Bamboo Blog

The Major Benefits of Employee Engagement

You likely have someone responsible for tracking your organization’s finances. Someone watches customer satisfaction and whether or not you’re gaining or losing clients. Managers keep an eye on employee productivity and performance.


Because all of these factors impact your organization’s health and ability to make money.

Is your organization as deliberate about evaluating employee engagement? Chance are, you’re like most organizations and rarely measure it—64 percent of organizations only measure employee engagement once per year, and only 8 percent of executives reported that their organizations measure monthly or more frequently.

This represents a huge missed opportunity for organizations as engagement has a massive impact on everything from financial performance to retention to employer brand and more.

Improved Financial Performance

Engagement can have a huge impact on your organization’s financial performance. One study found that disengaged employees cost organizations between $450 and $550 billion annually. On the flip side, high employee engagement can have incredibly positive effects. In another study, organizations with engagement scores in the top 25 percent had:

  • Twice the annual net profit
  • 2.5 times greater revenue growth than those in the bottom quartile
  • 12 percent higher customer advocacy

While some might argue that it’s easier to find a budget for engagement initiatives when your organization is highly profitable, engagement initiatives don’t have to be costly. Just start with what you can afford. Many engagement initiatives driven by HR—like manager training, employee development, or better feedback loops— are very effective and simply take thoughtful planning. Then, as engagement helps your organization become more profitable, you can consider other additions.

Higher Retention

compensation conversation

Many organizations look beyond the mark when trying to improve retention. Instead of addressing the root of their retention problem, they add “fun” benefits like a cereal bar in the breakroom or game room to mask deeper issues. Instead, organizations should look to increase employees’ engagement—organizations with high engagement have 40 percent lower turnover than those with low engagement levels.

Employees may come for the pay, benefits, title, or prestige of the company, but they stay for meaningful work. 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 engage with their work.

Creating an engaging work experience for your employees also gives you a unique advantage in today’s competitive hiring market. There will always be a company that can pay a higher salary or provide flashier benefits than what your organization offers—these elements are easy to replicate and upgrade.

But engagement is not so easy to copy. When employees have that kind of experience at your organization, they are more likely to stay because they won’t be able to find exactly the same thing somewhere else.

Better Employer Brand

People are pretty vocal about their experiences with organizations, and your organization is no exception. If you don’t believe me, just check out your organization’s profile on Glassdoor.

For good or bad, your reputation creates an employer brand for your organization. When you consider that “84 percent of passive job seekers would think about leaving their current employer if another with an outstanding rating made a job offer,” it becomes obvious how impactful employer branding is.

Employee engagement is a major driver of your employer brand. Josh Bersin said it well: “Engagement, or your ability to create an Irresistible Organization, is fundamental to your employment brand. People go home each night, talk to their spouse, friends and family, and spread the word about your company. If they’re not happy, word gets around.”

The reverse is also true: when people see or hear about the meaningful work your employees get to do, the deep and thoughtful employee experience you deliberately craft, and the level of happiness and satisfaction your employees have, they’ll take note.


The benefits of employee engagement are far-reaching and can be a huge boon for your organization. Luckily, your leadership team probably agrees: 85 percent of executives rate engagement as an important or very important priority.

So, 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.

BambooHR is the #1 HR software for small and medium-sized businesses. We set you free from spreadsheets so you can do great work.

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