Why Is Employee Engagement Important?

Employee engagement is important for employers to maximize employee performance, contribute to employee success, and boost overall workplace productivity.  It is an indication of the connection between an employee and their workplace. When this relationship is strong, employees can contribute better to the success of their organization as a whole. Many of the most successful companies have become masters at maximizing their employee engagement, and they routinely implement strategies designed to encourage employees to perform at their best.

Understanding the importance of employee engagement and how it can shape a business is crucial to an organization's ability to thrive. In this article, we will examine what employee engagement is, what it is not, why it is essential to workplace success, and how to increase employee engagement.

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What is employee engagement?

Employee engagement refers to how emotionally connected and committed employees feel to their workplace. Engaged employees are often passionate about their position and genuinely care about their organization’s success. When employees are well engaged, staff members work harder, advance company progress, and have a clear vision of the organization’s mission.

What employee engagement is not.

It’s easy to confuse employee engagement with employee satisfaction. However, the two measurements are quite different. Employee engagement relates to employees wanting to expand their company’s progress and success, but it is not synonymous with employee satisfaction or happiness.

For example, satisfied employees are content with their position and enjoy their job. They value their work’s benefits and have positive relationships with their colleagues.

However, a satisfied or happy employee may need more motivation to help the company achieve further success. Though they may perform their job well, they might not desire to think outside the box or motivate their team to improve current operations. A happy employee might love the perks of their job—without paying much mind to the company they are working for.

On the other hand, an engaged employee commits to the values and mission of the company. While employee engagement typically increases satisfaction, employee satisfaction may not increase engagement.

Why is employee engagement important?

Employee engagement matters because it is critical to company performance, customer satisfaction, employee retention, and workplace productivity. Finding new ways to engage employees can spark more passion and drive in the workforce and can be a crucial influence on a company’s growth and longevity.

How employee engagement improves the workplace.

According to Gallup, a workplace consulting and global research group, engaged employees contribute to better business outcomes across industries. Over 50 years of employee engagement research have shown strong correlations between employee engagement and positive business metrics in several domains. Companies that used Gallup’s 12-item engagement survey revealed the following average outcomes [1]:

• An 81 percent drop in employee absenteeism

• A 58 percent drop in patient safety incidents

• A 28 percent drop in theft

• A 64 percent drop in safety incidents

• A 41 percent decrease in quality defects

• A 10 percent increase in customer loyalty and engagement

• An 18 percent increase in productivity

• A 23 percent increase in profitability

The benefits of employee engagement extend not only to the worker but also to the entire company—including customers and stakeholders.

Despite these impressive benefits, Gallup’s surveys find that only 32 percent of the US workforce is engaged [1]. This leaves significant room for the average employer to integrate employee engagement practices into their business strategies and maximize their potential.

How employee engagement increases productivity.

Improved employee engagement increases company productivity, as shown by a meta-analysis conducted by Gallup Organization [2]. Much of this productivity comes from employees who are genuinely passionate about their work and engaged with the success of their organization.

According to Jim Harter, PhD, a chief scientist at Gallup Research, engaged employees tend to be more vigilant within their organization and show a higher level of attention to detail. These employees typically have autonomy over their work and are aware of how their work contributes explicitly to achieving the company's mission. Employees can perform at their best and see how their work benefits the company's larger purpose.

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What are the drivers of employee engagement?

Several main drivers of employee engagement exist. While every organization has a slightly different philosophy and driving mission, many organizations that have won the Gallup Exceptional Workplace Award share similar characteristics [3].

C-level engagement

For one, these organizations start employee engagement at the senior level. In fact, the relationship between employees and managers was found to be a key driver of employee engagement. Managers who promoted employee growth fostered strong relationships and had continual check-ins were correlated with companies with higher employee engagement.

High-quality managers

High-quality management logically aligns with another driver of employee engagement—a strong focus on hiring great managers. Managers who can motivate and coach their employees to rise to new levels within the company boost employee engagement.

Read more: 8 Management Styles in Business: Choosing the Best Fit

Transparent leadership

Employee engagement is also heavily influenced by transparent leader communication within the organization. Employees who feel they can give feedback and share valued opinions often feel more committed to their workplace. They want to feel they are working as an active party within the organization to push forward success rather than replaceable workers who need a voice. While pulse surveys and other feedback tools are great ways to hear employee opinions, it is equally important that those in leadership act on feedback and are receptive to making beneficial changes.

Tips to boost employee engagement.

You can use several strategies to boost employee engagement and maximize business success. Consider the following tips to begin implementing employee engagement strategies:

• Make employees feel valued 

• Help employees connect to the larger company mission and values

• Train employees to be successful in their position

• Offer opportunities for employees to grow within the company

• Recognize employees for their successes

• Communicate feedback in uplifting and positive ways

• Promote a healthy work-life balance

• Encourage team bonding activities 

• Provide benefits to employees

Next steps

Learning more about employee engagement can give you the tools to implement these exciting strategies into your business successfully. To start, advance your skills by taking beginner and mixed-level courses or Specializations on Coursera by top universities, such as the Strategic Leadership and Management Specialization by the University of Illinois at Urbana-Champaign. You can also consider several course offerings focused on effectively leading and managing teams, including Inspiring and Motivating Individuals and Managing Talent, both offered by the University of Michigan on Coursera.