As a business or HR leader, can you describe your employees as motivated, productive, and committed to their work? Do they have the guidance, resources, and incentives needed to perform at an optimal level? Are there any compelling reasons for employees to remain employed at your company? These are critical questions related to employee engagement, and leaders need to understand the importance of employee engagement. 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 is an engaged employee and the benefits of keeping employees engaged.
Knowing that only 36% of employees are engaged, I believe you’d like to know the traits an engaged employee displays. An engaged employee is “involved in, enthusiastic about and committed to their work and workplace.” To be more descriptive, an engaged employee is:
This means they go beyond their job description at work. According to an article by the Hays Group, a proactive employee thinks ahead and makes impactful suggestions to their company, such as sharing new ideas and industry trends, making suggestions when identifying problems, or actively helping customers. Once an employee is psychologically detached from their work or company, they would no longer be proactive.
Highly engaged employees display unique behaviors, one of which is accountability. Engaged employees own their work and performance and do not blame others when things don’t go as expected. According to the Culture Advantage Index, you will find that such employees are 95% more likely to be personally invested in achieving company results.
A Harvard Business Review article states that “engagement can be interpreted as a broad indicator of how motivated an employee is at work.” Employees who go above and beyond—doing something outside their job duties, to assist an employee or help a situation—can be described as engaged employees because they are typically intrinsically motivated.
Employees who “commit their time, talent, and energy in adding value to their team and advancing the organization’s initiatives,” can be described as engaged. They are loyal, make impactful work contributions, and actively find ways to solve problems because they care about their company’s overall success.
A PwC research has shown that 77% of CEOs find it difficult to get the innovation skills they need—this makes innovation a top business priority for most CEOs. Innovation gives companies a competitive advantage when entering new or developing markets, allowing them to stay relevant in their industry. If more employees are engaged, they would be more willing to share valuable ideas or solutions with their company and customers. An engaged employee applies their innovative skills because they want their company to stay in business.
When companies strive to keep employees engaged, they experience many benefits, such as:
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.
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.
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.
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.
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.
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.
Now that we’ve described who an engaged employee is and the benefits of keeping employees engaged, we must understand how to engage your employees, i.e., the secret sauce!
Some primary ingredients that contribute to employee engagement in any workplace include:
Culture is a major contributor to employee engagement. For any organization, culture refers to the strongly held and widely shared beliefs, values, and practices that guide everyone’s behaviors. It’s important to remember that “culture is driven from the top down,” and leaders play a significant role in shaping employees’ attitudes toward the company’s culture.
To drive a culture of organizational engagement, you’ll need to provide the training and onboarding that employees require to do their jobs well, help them understand how their duties align with business objectives, and create an environment where employees feel safe sharing their opinions. It’s also important to evaluate and assess the organizational culture in real-time, using pulse surveys. Through pulse surveys, HR leaders can measure employees’ feelings about the company culture while taking proactive actions toward improvement.
Communication is another major contributor to employee engagement. Poor communication in the workplace, sometimes in the form of vague directions from leaders or lack of transparency, often leads to inevitable consequences such as “a delay or failure to complete projects, low morale, missed performance goals, and lost sales.” Leaders can improve employee engagement by being clear, transparent, and consistent in their actions and communication.
For example, if your company is about to undergo a period of significant change, leaders must guide employees through the situation, make them understand how it will impact their roles, and keep them updated during the process.
As described earlier, engaged employees are proactive, committed, enthusiastic, and intrinsically motivated about their work. However, it’s still necessary to provide extrinsic rewards as a form of encouragement. Research has shown that “employee rewards and recognition directly affect employee performance and are a form of powerful feedback.” So, leaders can improve employee engagement—for all employees—by expressing appreciation regularly.
Saying “thank you,” sending gift cards, offering bonuses, or giving shout-outs are some simple ways to recognize employees. When employees feel adequately recognized by their employer, they will be less likely to say they’ll quit.
Employee engagement should be a priority for all business and HR leaders. As we’ve discussed in this article, companies enjoy many benefits when they keep employees engaged. So, it’s necessary to offer employees compelling reasons to do their best work and remain employed at your company.