Why employee engagement is key to company success

employee engagement
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Employee engagement is one of the most important indicators in gauging work satisfaction. Employees today want to be involved in their work, enthusiastic about the organization they work for, have a sense of belonging, and be afforded flexibility around schedules and location.

Belonging is at the top of the most recent Global Human Capital Trends survey with 79% of survey respondents saying that fostering a sense of belonging in the workforce was important to their organization’s success in the next 12–18 months. 93% agreed that a sense of belonging drives organizational performance.

Despite employee engagement being viewed as positive company-wide, the majority of employees are disengaged at work. According to Gallup data, the overall percentage of engaged workers during 2022 is only 34%, down from 39% in 2021. 

Low employee engagement can be caused by several factors including lack of recognition by managers, poor company communication and not having a better understanding of the mission of the company and engagement efforts. More than ever, employee engagement is a strategic business objective because engaged employees lead to long-term employee retention, higher employee performance, improved quality of work, and organizational success.


What is employee engagement?

According to Wikipedia–“One who is fully absorbed by and enthusiastic about their work and so takes positive action to further the organization’s reputation and interests. An engaged employee has a positive attitude towards the organization and its values.”

“In contrast, a disengaged employee may range from someone doing the bare minimum at work (aka ‘coasting’), up to an employee who is actively damaging the company’s work output and reputation.”

Employee engagement has also become synonymous with concepts like employee satisfaction and the employee experience, which is more about the complete employee journey from hiring, employee recognition, to when they leave their job.


Why is employee engagement so important?

For engaged employees who are happy and completely committed to their work, it’s more than just a paycheck – it is the dedication towards their employers and role that makes them passionate about their work, which is often reflected in business success and employee engagement.

If you’ve been wondering why employee engagement is important and how to improve it, start with employee communication.

Employee communication remains the most essential tool to develop strong working relationships among employees and achieve higher productivity rates. Companies that offer clear, precise communication can swiftly build trust among employees.

Often, companies miss the core issues related to employee engagement because executives assume an engaged workforce is directly linked to salary and compensation. 

Most leaders figure employees leave the company due to the lack of promotional opportunities or the lure of a new job package elsewhere.

Connection, communication, and engagement are often the three most vital aspects for the growth of many organizations, both internally and externally.

However, some recent studies contradict this, showing other more important factors directly impact employee engagement. These include:

  1. Employee trust in the company’s leadership,
  2. Employee relationships with the management teams/supervisors, and
  3. Employee pride in being a part of the company.

Of these three factors, it turns out cultivating work relationships through proper, clear, and open communication is the core of improving employee engagement outcomes.

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Significance of employee engagement

When employees are engaged, they are more likely to invest in the work they do which leads to high performing employees.


Glassdoor research shows that on average, a 1-point increase in company rating is associated with a 1.3-point increase in customer satisfaction. The same is true for employee engagement. Employees who are engaged are more involved and work harder while disengaged employees are likely to only do the bare minimum to get by. This holds for organizations across multi-industries including healthcare organizations or factories.

Harvard Business Review found that organizations that scored higher in employee engagement reported 48% fewer safety incidents and 41% fewer patient safety incidents.

Benefits of employee engagement

Employee retention

Benefits of employee engagement

Human resources leaders are focused on improving employee engagement initiatives at their organization, and retention is one of the key reasons. 

Organizations with high employee engagement reduce both turnover and hiring costs and disengaged employees are a major factor contributing to high employee turnover

Engaging employees is critical for retaining top talent and is an important piece of the employee satisfaction puzzle, as disengaged employees are more likely to leave their jobs. 

According to Forbes, employees engaged in their work are more likely to be motivated and remain committed to their employer. This leads to achieving more business goals and helping to drive the organization forward.

Employee productivity

Employees who are engaged at work are more likely to be productive consistently, which leads to a more high performing workforce. 

Companies with a high level of employee engagement are more profitable by a factor of 21%, according to TechJury. The Workplace Research Foundation found that employees who are engaged are 38% more likely to have above-average productivity. 

employee engagement

Increased profitability

Highly engaged teams show 21% greater profitability, according to Gallup. If that isn’t enough to encourage leadership to see the ROI on and implement employee engagement strategies, we’re not sure what is!

Less burnout and better mental wellness

Mental health and burnout are finally coming to the forefront in business, and it couldn’t come at a better time. The Covid pandemic has only exacerbated the stress levels of employees, with companies now seeing a record 70% burnout rate and nearly half of U.S. workers are suffering from mental health issues. Supporting your employees with a real workplace wellness program leads to a better employee experience and stronger employee engagement.

Reduction in absenteeism

Every employee has to miss work once in a while, but when those days off become too frequent, it becomes a problem and is called absenteeism. This could be a sign that your organization and work environment needs some employee engagement adjustments before the activity starts negatively impacting the company.

Firstup allows us to make it happen
“The best way to reduce turnover is to increase engagement. One of the best ways to energize the team about the work they’re doing is to highlight it for the rest of the organization to see.”

Levels of employee engagement

Employee engagement measures how employee feel about their entire organization. Based on their perceptions of their workplace, employee engagement profiles are categorized into four main groups.

Highly engaged employees

Highly engaged employees hold very favorable opinions of their place of work. When employees feel connected to their teams, love their jobs, and have positive feelings about your organization, they’re going to want to stay and put in extra effort to help the organization succeed. These “brand advocates” speak highly of their company to family and friends. They encourage other employees around them to do their best, leading to higher employee engagement amongst the entire team.

Moderately engaged employees

Moderately engaged employees see their organization in a moderately favorable light. They like their company but see opportunities for improvement. These employees are less likely to ask for more responsibilities and may underperform. There is something about the organization or their job that holds them back from full engagement.

Barely engaged employees

Barely engaged employees feel indifferent toward their place of employment. They usually lack motivation for their position and will only do as much as they can to get by—sometimes less. Companies that don’t work at maintaining employee engagement may see employees researching other jobs and are a high turnover risk.

Disengaged employees

Disengaged employees have a negative opinion of their place of work. They are disconnected from the mission, goals, and future of the organization. They lack commitment to their position and responsibilities. It’s important to understand how to handle disengaged employees so that their negative perceptions don’t impact the productivity of employees around them.

This variation of the hierarchy reflects employee engagement level as determined by how well their needs are being met.

How to improve employee engagement

employee feedback

If you’re in HR, you must create an environment that encourages employees to naturally want to be involved in and care deeply about their work. If you want high levels of involvement, motivation, trust, commitment, and empowerment, invest your efforts in improving employee communication.

For large companies, ensuring employees are aligned with the changing priorities of the business is also vital. This is precisely why internal communication is even more essential today.

“Don’t lose sight of the value of communication. It’s not a “nice to have,” it’s a “need to have.” It’s in the bloodstream of every business objective, every element of a mission statement or core value. Be thoughtful and thorough about how you approach it, both editorially and technically and your organization will benefit.”

— Paul Baltes, Director of Communications at Nebraska Medicine

If employees lack relevant, accurate, engaging information and instruction, how can you expect them to do their jobs well (much less be excited about their work)? With proper communication, employees will minimize the time and resources they might otherwise waste.

Importance of effective communication in the workplace

Encouraging proper employee communication can connect employees with your company. 

With proper communication, employees start to identify themselves with the company’s vision, values, and goals. They are then enthusiastic about doing better and becoming more engaged in every aspect of their jobs.

That includes even your hybrid workforce or employees who might spend most of their time in the field. This is the population that’s most vulnerable to feeling disconnected from the company. 

If a large part of your workforce does not come into a central office every day and instead 1) works remotely from home, or 2) spends lots of time out in the field, you need to pay particular attention to what you can do to make sure your communication and employee engagement strategy reaches those groups

Learn the 5 steps you can take at your organization to increase engagement and improve communication satisfaction, regardless of the location of your employees

Using communication to improve employee engagement

When you improve employee engagement, you improve business outcomes and therefore increase your value as an human resources professional.

Here are some key steps teams can take to drive employee engagement strategies:

  • Develop clear internal lines of communication and execute the strategy effectively within the company.
  • Enable and promote better organization transparency through communication.
  • Effectively communicate business plans and strategies for every member of the team.
  • Encourage open lines of communication within the company between employees.
  • Use an engagement surveys to get the inside scoop on how employees are feeling.
  • Recognize the efforts made by employees on various grounds and make employees feel valued.
  • Use a workforce communication platform to integrate your communication channels to target, personalize, and measure your employee engagement.

If employees lack relevant, accurate, engaging information and instruction, how can you expect them to do their jobs well (much less be excited about their work)? With proper communication, employees will minimize the time and resources they might otherwise waste.

Using communication to improve employee engagement

Communication is also key to setting clear expectations. When employees lack guidelines about what’s expected of them, they won’t know precisely what they need to do, or by when. Communication in this area helps them build mutual respect, prioritize tasks, and plan their workdays efficiently.

Encouraging proper employee communication can build a strong bond between your company and your employees and drive employee engagement. With proper communication, employees start to identify themselves with the company’s vision, values, and goals. They are then enthusiastic about doing better and becoming more engaged in every aspect of their jobs.

Lastly, start really listening to constructive feedback and what your workforce is telling you. Here are three ways to jumpstart meaningful employee listening and seek out the essential conversations about employee engagement and company culture.

The value of the digital employee experience

Finally, if you want to create effective employee engagement and communication as HR leaders, you need to show the value of the employee experience.

The employee experience affects everything from employee engagement and productivity to the customer experience. How can you prove to the c-suite that the financial performance results will be worth the investment in increasing employee engagement?

We’ve compiled real-world advice from business leaders who transformed their digital employee experience (DEX) by gaining executive buy-in at every step. 

Learn how they leveraged employee data and built support across the company to achieve their goal. Plus, get a free roadmap you can use to plan your DEX project.

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