What is employee engagement and why is it important?

As a manager or business owner, it’s easy to assume your employees possess the same passion for your business as you do.

But according to a recent Gallup study, only 36% of employees are engaged in the workplace, leaving 64% of your employees “coasting” or actively disengaged at work.

That’s an issue because employee engagement affects almost every aspect of your business, from profit margins and stock value to customer experience and employee health.

If you’re wondering what employee engagement is and how it can help your business, good news—you’ve come to the right place.

What is employee engagement?

Employee engagement is an employee’s emotional investment in the company’s long-term goals and objectives.

When employees are highly engaged at work, they demonstrate a desire to complete goals and hit targets—not because you’re paying them more to do so, but because they believe in the company’s mission and want the business to succeed.

For example, employees who work for forward-thinking startups and non-profit organisations are often highly engaged because they’re passionate about the concept and understand how their work makes a difference.

But that doesn’t mean larger organisations are incapable of engaging their employees.

Technology giant Microsoft, for example, has acquired market-leading levels of employee engagement by prioritising self-development, communication, pulse surveys and team-building events.

A fully engaged employee typically:

Of course, employee engagement isn’t a straightforward binary metric. It’s a spectrum with various levels of employee engagement ranging from fully engaged to fully disengaged.

What isn’t employee engagement?

Employee engagement is often confused with other HR terms such as employee happiness, employee satisfaction and employee well-being.

While these are vital aspects of a healthy business, it’s worth acknowledging that these are not synonyms for employee engagement. 

Take the happy employee, for example.

They might be smiling, laughing with employees and whistling through the corridors, but does that mean they’re engaged with their work and passionate about their role?

Not necessarily.

Depending on the person, they could be happy for a variety of reasons: Perhaps they were recently awarded a pay rise or end-of-term bonus, or maybe things are going well in their personal lives.

Whatever it is—just because they’re happy, that doesn’t mean they’re working hard or feel connected to the company’s aspirations.

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Why is employee engagement important?
[13 key benefits]

When your employees are actively engaged with their roles, it creates a domino effect that positively impacts multiple areas of your business, from customer experience to employee health.

In the following section, you’ll learn 13 benefits that commonly occur as a result of highly engaged employees.

1. Your employees are more satisfied

While happy employees aren’t necessarily engaged, engaged employees tend to be happier and more satisfied at work. 

That’s because engaged employees feel appreciated by their employer and see the impacts of their work. That gives them a sense of purpose and accomplishment—two factors closely tied to happiness.

Fun fact: 30% of Americans view their work as “just a job to get by” rather than a career.

2. Your employees are healthier

One way to achieve higher levels of employee engagement is by implementing new health and well-being policies. Things like fresh fruits and nuts in the employee breakroom, corporate yoga and fitness memberships simultaneously improve employee health and boost employee engagement.

Fun fact: In one study, nearly 60% of surveyed employees complained of MSK pain, predominantly in their lower back, neck and knees.

3. Your employees are safer

Engaged employees are more proactive, autonomous and conscious throughout the working day. That means they’re more aware of potential hazards and are more likely to flag them to management. 

Compare this to disengaged employees who are typically more absent-minded or blasé at work, which leads to accidents.

Fun fact: 70% fewer accidents occur in highly engaged workplaces.

4. Your employees are more loyal

When your employees are engaged, they form an emotional and rational connection to the company’s goals and objectives as well as a strong bond with their colleagues. Because of this, your employees are less likely to take unnecessary days off or switch to a different—perhaps higher paying—job.

Fun fact: A LinkedIn study revealed that engaged employees are 87% less likely to leave their current roles than their disengaged counterparts.

5. Your employees are more productive

Engaged employees exhibit more passion and dedication toward the company’s goals and objectives. Because your employees care about the company’s success, they’re much more likely to go the extra mile or put in additional hours when needed.

And because engaged employees are motivated by company success, they’re typically more invested in self-development, actively searching for ways to improve themselves and company processes.

Fun fact: Highly engaged businesses exhibit a 14% difference in productivity compared to their disengaged counterparts.

6. Your employees are more supportive

When your workforce is engaged, a sense of unity arises that makes your team more supportive of company initiatives. That’s because engaged employees are driven by a greater good—that is, the success of the company—and they’re willing to try new things in pursuit of that goal.

Fun fact: Only 21% of employees in the U.S. are engaged at work.

7. Your customers are more satisfied

When employees are engaged it’s reflected in the customer experience. That’s because your employees care about the company and its mission and they’re motivated to provide customers with a positive experience.

Companies with high levels of engagement will typically earn a reputation for excellent customer service because customers feel they’re genuinely cared for.

Fun fact: Customer experience leaders have 60% more engaged employees.

8. Absentee levels are reduced

If you start to see employee absentee levels rise, it could mean that your employees are disengaged, because these two metrics—absenteeism and engagement—are closely correlated.

When employees are engaged, they’re much less likely to take time off work because they care about the success of the company and their team. They know their presence is critical to keeping workflows on track, so they’ll do their best to avoid taking time off work.

Fun fact: Engaged workforces have lower employee absenteeism rates by up to 41%.

9. Employee turnover is reduced

We’ve already mentioned that engaged employees are much more loyal to the company they work for. Naturally, this has a direct impact on employee turnover rates.

Engaged employees work for you because their ethics and values align closely with those of the company. They are emotionally connected to the company’s goals and objectives, which means they’re unlikely to jump ship even if they’re offered a better salary.

Fun fact: 73% of employees would think of leaving if the right place called.

10. The quality of work is improved

When your employees are engaged, they’re more likely to go the extra mile without encouragement or incentive from management. They don’t need a carrot dangled in front of their nose to get them to work harder. Instead, they are motivated by a desire for company success. 

Fun fact: 77% of employees say that a strongly engaged culture helps them do their best work.

11. Your company acquires better talent

Engaged employees act as advocates for your company. Because they’re satisfied at work and care about the company, they’re likely to talk positively about it to their friends and family. They might also create and share posts on social media platforms.

As your employees share their positive experiences in-person and online, it will eventually catch the attention of new talent in search of employment. The recruitment process will also be faster because you’re working with referrals from trusted staff members.

Fun fact: 89% of career seekers think it’s important for an employer to have a clear mission and purpose.

12. Your company’s bottom line is reduced

The combination of these aforementioned benefits equals reduced costs for your business. Engaged employees lead to a faster recruitment process, fewer absent employees (which minimises gaps in workflows and a reduced employee turnover rate.

Fun fact: In the U.S, disengaged employees cost organisations around $450-550 billion each year.

13. Your company earns more money

There’s a commonly cited employee engagement term known as the Engagement-Profit Chain which demonstrates the monetary ROI of an engaged workforce.

Here’s how it works:

  1. Engaged employees are more productive, offer better customer service and produce better quality work, which leads to…
  2. More satisfied customers and an improved brand reputation, which leads to…
  3. More leads and returning customers increased revenue and a reduced bottom line, which leads to…
  4. Increased profit, which leads to…
  5. Higher shareholder returns.

As you can see, employee engagement isn’t only about improving the experience for your employees and your customers—it results in tangible benefits too.

Fun fact: Highly engaged teams show 21% greater profitability.

Boost employee engagement with a team-building retreat

The easiest way to improve employee engagement is by organising a team-building retreat. With a tailor-made experience, you can escape the office and target the aspects of your business that need the most work.

Surf Office makes organising a team-building retreat cost-effective and hassle-free by handling all the tricky stuff. That includes finding accommodation, creating a schedule, arranging transfers, contacting local vendors and much more. 

This means you can focus on your workload while we organise a fully customised offsite retreat for your team.

If you’re ready to unlock new levels of engagement in your team, reach out to one of our specialist retreat planners today.

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