Why is Employee Engagement Important?

Written by
Connie Du
Connie Du

This is the second chapter in our series about employee engagement! Get ahead of the game by downloading the whole guide here

Employee engagement can be the difference between an employee who just does enough to get by and an employee who always goes the extra mile.

However, understanding and measuring engagement isn't as simple as deciding if someone is "engaged" or "disengaged"—there is a spectrum or range that most employees fall somewhere on. And where they end up on that range is likely to make a bigger impact on your organization's goals than you might realize.

The state of employee engagement

The good news: employee engagement is easier than ever to measure and improve.

The bad news: it continues to be a focus probably because many employers still need substantial help creating a company culture of engaged employees. 😬

Employee engagement trends fluctuate from year to year, but one trend typically stays the same: workplace engagement tends to be a major challenge for most employers. Up to 71% of employees are not engaged with their work at all, spelling trouble for their productivity and quality of work.

In our State of Employee Engagement Report, we found that employees believe that less than 70% of their colleagues are engaged with their work. So not only do you have disengaged employees, but their disengagement is noticeable to others. 🙈

Instead of talking about the negative impacts of disengaged employees, let's cover the benefits your company stands to enjoy from high employee engagement levels.

Employee engagement benefits

Productivity

The studies prove it: engaged teams are 21% more productive than disengaged teams–even if they're remote! Makes sense, doesn't it? When you're disengaged with your work, getting your tasks done feels like a drag. When you multiply that by all the disengaged employees in the U.S., you're looking at a $450-$550 billion price tag in lost productivity.

Meanwhile, engaged employees have a deep understanding of why their work matters and their company's big-picture goals. They're not just doing the work–they're the ones driving innovation, creating products and services, pursuing new ideas and revenue streams, and pushing their organization toward financial success.

Financial performance

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From our own State of Employee Engagement Report, we found that highly engaged organizations are more than twice as likely to report being top financial performers in their industries. 🤑

There's a strong correlation between employee engagement and company success, even in times of recession. Companies in the top quartile for employee engagement have 22% higher profitability than their competitors, and this makes a lot of sense when you take into account the impact of engagement on productivity and retention.

Next time your leadership team questions the ROI of focusing on employee engagement, you know where to point them.

Customer experience

You may not immediately connect employee engagement with customer experience, but the two go hand-in-hand!

Think about it: You employees are the ones that are interacting with your customers. An engaged employee is more willing to go the extra mile for a customer that needs help, find solutions that benefit the customer experience, and generally, be the friendly face of the company! 🤩

Even employees that don't directly interact with customers make an impact by being thoroughly engaged with the products and services they're building. Overall, companies with engaged employees tend to have 10% higher customer ratings than companies with disengaged employees.

Employee engagement is so essential to the customer experience that it's identified as one of the four core competencies of a customer-centric culture, based on research done by Qualtrics.

Retention

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According to our Employee Engagement and Modern Workplace Report, we found that 66% of Actively Disengaged employees are on the job hunt, compared to only 16% of Engaged employees.

Humans naturally strive toward a sense of purpose and self-actualization–and if they feel consistently disengaged with the work they do, they're likely to look for a different opportunity. That doesn't mean your company is helpless to turnover, though! Focusing on employee engagement strategies is a great way to counteract turnover. For an in-depth understanding of employee turnover and retention, check out The Ultimate Guide to Employee Retention.

Considering that the cost of replacing an employee can easily exceed 200% of their salary, this is an area that you should be watching carefully.

Think about it–decreased morale and productivity, lost institutional knowledge, the time it takes to interview and onboard an employee... it adds up fast. Our Cost of Employee Turnover Calculator can help you put a price tag on how much your company stands to lose when an employee leaves.

Next steps

Does your team still have work to do around employee engagement?

It can be easy to attribute employee disengagement to individual personalities. But waving away engagement issues as, "Well, they're just lazy," never helped anyone, least of all your organization.

If you read Chapter 1, then you already know that you can influence employee engagement for the better. So, in our next chapter, we'll cover the data-driven strategies that will help increase employee engagement at your organization.

We also invite you to learn more about Bonusly’s employee engagement platform and join us for a demo to understand how you can start building a highly-engaged organizational culture.

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Originally published on May 13, 2020 → Last updated May 13, 2020

How Employee Engagement Impacts Your Bottom Line

June 08, 2015 by George Dickson George Dickson

11 of the Most Enlightening Employee Engagement Statistics

December 18, 2019 by Elle Mason Elle Mason

What Is Employee Engagement?

May 07, 2020 by Connie Du Connie Du
Connie Du

Connie is on the marketing team at Bonusly and is dedicated to making workdays a little brighter for everyone. ☀️She loves writing, her cats, and a well-placed emoji.

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Bonusly is a fun, personal employee recognition and rewards program that helps people feel engaged and successful at work. ✨