The Importance of Employee Engagement: 5 Benefits You Need to Know
The importance of employee engagement cannot be overlooked. It’s essential to a successful organization – in fact, it’s even become a multi-billion-dollar industry.
From improved retention rates, more motivated workers, and a more positive workforce, your company will reap the benefits of better employee engagement. Despite the advantages it has, less than 50% of companies in a 2023 Harvard Business Review survey said they effectively measure employee engagement against business performance metrics.
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What is the Impact of Employee Engagement?
Creating an engaging work experience for your employees gives you a unique advantage in today’s competitive hiring market. There will always be a company that offers a better compensation package or provides flashier benefits than what your organization offers–these elements are easy to replicate and upgrade.
Engaging your employees with work that’s fulfilling and challenging provides them with a sense of accomplishment and growth – something your most talented employees crave. Providing a sense of direction and unity through values, mission, vision, and goal setting helps employees understand their purpose and feel more engaged with their work and team.
There are countless benefits of engaged employees. The following five key benefits can allow your organization to:
1. See Improvements in Financial Performance
Engagement can have a huge impact on your organization’s financial performance. Gallup estimates that disengaged employees cost the global economy up to $7.8 trillion every year.
Disengaged employees can lead to:
- Customer complaints
- Missed deadlines
- Poor sales
These issues can have a direct correlation to the financial success of your company, and drives home the importance of making employees feel valued. Studies have proven that companies with highly engaged employees boast 21% more profitability.
2. Enjoy Higher Retention Rates
Happier and more satisfied employers are less likely to leave and look for work elsewhere. Not only do retained staff help keep consistency in the team and ensure a level of experience in your business, but you’ll also save time and money on training new members.
Many organizations focus on the wrong areas when trying to improve retention. Instead of addressing the root of the problem, they add “fun” benefits like free snacks in the kitchen or a pool table in the breakroom to mask deeper issues. When employees have an engaging experience at your organization, they are more likely to stay because they won’t be able to find the same thing somewhere else.
Organizations are better off looking to increase their employees’ engagement whenever possible. In high-turnover organizations, engaged employees achieve an 18% difference in turnover, but in low-turnover employment, this could be as much as 43%.
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3. Experience Fewer Issues Around Absenteeism
Engaged employees can lead to decreased absenteeism. Absenteeism can be a big problem in the workplace for individuals as well as management. Illness and sickness are inevitable, but if staff are taking off more days than they need it can spin out of control.
Absenteeism is more likely to happen when employees are unsatisfied at work. They may decide to take advantage of certain situations to allow them to have more time off away from the workplace.
The proof is in the numbers – improving engagement can lead to 41% less absenteeism, according to a 2022 report by Gallup.
4. Reap the Rewards of Having Healthier Employees
Another key benefit of engaged employees is that their health may be generally better. According to The American Institute of Stress, job stress costs the United States over $300 billion a year.
This is caused by:
- Employee turnover
- Decreased productivity
- Direct medical and insurance costs
- Workplace compensation
Shifting away from a workplace mentality of high stress and high output, putting more focus on employee wellbeing, and creating a safe working environment could do your staff a world of good — and your organization will be rewarded, too.
5. Improve Your Employer Brand
People are vocal about their experiences at work, making it essential to keep a close eye on measuring employee engagement in an organization. A happy workforce and good relationships with past staff can work wonders when it does come to hiring new employees.
Company reviews are one of the first places candidates look to before deciding if they’ll apply for a role or take a job at an organization. Your reputation creates your employer brand. In an increasingly competitive market, your company needs to do all that it can to stand out.
Similarly, competitors in your industry could pale in comparison after candidates see or hear about the meaningful work your employees do, which can help in the future when it comes to attracting new talent.
How Important is Employee Engagement in Practice?
If you’re looking to strategically improve your organization on multiple fronts – including your finances, retention, and employer brand – employee engagement is a great place to start.
Technology giant Google has done well to promote its employee’s well-being and engagement rates. For the last 15 years, it has been rated one of the best places to work in the United States.
To cultivate this employee engagement, it has implemented:
- A flexible and innovative culture that allows for employees’ personal growth.
- Excellent benefits like free dental, hybrid car subsidies, and on-site physicians.
- Open communication between employees and senior leadership.
- A focus on wellness through on-site yoga and massages.
Some people may argue that it’s easier to find a budget for engagement initiatives when your organization is highly profitable, but that doesn’t have to be the case.
Start with what you can afford. Engagement initiatives like manager training, employee development, and better feedback loops are driven by HR. These can be extremely effective, and simply require thoughtful planning and implementation. As better employee engagement helps your organization become more profitable, you can consider other additions to continue improving.
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