reviews and recommendations, that in return can bring new customers.

→ Discover 22 Employee Engagement Ideas & Strategies for Companies

8. Better Customer Satisfaction

When employees are engaged this reflects in their attitude and how they deal with customers. Creating a positive customer experience, making the customer feel valued and a smile goes a long way in building a strong customer relationship. This equation also works between the company and its employees. Apply the same effort towards your employees to:

Increase employee loyalty
Strengthen their knowledge and expertise
Receive valuable employee input

Satisfied employees are likely to make more up-sales and cross-sales, driving even higher returns on customer success management. In return, highly satisfied customers are a great PR machine as they’ll talk about what a great experience they had.

Employee Engagement

Time to start or overhaul an engagement strategy? Capitalize on Employee Engagement Opportunities.

9. Better communication across teams

Engaged employees are not afraid to exchange feedback and collaborate with each other and managers to reach their goals. They know how to share information and work together as a team. When employees are invested in their work, they are more likely to practice open communication in the spirit of camaraderie and an interest in the wellbeing of the company.

Having strong communication across teams not only affects employees’ performance, but it creates a virtuous circle within the organization. When an employee has a bigger network of colleagues he is working with on a daily basis with communication flowing positively, usually his work gets more visibility and recognition. An engaged employee has the power to influence others by setting good examples and promoting open communication and dialogue to other colleagues.

An intranet platform like LumApps can help improve communication across teams with its social networking capabilities. For example, the ability to create community interest groups helped improve employee synergy at Just Eat Takeaway.com. The team at Just Eat Takeaway.com had this to say about improved communication across their company:

“The Kitchen has played a key part in allowing us to drive a clear and consistent message during a time of intense change (made especially difficult due to Coronavirus). It has quickly become part of the ‘everyday’ for JETers globally who increasingly visit for news, tools and fun, and who regularly use it to share their plans and successes with others across the world. - Mark Tittle, Head of Internal Communications at JET

10. Encouraging advocacy

“I love my job.” Isn’t this what every employer wants to hear? Employees often talk about their work outside of the office and unfortunately negative feedback or complaints are easier to share. Whether employees' words are positive or negative depends heavily on their experience in the organization. That’s why working on employee engagement is important if you want to encourage positive brand advocacy.

Employee advocacy is fantastic free publicity. It can lead to more loyal customers, quality applicants and ultimately higher revenues. It’s also one of the biggest benefits of employee engagement to employees themselves, since their advocacy can turn into referral bonuses if their network includes the right business audience. Incentivising advocates with work benefits and recognition is a great way to say thank you for spreading the word.

LumApps Employee Social Advocacy Solution Example

11. Boosts Employee Positivity

Positive work environment is very important for employee engagement. Learn how to nurture the positive vibes and you will see how contagious it can be throughout the organization. Positivity affects employees:

Attitude at work
Confidence in the company and its future
Job satisfaction
Business relations within and out of the organization

But how do you know if your employees are really happy? One way to find out is to conduct employee surveys in order to get more personal feedback. You can choose to conduct surveys in-person on an individual level or you can conduct employee engagement surveys via email. Typically, you may get the most honest answers to your engagement survey questions if employees can answer anonymously.

Another way to conduct surveys is to combine it with a short yes/no intranet survey to collect more quantitative data. The results will hopefully yield some results that will help you build stronger relationships with employees.

Why is the employee engagement survey important? Collecting regular employee engagement statistics is invaluable. One of the benefits of employee engagement statistics is that they help you understand what makes employees happy (or unhappy) and where the company can improve.

12. Stimulates Innovation and Creativity

Encouraging employees to be innovative and share their ideas is another way to build an engaged workforce. Leverage specialists’ expertise by bringing them together to work and interact on common projects. Investing time on innovation gives employees a sense of belonging and accomplishment, which in return drives a much higher added value for the business.

This can be a way to save time and resources too, as employees may come up with an idea that’s just as good without resorting to external sources. An effective way to encourage employees to submit ideas could be through a competition on the intranet, or offering employees the opportunity to join an internal R&D team. Show creativity when approaching your employees and they will respond with the same amount of enthusiasm and creativity to any task you give them.

13. Builds morale

High morale builds employee loyalty. It demonstrates that employees are focused on their job and share the vision of the company. Boosting morale is not rocket science, you can just follow some genuine steps:

Tell people when they do a good job
Offer rewards (not just financial)
Ask employees’ opinions and listen to their answers
Provide relevant information and feedback
Offer trainings to improve skills
Offer a structured career path

Building employee morale means being the employer that’s different. Find a way to be the employer everyone wants to work for.

14. Leads to Mutual Respect

Respect reflects trust and works both ways. If managers value their staff and allow them to do their job without micromanaging each step they will earn their respect. Yet the employee should know they can ask as many questions as they need to without feeling uncomfortable.

Likewise, respect is essential for employees who work far from their direct managers, such as remote workers and frontline workers. An employer should trust the employee to get the job done in the required number of hours, taking time off if they need it. If an employee feels they have the necessary flexibility to do their work, they will be committed and engaged.

Employee Engagement

Time to start or overhaul an engagement strategy? Capitalize on Employee Engagement Opportunities.

15. Encourages Employees to Take Personal Responsibility

Employees who are fully engaged have a completely different attitude when they go to work. They aren’t interested in seeing “how much they can get away with” at work. Instead, these employees see themselves as being part of the company’s success. They keep their heads up, looking for opportunities to help their coworkers to do well since they have a stake in the result of their professional efforts at the company.

16. Makes Employees Loyal

When you think about employee engagement activities benefits, loyalty may not immediately come to mind. Employee engagement and loyalty are closely related. When employees are engaged in their work, they are emotionally invested. This emotional bond naturally helps to foster loyalty on the employee’s part.

Employee engagement is only one piece of the loyalty puzzle, though. Other factors that play a role include making employees feel appreciated, resisting the urge to micromanage workers, and giving employees the authority to make (some) decisions independently.

17. Increased Retention Rates

Employees start a new job feeling excited about the new opportunity. They are looking forward to contributing to their employer’s success and advancing in their career. For too many workers, something changes after they start their relationship with an employer.

According to the What People Want Report prepared by Hays, a significant number of employees have an eye on the door. Some of the key findings of the report include the following:

81% of the 2,000 professionals surveyed were open considering other jobs
71% of those surveyed would accept less money to work in their ideal job
47% of people actively looking for another job said that company culture was the primary reason

A minority of respondents (12%) stated they were “very satisfied” in their current job Employees who are engaged in their work and feel as though their contribution is making a difference are less likely to be actively looking at opportunities elsewhere. Their attention is going to be focused on their current job and doing their best for their current employer.

Engaged employees are generally more positive, which creates a positive sense of company culture. Increased retention rate will also impact your company culture in the long term, since employees are staying longer and speaking positively about their experience working at the company.

18. Contributes to a Happier Home Life

Engaged employees are more satisfied with their home life, according to the results of a Kansas State study. Researchers looked at how positive experiences in the workplace extend into family life and smooth the way for positive family interactions. They found that employees who are engaged at work (which includes more dedication to their daily activities and having higher energy levels) also have better moods and report a more satisfying home life.

19. Improved Collaboration

Collaboration between team members is an important aspect of running a successful company. You may have some people on the payroll who feel they do their best work on their own; however, the best results are often obtained when employees work together. It can often be challenging to achieve a strong sense of collaboration when you have team members who don’t necessarily work in the same physical office (or even in the same time zone!).

A good way to improve employees’ collaboration skills is to encourage workers to become more engaged in their roles at work. An employee who is fully engaged at work is very familiar with the employer’s expectations of them. When two or more of these highly engaged employees start sharing their thoughts with each other, they have the potential to come up with some unique ideas.

20. Lower Risk of Burnout

It is very frustrating when a company hires a promising candidate only to lose the employee to burnout. This is not an overnight problem; burnout takes months or years to develop. Once it does, the affected person needs professional help to deal with its symptoms:

Severe physical and emotional fatigue
Cynicism (lack of interest in work)
Feeling of incompetence (leads to lack of productivity)

Burnout can occur as the result of a lack of employee engagement. Employees who are happy to go to work and feel excited about the work they are doing and the contribution they are making to the company are less likely to feel the sense of cynicism that goes along with feeling burnt out.

Engaged workers have a sense of purpose that allows them to feel they are competent and their talents are needed by the company. This sense of purpose also helps to keep their emotional and physical energies up, even during personally challenging times.

One final employee engagement secret

Encouraging employees to keep a good work-life balance shows you’re a caring employer. Don’t call them during weekends or when they’re taking vacation time. People need time to completely disconnect from work. And just because someone works from home doesn’t mean they should be on call 24/7. Respect people’s space and soon you’ll see improvement in employee engagement.

If you are still wondering what the benefits of employee engagement for your organization are, we have prepared a short infographic that sums up everything you need to know:

To move towards a better and more engaged workforce, organizations need to focus on the human development of individuals and teams. Employee engagement is a core concern in their value-defining strategy that is worth the investment.

Employee Engagement

Time to start or overhaul an engagement strategy? Capitalize on Employee Engagement Opportunities.

Why is employee engagement important?

Put simply, employee engagement occurs when people are happy with their professional roles and passionate about what they do. Highly engaged employees tend to work harder as they believe in the company’s mission and trust its values.

Employee engagement is incredibly important to an organization because employees who are engaged are more likely to do their best work. Plus, employee engagement is important because engagement will likely lead to loyalty; loyal employees are a great asset to a company because they are likely to tell others about the fantastic place they work, making them company advocates.

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