Employee Engagement: Definition, Importance, Benefits, Examples, Trends, Statistics, Best Practices

What is employee engagement in HR? How can you ensure high levels of employee engagement and drive better organizational outcomes? This article defines the concept of employee engagement in the workplace and explains why it is important. It also discusses the benefits of employee engagement and the different types of employee engagement.

Definition of Employee Engagement 

Globally, the emphasis on employee engagement is increasing. But it is not limited to the HR department of an organization — this is a trend that impacts organizations as a whole, and deserves careful attention. 

Employee engagement is the emotional investment that workers make in their businesses. The work they do is guided by the enthusiasm, engagement, and drive they bring to the job. Engaged workers feel a sense of oneness with the company's objectives and align their individual goals with those of the organization. 

Here is another good definition of employee engagement, as per Gartner: “Employee engagement is the extent to which employees feel passionate about their jobs, are committed to the organization, and put discretionary effort into their work.” 

Dr. William Kahn, a professor and organizational psychologist, first formally introduced the concept of employee engagement in 1990. He said that individuals are physically, intellectually, and emotionally interested in their job. Employees may also be disaffected or actively disengaged. 

Disengaged employees, in contrast to their engaged counterparts, just clock their required hours and leave. They do not participate in additional/extraneous, more value-adding tasks,  and they appreciate their employment only enough to guarantee that they receive a salary at the close of each month. 

What is Employee Engagement, and What is it Not? 

Before we get into what employee engagement is and how important it is for an organization, it is crucial to establish what employee engagement isn't. Sometimes any positive employee attitude or conduct is termed employee engagement, whereas any negative employee mindset or action is considered disengagement. However, not everything is that basic or overtly simple. Employee engagement, for instance, is distinct from employee satisfaction or happiness. To better understand its meaning, let us look at the key components of engagement. 

4 Key Components of Employee Engagement 

All of the employee engagement definitions we discussed above have the following core characteristics: 

1. Loyalty 

Employees that are highly involved with their work demonstrate stronger organizational loyalty. The greatest aspect here is that they require less time and focus from their supervisors in order to perform their duties since they feel inherently responsible for their work commitments and the outcomes they have achieved. 

However, it does not take long for actively engaged individuals to become disengaged if the organization lacks a well-established incentive system. Recognition is essential for people to continue advancing throughout their careers.  

2. Commitment:

This refers to the extent to which employees identify with their jobs, responsibilities, and larger organizational goals. Engaged employees are individuals who are captivated committed to by their workplace roles/tasks/duties and are determined to overcome any impediments towards accomplishing these goals. They are responsible for their actions, and  because they are trustworthy and productive.  

3. Mutual trust between the employer and employee:

A consistent and strong employee engagement paradigm can only be created when there is trust and confidence between both parties — the employer and the employee. . 

Employees must be allowed the freedom to complete their tasks as they see fit, which demonstrates the company's belief in them. They shouldn't be constrained by stringent policies and guidelines, and should be encouraged to experiment with new ideas in order to accomplish their duties in a novel and creative way. 

4. Faith in the organization’s culture

Culture is closely related to the definition of employee engagement. Engaged employees approve of and are aligned with a company’s culture, which makes them strong advocates for the organization. Apart from gainful employment that results in fair compensation, employees go the extra mile because they support their employer’s culture and want to see it thrive.  

Learn More: Employee Satisfaction Questionnaire: 50 Mandatory Questions

Types of employee engagement you will observe among the workforce 

Based on the classification of types of employee engagement, a worker can be: 

1. Very engaged: Highly engaged or actively engaged employees possess a largely positive impression of their workplace. When workers feel attached to their teams, and their place of employment, and also have favorable views regarding the business, they will want to carry on and invest in additional effort to guarantee the continued success of the organization. These "brand or corporate reputation evangelists" promote their businesses to friends and family. They urge everyone around them to perform their best. 
2. Somewhat engaged: Employees who are categorized as somewhat engaged or partially engaged workers have a moderately positive impression of their organization. They appreciate their company but also see areas for development. These individuals are less inclined to seek additional responsibilities and may perform poorly because some aspect of the organization, or their position or role, prevents them from being fully invested. 
3. Barely engaged or neutral: Employees who are not entirely engaged feel indifferent about their workplace. Typically, they are devoid of any passion for their tasks/roles, and will do as little as possible to get by. There is a substantial possibility of employee turnover among individuals who are just barely interested in their professions. 
4. Disengaged: Disengaged workers have a poor opinion about their workplace. They don’t relate to or connect with the organization's mission, goals, and its future prospects. They exhibit a lack of commitment to their jobs and responsibilities. It is essential to identify and deal with disengaged workers so that their unfavorable opinions do not affect the productivity of many other employees. 
5. Highly disengaged: Actively disengaged employees are a step over disengaged workers. Not only are such individuals highly unproductive, they also hinder the work of other committed workers. Their negative temper may produce a toxic and inhospitable work environment, and they turn into a liability for the organization. 

Factors Influencing Employee Engagement  

Several things can influence engagement – where an employee works, their immediate community or the facilities available to them in the office, the commute, their role, compensation, etc.. Broadly, employee engagement comes down to the following three make-or-break factors: 

1. Who comprises the management, and what is their leadership style?

According to a Gallup poll, managers are responsible for around 70% of the difference in employee engagement levels across business units. This indicates that management is one of the most important determinants of employee engagement. 

A responsible and competent leader will foster a meaningful and healthy connection with the team, inspire them, encourage their ideas, establish a system of shared responsibility, and encourage open communication. By choosing the ideal manager for your organization, you may increase employee engagement and workforce productivity. 

2. How much is the employee getting paid, and are they frequently recognized?

Rewards constitute one of the most important employee engagement factors. When employees are recognized for their efforts, they are driven to work more and accomplish more. Likewise, rewarding teams promotes collaboration and teamwork. 

Therefore, if you want your workers to be involved, you should create a recognition program that represents the ethos, values, and objectives of your organization. It may be anything, from "Employee of the Month" awards to a simple "Thank you for your contribution" gift card to free coffee after work. All of this should be complementary to fair and competitive pay.  

3. Do employees have ample opportunities to grow?

If your workers see that you make little effort to help them improve and build on their core skills, their productivity will suffer. This results in workers who are disengaged, waiting for an opportunity to quit. 

There are many ways in which you may assist your employees in acquiring new skills and competencies. Providing training programs, updated library resources, professional certifications, and opportunities to participate in conferences are a few examples. Additionally, you may give them new tasks and duties that challenge them, from out of their comfort zone, enabling them to acquire new skills. 

Learn More: Employee Experience Strategy: Definition, Advantages, Steps To Build, Best Practices

The Importance of Employee Engagement 

Employee engagement is characterized by dedication and zeal. 

Engaged workers view the organization in its entirety and appreciate its purpose, and role. This results in improved decision-making on a daily basis. Businesses with engaged staff outperform their rivals. They have larger profits per share and also recover from downturns and financial setbacks better. Engagement also has a significant impact on innovation in a company. 

Additionally, employee expectations have changed dramatically. "Job-for-lifers" are far less prevalent than "mobile professional careers." Each year, employee turnover costs businesses millions of dollars. Retaining exceptional talent is much more challenging than in the past. A company with a successful employee engagement plan that includes programs, ideas, and efforts to inspire and motivate the workforce is much more likely to keep its best performers, recruit new talent, and boost its overall performance. 

The significance of employee engagement may be broken down into four primary motivations: 

1. Engaged workers drive profits for the organization: Prioritizing employee engagement may not only save you money, it can also boost your revenues. Investing in your workforce will reap benefits in the long term. In contrast, disengaged workers cost businesses revenue. Annually, employee disengagement damages the global economy by $7 trillion in lost output. 
2. Without employee engagement, productivity dips: Gallup's meta-analysis found that organizations with greater degrees of employee engagement experienced a 21% gain in organizational output. Engaged employees believe in the larger mission statement of the organization and want to make a real difference. Consequently, they are often the most productive employees. 
3. It is easier to retain engaged employees, saving HR costs: Employees who are engaged are less inclined to seek employment elsewhere. Once you've gone through the difficulty of acquiring a fantastic worker, the last thing you want is to have to start again because they've moved on to another job. Engagement is the simplest and smartest method to prevent this from happening. 
4. High engagement is an indicator of overall success and fulfilment: Engagement is a measure of accomplishment. This is not necessarily only commercial success. Engagement is often the outcome of individual or team wins. In other words, employees are motivated not because they are productive or nice to deal with, but rather because they genuinely believe their job is meaningful. 

Learn More: 80 Employee Engagement Ideas to Boost Company Morale  

The significance of employee engagement extends well beyond the individual employee, impacting all facets of an organization, including customers, colleagues, and supervisors. Remember, attitude is all-pervasive, and enthusiastic employees enhance the experience for everyone involved. 

Employee involvement is not just about preventing undesirable consequences, but also about creating quality outcomes. Engaged employees enjoy greater overall health, establish deeper relationships with coworkers and customers, immerse themselves in their job, and find delight in the office's day-to-day successes.

Let us discuss these benefits in greater detail.  

14 Benefits of Employee Engagement  

Businesses that invest in employee engagement are able to: 

1. Make employees happy and productive

To encourage workers, highly engaged organizations do not need to rely on peer pressure, dismissal, or other high-stress behaviors. Instead, these companies boost success via employee appreciation, one-on-one meetings, and 360-degree feedback. Instead of worrying about dealing with intimidating managers, employees are happy and eager to work.  

Employee engagement nurtures enthusiasm for going to work. These employees regard barriers as opportunities to conquer rather than hardships to bear. Committed team members consider their teammates and leaders as partners and collaborators. 

2. Improve the customer experience (CX)

People that are enthusiastic about their profession are often the most effective at interacting with clients. Highly engaged individuals are more likely to go the extra mile to help customers, which results in increased productivity, a happy and high-performing team that puts customers first. In other words, when clients interact with engaged personnel, they have a superior experience. 

3. Reduce stress and burnout

Workplace stress is often a lot easier to handle for engaged individuals and may even serve as a motivator. Engaged employees are often more conscious and will notice if their stress levels exceed a healthy threshold. Additionally, they are more likely to seek help from supervisors and peers when necessary. 

4. Boost productivity

Similar to any other business, maximizing employee productivity must be your primary goal. Improving employee engagement can therefore be the first step in developing a productive workforce. Employees that are engaged cherish their work and find it meaningful. A motivated team will work harder, more quickly, and with more passion. 

5. Reduce absenteeism

A few misses are acceptable, such as for illness or unexpected circumstances. However, persistent absenteeism may be the consequence of discontent and disengagement. Increased absences hinder an employee's performance and production. In turn, this impacts the company's bottom line. Absenteeism can be reduced by providing workers with a healthy work-life balance and taking other steps to improve employee engagement.

6. Avoid presenteeism  

Presenteeism is the wasted productivity that happens when individuals are physically present at work but are not fully working. It puts workers in a negative spiral in which their difficulties lead to poor production, and low output produces greater concern. Unlike absenteeism, the indicators of presenteeism are not glaring; therefore, it is often overlooked. Measuring employee engagement may aid in identifying whether a team is underperforming and guide you in the right direction toward enhancing work experience. 

7. Minimize attrition

It is difficult for companies to produce their best work when employees are constantly exiting the company. When long-term workers retire, they carry with them significant knowledge and expertise. In addition, training new employees requires a substantial commitment of resources, energy, and funds. An employee who is engaged, satisfied, and committed to their tasks is much less likely to quit. 

8. Build a strong employer brand

A vibrant and robust employer brand is crucial to a company's success, and it begins with employee engagement. A motivated workforce is more willing to speak positively about their company, and in the current job market, this advocacy/endorsement is more valuable than anything else the company does to attract talent. In fact, engaged organizations are often lauded publicly on job search websites such as Glassdoor and on social media platforms. 

9. Achieve a better quality of work

Engaged employees usually put forth their best effort when carrying out a task. They perform every task with the same level of diligence and accuracy. They continuously develop fresh ideas, gain knowledge from mentors, and collaborate within teams. In addition, they seek to improve their abilities by taking courses and attending seminars, etc. 

10. Energize the work environment and the culture of the workplace

Highly engaged workers bring enthusiasm and excitement to the workplace. Their ambition and energy inspires others to complete their tasks well. These employees are far more engaged in accepting challenges and engaging in activities. Actively disengaged individuals, on the other hand, work actively to undermine the work environment and bring the overall energy and morale of the team down.

11. Drive innovation  

It is well-established that engaged individuals are better workers and add enthusiasm and excitement to their work, which often results in workplace innovation. As highly engaged individuals have a sense of pride and responsibility for, and towards their organizations, they often consider new ways to improve self-performance as well as teamwork.  

Companies such as Google, Apple, Microsoft, and Netflix, that are known for their innovation, invest so much effort and money in guaranteeing transnational employee engagement because it allows them to stay on top, in their respective sectors. 

12. Simplify organizational change

Change is unavoidable in any business, but its implementation does not have to be disruptive or solely top-down. Your workforce is more receptive to new ideas when it is presented honestly, when employees can express their opinions and concerns, and when they are listened to. By creating a culture that places a premium on employee engagement an organization tells workers that individuals and inclusivity are vital to the transformation process. 

13. Empower workers to take ownership and make autonomous decisions

Engaged employees, generally,  tend to take the initiative. Enthusiastic individuals aspire towards enhancing their own and their organization's performance. Even without explicit directives, these individuals propose answers to problems, create novel systems and techniques, and put in maximum effort. A self-modulated working style is among the most important advantages of employee engagement for managers. Engaged workers are naturally entrepreneurial, within the ambit of their companies. Their passion for work inspires these colleagues to flourish. 

14. Prevent accidents and errors in the workplace

Engaged workers pay better attention to their physical environment and take precautions to safeguard colleagues. For example, a conscientious colleague may identify possible hazards in the office space, and provide remedies, as well as politely remind teammates to adhere to a safety routine.  

In contrast, a disengaged worker may lack the focus and energy required to identify and eliminate workplace dangers. Engaged employees think about the long-term well-being of their coworkers and the organization, and are, therefore, more likely to notice and report any threats. 

8 Key Employee Engagement Trends & Statistics 

Here are the critical themes and numbers you need to know to truly comprehend the meaning and relevance of employee engagement in HR: 

1. A positive EX drives 16x greater levels of employee engagement

Workers demand trust, social cohesiveness, and a sense of purpose. Organizations may provide an exceptional employee experience (EX) by addressing these demands and emotions.  According to a study conducted by McKinsey, workers who report a great employee experience are 16 times more engaged and 8 times more likely to want to remain with a company than those who have a poor employee experience. 

Learn More: How Is Employee Engagement Different From Employee Experience? 

2. Non-financial factors drive up to 55% of employee engagement

According to McKinsey, close to 55% of employee engagement is influenced by non-financial recognition, making it the most important determinant of employee experience. This understanding is consistent with the company's findings that an employee's choice to leave is often influenced by a lack of appreciation from the business or its management. 

3. 65% of employees are rethinking the role of work in their life after the pandemic

The COVID-19 pandemic has served as a catalyst for the elevation of individual purpose and beliefs. In a study of more than 3,500 workers conducted by Gartner in October 2021, 65% of respondents said that the pandemic had caused them to reconsider the role that work should play in their lives. 56% said that it inspired them to offer service to society. This necessitates introspection over whether workers feel appreciated in their job or merely complete tasks and create value for the advantage of others. Dissatisfaction with the answer to this, increases employees' propensity to quit their jobs. 

4. 42% of HR leaders view the “future of work” as a top priority

The phrase "future of work" is inextricably linked to a remote as well as hybrid workforce. Despite the fact that this transition represents a seismic shift for many organizations, it is just a piece of the puzzle. Workforce planning, which includes employee engagement, is important to a future of work program and is a key HR leader priority. Gartner also discovered that 43% of organizations lack a specific future of work gameplan. 

5. It takes a >20% pay raise to lure employees away from an engaging manager 

Gallup has shown that disengaged employees have the greatest likelihood of quitting, even during times such as the Great Resignation. It requires over 20% salary increase to entice the majority of workers from a supervisor who connects with them and almost nothing to entice the majority of disengaged employees. High-caliber managers who motivate and encourage their workforce are an excellent moat for keeping their best employees. 

6. Disengagement costs the global economy $7.8 trillion

As per Gallup's State of the Global Workplace: 2022 Report, employees who are not engaged or actively disengaged cost the global economy $7.8 trillion in lost output. This represents 11% of the global GDP. In 2021, 21% of the world's workforce was engaged in their jobs. Although this is a one percentage point rise from 2020, we have not yet returned to our 2019 high of 22%. Over the previous decade, employee engagement has progressively increased, but the pandemic has halted this development. 

7. Companies with high engagement unlock 18% higher productivity

Establishing a highly engaged organization takes many years of planning, commitment, and work. But the outcomes justify the effort. Gallup's research of 112,312 business units revealed that teams scoring in the top quartile for employee engagement had 18% greater productivity (sales), 23% enhanced profitability, as well as 10% higher customer loyalty/engagement than teams scoring in the bottom quartile. 

8. 16% of US workers were actively disengaged in 2021

In 2021, for the first time in almost a decade, the proportion of engaged employees in the United States decreased. Using a random group of 57,022 full- as well as part-time workers collected throughout the year, 34% of employees were actively interested in their job, while 16% were actively disengaged. This contrasts to 36% engagement and 14% disengagement in 2020, a year that saw extraordinary highs and lows.  

5 Best Practices to Ensure Good Employee Engagement  

Employee engagement in human resource management (HRM) has always been a top priority. To achieve high levels of employee engagement, HR professionals can follow these best practices: 

1. Measure engagement using surveys and tracking key metrics

Measuring existing levels of employee engagement may help determine what's working and where improvements are needed. Regardless of the nature of your survey, it is essential to define key criteria for measuring existing levels of participation; doing so will help you uncover opportunities and strengths. Employee Net Promoter Score or eNPS is one of the most vital metrics to measure in this regard. 

2. Ensure the management and leadership invest in employee engagement and EX 

If engagement is not a priority for executives, workers will not feel invested in the organization's vision or objectives. Manager involvement is essential for ensuring high levels of engagement. Managers are the ones that interact with all employees on a daily basis and have the most influence on business culture. They are in the greatest position to track engagement and resolve significant points of friction. 

3. Emphasize a consistent set of values

The core principles of your organization should describe what actually is important to your workforce and the ideas you aim to preserve as you grow. Employees must have a feeling that they belong with your company in order to be fully engaged, and the core values will help with this. 

4. Provide opportunities for personal and professional growth

One of the most effective ways to maintain employee engagement and motivation is to provide possibilities for advancement and changing jobs within the organization. Similar to assisting workers in developing career pathways, promotion from within will encourage individuals to tackle new responsibilities in line with their roles and remain engaged at work. 

5. Reimagine the workplace and office floor

Cubicles are no longer preferred or common in the modern world of work. Siloed working impedes interaction and cooperation, two crucial factors that enhance employee engagement in the workplace. Redesign your office layout so that colleagues may interact with one another more often. 

Key Takeaways

Engaged employees are more productive, they are healthier, and they stay with your company for a longer time. By understanding the meaning of employee engagement and following these five best practices, you can achieve greater levels of employee engagement in the workplace.  

A cutting-edge, cloud-based HR tool can help you measure employee engagement and improve workplace experiences. Ask for a Darwinbox demo to discover how!