6 Key Benefits of Employee Engagement That Drive Success

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 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. 

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. 

How can having a purpose improve employee engagement? 

Most of us are familiar with the standard HR theories and recruiter case studies, so we thought we’d try a different angle this time. How about looking at employee engagement from an outsider’s lens – someone not connected with the industry or space. Motivational speaker and author Simon Sinek’s works and talks provided plenty of grist. 

‍Simon’s runaway best-seller START WITH WHY tries to deal with the issue in its own way and lands some powerful learnings. 

According to Sinek, successful people and organizations share something common between them: The manner in which they approach their work. This manner or technique, Sinek says, is the exact opposite of how the majority of us go about our life. 

In his TED talk, Simon draws three concentric circles, calls the structure the ‘Golden Circle’, and then writes WHY, HOW, and WHAT starting from the innermost circle out. This is, WHY in the center, and WHAT in the outermost ring. 

Simon says that most people in most organizations start from the outermost ring. 

This majority of organizations know WHAT they are doing – such as testing a code or ticking off sales targets – perfectly well. Some (not too many) out of them also know HOW they are doing it, in other words, what their differentiated value proposition or USP is. 

However, very few people in an organization know WHY they do what they do. 

Simon is quick to distinguish that WHY from the normal ‘Why’ that we tend to reel off in our PPT presentations, such as profits and growth (from organizational POV) or salaries and bonuses (from the employee POV). 

Sinek’s WHY is, simply put, PURPOSE. 

The purpose is the big reason any organization or team exists. It is, interestingly, also why the world cares – or doesn’t care - about the team’s work. 

A PWC research shows how a defined organizational purpose made their people more motivated and passionate about work. 

Inspired leaders and organizations take the route that starts from purpose outwards. They always start with the WHY. Apple, for example, will not say that they make great computers like some other manufacturer as Hewlett-Packard might. 

Apple will tell you that what they really do is ‘Think Different’ – that nothing makes them happier than making technology simple and joyous to experience. They just happen to make computers which, as a result of the nature of their WHY, automatically translates into awesomeness. 

And that is what actually excites a customer, who is frankly tired of the WHATs and the HOWs given that all brands roughly sport the same core technology, give or take some customizations. 

The Golden Circle is compared with the human brain which displays a similar concentric ring-like structure when its cross-section is viewed from the top. 

While the outermost circle (the WHAT) corresponds with the rational side of our personality, the innermost circle (the WHY) matches our emotional side. The part that controls feelings. The part we are usually hard put to explain rationally, but are most likely to follow when it comes to making decisions that really matter to us. 

Apple’s customers, for instance, often find it difficult to explain their obsession with the brand to someone who isn’t an Apple loyal. They are happy to simply mumble, “Oh I don’t know, it just felt right.” There’s no greater example of successful passion transfer than that. Apple has been able to make people buy into their ‘belief’. The moment that happens, buying into the product turns into a formality. 

The organizational context of purpose 

To understand the purpose from the organizational perspective, let’s place the leadership or founder in the role of the computer maker, and let’s make the employee the customer. The former must start with the WHY or the purpose. Remember the goal is to sell people what you believe – not your product (the latter in this case being the company). The goal is not to hire people who are looking for a salary, but who raises a thumbs-up sign when you are reading out your vision statement. 

Of course, the assumption here is that the leadership has a strong conviction in its big business objective to start with. After all, it’s only when you believe in something, will you be able to attract a worker who believes in the same thing. 

When a ‘motivated employee’ does happen, it’ll be easy to spot him or her. When a worker works from the heart – and not just for the paycheck – they achieve better productivity and display organizational citizenship behavior. 

As for the company,  it will have finally laid its hands on the holy grail of the business world: The engaged employee. It is important for organizations to understand that this engaged worker isn’t doing all this for the leader or founder, even if their purposes match. The evolutionary history of prioritizing self-preservation has made living beings self-servient at a visceral level. 

At the end of the day, an engaged employee is engaged for one simple reason: Because their sense of who they are, and what they stand for, has finally found a vent. 

They are now convinced that they will now go on to make great products and services in collusion with the leadership as a synergized outfit is merely a corollary.  So while building a culture of trust & positivity, ensuring work-life balance and syncing roles with talent all play critical roles in their own way. The key step to engagement at the workplace - as we can see - is to make people FEEL, not just analyzeyour grand journey. 

Organizations that focus on engagement see increased productivity, retention, and profitability. With a platform like Empuls, businesses can drive engagement by fostering transparent communication, peer recognition, rewards, and feedback mechanisms—all of which contribute to happier and more productive employees. With Empuls, you can: 

• Track the adoption and alignment with core values via reports on values-based recognition. 
• Monitor active groups and discussion threads to understand employee sentiments and improve communication and collaboration. 
• Gauge what people think about culture using Empuls surveys. Identify and fix issues before they affect culture. 
• Assess different aspects of culture, such as DEI, with measurable insights and foster a more inclusive workplace. 

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. 

Conclusion 

Employee engagement isn’t just a buzzword—it’s a business necessity. Companies with engaged employees experience higher productivity, better retention, and increased profitability. By fostering a purpose-driven culture and ensuring employees feel valued, businesses can unlock their full potential. Prioritizing engagement today leads to long-term success and a thriving workforce. 

Now that you know the importance of employee engagement, it’s time to take action. Empuls makes it easy to build a thriving workplace culture through continuous recognition, rewards, and meaningful engagement initiatives. Want to see how Empuls can help your organization? Book a demo today! 

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