Why Is Employee Engagement Important for Business?

Mary Gormandy White
Employee Engagement

Employee engagement can be defined as " the emotional commitment the employee has to the organization and its goals." Employees who are engaged feel a strong sense of commitment to the organization and their role within it, and so they tend to "own" the company's goals. They tend to exert higher levels of "discretionary effort" than employees who are disengaged, leading to increased productivity and other positive results.

Impact of Employee Engagement

Employee engagement can impact organizations in a number of significant ways, including increasing positive outcomes and reducing negative ones.

Increased Positive Outcomes

Positive outcomes associated with high levels of employee engagement include:

  • Productivity: According to a Harvard Business Review (HBR) report, companies that have highly engaged employees enjoy higher levels of productivity than those with disengaged workers. Workers who feel engaged tend to stay focused on their duties, performing quality work in an efficient and effective manner.

  • Innovation: HBR also credits high levels of engagement with an increase in innovation. Gethppy.com points out that the collaboration that takes place among team members who feel a strong sense of engagement can set the stage of innovation to occur.

  • Customer satisfaction: The results of a 2013 Gallup study indicate that there is a strong positive correlation between receiving high ratings from customers and having employees report high levels of engagement. According to the National Business Research Institute (NBRI), the pride that engaged employees take in their work shines through to customers, ultimately influencing their decision to buy and overall customer experience.

  • Employee referrals: Employees who feel a sense of emotional connection to their companies are more likely to refer people they know to apply for jobs with the company than those who are less engaged. Receiving employee referrals from current workers benefits the company in a number of ways, including reducing the time to fill open positions and boosting the quality of candidates.

  • Retention: Workers who have high levels of engagement are much more likely to stay with their companies than those who do not. After all, why would anyone leave a company when he or she feels a strong emotional connection to the organization and the work he or she performs on behalf of the company?

Decreased Negative Outcomes

Negative outcomes that are often reduced when a business does a good job with employee engagement include:

  • Absenteeism: Rates of employee absenteeism are often higher in companies that have low levels of employee engagement. Simply put, workers who don't feel a sense of commitment to their organization or the work they perform are more likely to be absent from work than those who do.
  • Work-related injuries: According to Insync Insights, workers who aren't engaged "are less focused on their work and more likely to make mistakes," which can lead to workplace safety problems and accidents. Additionally, when a lack of engagement leads to issues with chronic absenteeism, the workers who do show up are often overworked, which can lead to an increase in the number of job-related injuries.
  • Attrition: According to The McQuaig Institute, the three most common reasons employees give for voluntarily quitting a job are directly tied to Engagement. These reason are: having a poor relationship with one's supervisor, not believing in the organization's mission, and a lack of growth or advancement opportunities. With that in mind, it's not surprising that a 2016 Glint study indicated that the "attrition rate of disengaged employees is 12 times higher than highly engaged employees."
  • Recruiting expenses: With the increase in employee retention and referrals paired with the decreased attrition associated with an engaged workforce, a company with high levels of engagement can often expect to reduce spending related to talent acquisition - at least when it comes to replacing workers. When a company's commitment to engagement helps keep people with the company, then fewer resources will have to be directed toward finding replacements for good employees who choose to leave.

Bottom Line Impact

The combination of improved positive outcomes and decreased negative outcomes associated with employee engagement make it clear that this important concept can have a significant impact on the company's bottom line profitability. Companies with engaged employees are uniquely positioned to maximize efficiency and effectiveness, as well as increasing revenue, strengthening customer relationships, and minimizing costs associated with a lack of engagement.

Key Factors Impacting Employee Engagement

Many factors impact whether or not employees are likely to be engaged, from selecting the right team members and structuring jobs appropriately to the overall organizational culture and management behaviors and attitudes. Key drivers that impact whether or not employees are likely to be engaged include:

  • Positive relationships with immediate supervisors
  • Having confidence in senior leadership
  • Feeling proud to be part of the company

There isn't a quick fix for creating employee engagement. You can't train people to be engaged, as engagement is not a training issue - at least not for the employees. Company leaders often need training regarding how to create a culture that is conducive to engagement, but engagement itself is not something that can be taught.

Moving Toward a Culture of Engagement

Engagement a feeling, and it's impacted by many factors within the work environment. If you're ready to commit to cultivating a culture of engagement in your organization, you'll need to start with accurate insights into how workers feel about the company. Start with an employee engagement survey and use what you learn to leverage the support of leadership, as well as identify the best strategies for employee engagement to build connections based on the unique needs of your workforce.

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Why Is Employee Engagement Important for Business?