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As a business or HR leader, can you describe your employees as motivated, productive, and committed? Do they have the guidance, resources, and incentives to perform optimally? While most employees have opined that they would contemplate quitting if a suitable opportunity arose, as switching jobs is not solely driven by salary considerations, surprisingly, 71% of the individuals from Generation Z have shared that they would be willing to stay if their job was more meaningful. 

There are critical questions related to employee engagement that need to be asked; moreover, leaders need to understand the importance of employee engagement to drive productivity.

Let's look at some crucial employee engagement statistics before going further:

↠ According to Gallup’s recent survey, employees who are “not engaged” (51%) are people who are no longer attached to their work and company and will leave their company once they find a slightly better job offer.

↠ While “actively disengaged” (13%) employees have miserable work experiences and spread their unhappiness to their colleagues. The aggregate data shows that most employees are not engaged (64%). Currently, only 36% of employees are engaged.

↠ Though only 13% of employees are actively disengaged, having them is quite expensive. Gallup’s State of the American Workplace report states that “actively disengaged employees cost the U.S. $483 billion to $605 billion each year in lost productivity.”

That’s too much money for an economy to lose in one year! At a company level, Gallup states that the cost of having employees who are not engaged is the equivalent of 18% of their annual salary.

Let’s make some simple calculations—say a company has 1,000 employees with an average salary of $60,000 each. If disengagement is at 64%, then the cost of their disengagement would be approximately $6.9 million. A single company can lose this amount of money when employees aren’t engaged.

So, companies must embrace employee engagement as an essential factor for longevity and business success.

Since most employees are not engaged, leaders need to know what it takes to keep employees engaged, i.e., the secret sauce. But first, let’s understand what are the benefits of keeping employees engaged.

‍Why is Employee Engagement Important: 6 Benefits of Engaged Employees to a Company

When companies strive to keep employees engaged, they experience many benefits, such as:

1. Reduced absenteeism

Companies suffer from lost productivity when employees don’t show up to work. Although some employees may have unplanned events that cause them to miss work, such as serious illnesses, accidents, or other personal emergencies, it could be a sign of low engagement when they make it a habit to miss work intentionally.

Employees who are not engaged are more likely to miss work simply because their motivation is low. A benefit of keeping employees engaged is that companies realize a 41% reduction in absenteeism and a 17% increase in productivity.

2. Better employee retention

Retaining talented and motivated employees is critical for a company’s overall success. When employees are not engaged, they start exploring other job options, which causes a high turnover rate.

The direct and indirect turnover costs can be crippling for any business, such as, but not limited to, costs of hiring and training a new employee. Gallup estimates that the cost of replacing one employee is one-half to two times the employee’s annual salary.

However, when employees are engaged, they show commitment and are more likely to stay with their organization.

3. Greater profitability

One of the primary goals for many companies is to make profits. As discussed earlier, engaged employees show dedication to work, make meaningful contributions, pay attention to customers’ needs, and offer innovative solutions.

These behaviors of highly engaged business units result in 21% greater profitability.

4. Improved employee morale

Employee engagement affects employee morale, meaning that engaged employees demonstrate high morale—and vice versa.

Where there is low engagement, employees usually show signs of low morale, which include avoiding new projects, producing low-quality work, reducing communication with teammates, hoarding valuable information, or showing pessimism about the company’s objectives and criticism toward their leaders.

However, engaged employees do not exhibit such signs since they are committed to producing excellent results.

5. Better customer ratings

Engaged employees tend to show great concern for their companies’ customers by offering them quality service.

As a result of their proactive and innovative tendencies, highly engaged teams experience a 10% increase in customer ratings. Due to high customer ratings, companies also enjoy a 20% increase in sales.

6. Increased brand awareness

Usually, employees tend to talk about their company to everyone—their friends, family, professional network, and social media.

If you have engaged employees, they will demonstrate their enthusiasm and psychological attachment to your company at all times by talking positively about their employer—without even realizing that they are increasing the awareness of the company’s brand.

As a result, people use those employee reviews when they need to make purchasing decisions or decide whether to work for your company. It’s necessary to keep employees engaged if you care about your company’s brand.

Unlock the Biggest Secret of Engagement to Retain your Top Performers.
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Osasumwen Arigbe, PHR

Osasumwen Arigbe, PHR LinkedIn

Osasu is an HR professional and content writer. She has a Master’s degree in HRM from Georgetown University. She writes about important HR topics, and providing relevant information to her audience.