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Why is Employee Engagement Important for Organizations? 8 Vital Reasons to Consider 

Why is employee engagement important? It’s a million-dollar question that organizations need to answer and acknowledge. Need help and enlightenment? Keep reading.
Written by: Penny Swift
why is employee engagement important
Published: January 8, 2024
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Employee engagement indicates the level of involvement, commitment, connection, and enthusiasm employees have toward their organization and its goals. It’s considered an important factor in today’s workplace as it directly influences the morale of employees as well as the productivity and overall success of the organization. 

Gallup has been tracking employee engagement across thousands of organizations globally since the 1990s by asking simple questions in a wide-reaching survey. Known as the Q12 Survey, the name represents 12 needs that managers can meet to improve the productivity of their employees. Gallup updates the results regularly to keep up with changing trends.

The August 2023 Gallup poll employee engagement trends shows that 33% of U.S. employees are engaged. The percentage of actively disengaged employees is 16%. As you can see from the graph below, employee engagement levels haven’t been this high since 2018. But they are still lower than they were in January 2020 during the pandemic.

The percentage of actively disengaged employees is more or less the same as it was in January 2021, but lower than it was in 2022. 

US Employee Engagement Trend

“Measuring and managing engagement in your organization is critical to the success of your employees and organization as a whole. Engaged employees have higher wellbeing, better retention, lower absenteeism and higher productivity.”

Gallup 2023

We’re going to explore why employee engagement is so essential for the full spectrum of organizations. We’re also going to look at how it impacts different aspects of the workplace. Then we’ll suggest some effective strategies you can use to improve employee engagement

Let’s start by looking at what employee engagement entails and uncover its immutable impact on functioning organizations. From here, we’ll move on to the million-dollar question, Why is employee engagement important?

What is Employee Engagement?

Employee engagement refers to the emotional commitment employees have to organizations. It means that the engaged employee cares about his or her work and company. When employees are engaged, they are not just working for a paycheck or the next promotion, they are working towards the goals and objectives of the organization.

what is employee engagement

Ultimately, research has consistently shown that investing in employee engagement — no matter the business context — can improve an organization’s bottom line. Furthermore, the relationship between engagement and performance becomes even stronger during economically challenging times. 

Unlike a disengaged employee who may complete the bare minimum required to keep a job, an engaged employee wants to go above and beyond. Those employees who are engaged strive to exceed expectations. They contribute actively, contributing to their role as well as the overall success of the company. They exhibit a vested interest in the future of the organization they work for, treating the company as if it were their own.

Data from the Quantum Workplace Our Best Places to Work shows employee engagement climbed steadily for six years, reaching its highest level in 2022. Quantum’s The Top 6 Employee Engagement Trends in 2023 states that this indicates a 77,4% engagement level. 

The same company’s Driving Employee Success report on The Top 6 Employee Engagement Trends in 2023 shows that 92% of executives believe engaged employees perform better. More than half (56%) of executives reckon they’ve achieved a positive ROI from their employee engagement efforts. Even employees agree, with 62% of them saying their organizations have achieved positive results from investing in employee engagement.

Ultimately, “Engagement leads to better employee and business performance.”

Why is Employee Engagement so Important?

A wide range of benefits underpin the significance of the question, “Why is employee engagement important”? These range from increased productivity to enhanced employee morale, all linking directly to the advantage of having highly engaged employees. 

Let’s dig a bit deeper to see what high employee engagement can achieve.  

#1 Increases Productivity

Employees who are engaged are naturally more productive. They bring passion and interest to their work, which enables them to put in the effort required to achieve higher productivity levels. Gallup substantiates this in its Q12 Employee Engagement Survey, showing that highly engaged business units achieve a 23% increase in productivity.

This is simply because when organizations improve employee engagement, their employees have a higher sense of wellbeing. This results in a better retention rate, lower absenteeism, and … you got it … higher productivity. 

#2 Improves Employee Morale

Employee engagement is closely tied to morale. When employees are engaged they feel more valued and appreciated. So, it stands to reason that this enhances their morale and contributes to a much more positive work environment. 

The Achievers Workforce Institute’s 2023 Employee Engagement and Retention Report shares the results of a survey of more than 5,000 people from across the globe. Of the surveyed employees, 79% would be more likely to stay at a job where they feel supported, cared for, and valued, than a job where they don’t feel valued but are paid 30% more.

High morale often leads to a commitment towards quality work and a reduction in conflicts at work.

#3 Enhances Employee Retention

Organizations that prioritize employee engagement tend to have lower turnover rates. This is because engaged employees generally feel a strong connection and loyalty to their organization and are less likely to leave. In contrast, disengaged employees are often searching for other more satisfying opportunities.

In an article about The Benefits of Employee Engagement, Gallup states that companies with low employee engagement tend to see turnover rates that are 18-43% higher than teams with high employee engagement. They also identify an 81% variation in absenteeism.

#4 Fosters Innovation and Creativity

A working environment that promotes employee engagement inevitably fosters innovation as well. Employees who are engaged have a vested interest in the success of the company which drives them to think out-of-the-box and introduce innovative, productive ideas into the workflow.

They feel empowered to share their ideas without fear of judgment. Also, when employees are engaged, they are more likely to collaborate, communicate openly, and actively contribute to problem-solving. This leads to a generation of innovative solutions and creative approaches to challenges. A sense of ownership and commitment that comes with increased employee engagement encourages employees to invest time and effort in exploring new ideas. Ultimately, this drives a culture of continuous improvement and innovation within the organization.

#5 Drives Better Customer Service

Engaged employees often mean satisfied customers. As highlighted in a case study of Trader Joe’s, a stand-out grocery store known for its strong employee engagement, employees who are committed to the organization typically offer better customer experiences, enhancing customer satisfaction and loyalty.

“It’s impossible to have a successful business that relies on human resources and the quality of customer service without satisfied and happy employees. Trader Joe’s “jolly roger crew” are the actual brand.”

How Trader Joe’s Set The Standard For Grocery Stores

#6 Promotes Effective Team Collaboration

Employee engagement also promotes team collaboration. Engaged employees are more willing to cooperate and work effectively in teams, as their commitment to the company’s goals often overrides individual differences and promotes synergy.

#7 Facilitates Adaptability to Change

In today’s rapidly changing business landscape, adaptability to change is crucial. Engaged employees have a deep-seated loyalty towards the organization and are generally more open and adaptable to changes that occur in the business environment.

#8 Positively Impacts Health and Well-being

Engaged employees tend to report better health and well-being compared to disengaged ones. The support, recognition, and positive work environments associated with engagement promote physical and mental health, positively influencing the overall well-being of the employee.

8 reasons why employee engagement is so important

How to Improve Employee Engagement

Employee engagement is something that cannot be overlooked in the modern workplace. Afterall, it plays a pivotal role in maintaining job satisfaction and in enhancing productivity. 

The Quantum Workplace Employee Engagement Trends 2023 report mentioned above provides expert insights designed to help organizations thrive in a business landscape that keeps on changing. 

The report emphasizes that employment success isn’t about choosing between business success, company culture, employee performance, and employee engagement. It encompasses all these elements. In a nutshell, to enhance employee engagement, business leaders need to:

  • Create an engaging employee experience
  • Inspire employee impact by helping employees connect to the roles they play helping to achieve business success
  • Build an organization that attracts new talents and makes those employees working their want to stay

Then, you’ll have employees who take the initiative, are committed to important business objectives, and will go the extra mile to ensure its success.

It’s crucial to realize that effectual measures to enhance employee engagement go beyond casual breakout areas or Friday evening socials. Authentic engagement develops when employees feel valued and involved in an organization’s processes. 

Below are four essential strategies you can use to improve employee engagement in your organization.

Recognize and Reward Employee Contributions

Acknowledging and rewarding an employee’s hard work is one of the most effective ways to boost engagement. When employees see that their contributions matter, they’re likely to work harder and be more committed to their tasks. Recognition isn’t only about grand gestures or monetary rewards — it can be as simple as a verbal or written acknowledgment of a job well done. Consider how often you say “thank you.” 

According to a survey by OnePoll on behalf of Bonusly, 65% of respondents said they would work harder if they felt like their contributions were noticed by management. But it’s not just gratitude from managers that makes a difference. Of those surveyed, 65% felt they would remain in a position with an unappreciative boss even if their co-workers appreciated their work.

Here’s how you can get started with recognizing and rewarding your employees:

  • Public recognition in team meetings
  • Personalized thank you notes
  • Performance-based bonuses or rewards
  • Employee of the Month programs
  • Career development opportunities

Consider the possible results. You’ll very easily cultivate a work environment where employees feel appreciated and foster a positive employee experience. They will be happier, and your business environment and ultimately its profitability will benefit. 

Establish Clear Career Paths and Growth Opportunities

Another key strategy to improve employee engagement is to develop clear career paths and growth opportunities for all your employees. A disengaged employee could be an individual who feels stagnant in a current role because there is no scope for advancement.

Invest in your employees’ growth by providing them with career development and learning opportunities. This commitment will help employees see a future within the organization and promote long-term engagement.

For example, Amazon allows employees to move around different roles within the global company offering employees a broad spectrum of career opportunities

Try these same strategies in your organization:

  • Mentorship programs
  • Training courses or workshops
  • Opportunities for cross-functional roles
  • Promotion from within

By investing in your employees’ growth, you will be communicating trust in their abilities and potential, which fosters engagement. They benefit and so will the organization.

how to improve employee engagement

Balance Workload and Avoid Burnout

Work-life balance is one of the most important aspects of employee engagement. If employees feel overwhelmed with work, they can quickly burn out and become disengaged. It’s not uncommon for highly engaged employees to exceed their responsibilities. But this can often lead to exhaustion and disengagement — together with all its negativities. 

Successful companies implement strategies to ensure employees find a comfortable balance between their work and personal lives. Depending on your managerial position, you can apply these measures to ensure a balanced workload:

  • Promote flexible working hours
  • Ensure every team member understands their tasks clearly
  • Promote regular breaks during work hours
  • Implement paid time-off policies

Once workloads are managed properly, employees can maintain high productivity levels while avoiding burnout and subsequently remain engaged.

Implement Effective Communication Channels

Communication plays a fundamental role in employee engagement. Proper communication not only enhances transparency but also makes employees feel involved and valued. By creating an open space for dialogue, employees can express their views, and opinions, and suggest improvements.

Salesforce, for example, takes communication seriously. The global tech company utilizes a variety of communication tools to foster a collaborative atmosphere where every voice is heard. Here’s how to implement effective communication channels in your workspace:

  • Regular team meetings to discuss progress and objectives
  • Open-door policies for upper management
  • Using communication software like Slack or Microsoft Teams
  • Anonymously submitted employee surveys to gauge satisfaction levels

The result is that employees understand the direction of the company, feel invested in decisions made, and, ultimately, become more engaged.

What’s Next?

You can improve your internal communications with Cerkl Broadcast, an audience management platform with multiple benefits. Use it to deliver personalized messages to a segmented audience, allowing employees to choose the channel they prefer. Plan the timing and frequency of messages to reach employees at the best possible time for maximum engagement. Use Broadcast’s feedback and analytics tools to improve your employee engagement and internal communications strategies on an ongoing basis. 

Our dedicated Cerkl team can help you create a winning communications plan that will help improve employee engagement and grow your business. Start the ball rolling by accessing our free audit to see how well your communications programs are currently performing. 

FAQ

What is employee engagement and why is it important?

Employee engagement is the emotional commitment and involvement employees have toward their organization. It impacts their motivation, job satisfaction, and overall performance. Moreover, it is important because engaged employees contribute more effectively to an organization’s success, innovation, and positive workplace culture.

What are the 5 Cs of employee engagement?

Typically, the 5 Cs of employee engagement are described as:
Commitment — loyalty to the organization
Connection — feeling a sense of belonging
Communication — open and transparent information exchange
Contribution — active participation and giving one’s best
Culture — alignment with the organization’s values and mission

What is engagement and why does it matter?

Engagement is the extent to which employees are emotionally invested in their work and workplace. It matters because when employees are highly engaged they are more likely to be productive, innovative, and committed, leading to better overall organizational performance.

What are the benefits of employee involvement?

The benefits of employee involvement include increased job satisfaction, higher productivity, improved problem-solving, enhanced creativity, and a positive impact on employee retention. This is because people feel a greater sense of ownership and value in their contributions when they are properly involved.

What is employee engagement and its benefits for the organization?

Employee engagement is the emotional commitment and connection employees have with their organization. Its benefits for an organization include increased productivity, improved employee retention, and higher customer satisfaction. Overall, employee engagement has a positive impact on a company’s overall performance and competitiveness, which impacts positively on the bottom line.

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