Matt Tenney, Contributor

While we often talk about the importance of employee engagement and how low engagement can be devastating to overall employee morale and profitability within an organization, it’s important to consider the factors that indicate high levels of engagement in the workplace so that leaders can continue those practices that work to keep engagement levels high. 

Knowing what an engaged employee looks like is important to determine if your engagement strategy is a success. The way we do that is by looking at several key indicators of high engagement in a workplace.

Five indicators of high engagement in a workplace include less absenteeism, higher retention rates, increased productivity as the result of high performance, improved customer service, resulting in more client satisfaction and client retention, and better overall profitability for the organization.

There are many indicators that we can examine to determine how engaged employees are in the work they do, but, in this article, we will focus on these five important indicators of high engagement and how they can make a difference in your organization. 

Low Rate of Absenteeism

Absenteeism is responsible for the loss of a significant amount of revenue yearly. 

According to the World Health Organization (WHO), companies lose around $2,450 per employee per year due to absenteeism. The Centers for Disease Control and Prevention (CDC) says the loss of productivity associated with absenteeism costs U.S. companies $225.8 billion yearly. 

One way high employee engagement helps to reduce absenteeism is due to the fact that engaged employees experience less burnout in their jobs. And employees who like their jobs and are satisfied in their roles are less likely to miss work due to job-related stress.

Organizations that have high employee engagement can see a 41% reduction in absenteeism. This is good for an organization’s bottom line, but it is also good for employees.

Employee engagement benefits employees because it improves job satisfaction, gives their work purpose, makes them feel valued and that their individual contributions are essential to organizational success, and improves their professional and personal well-being.

To quote Naz Beheshti, CEO of Prananaz Corporate Wellness Solutions, “Engaged employees show up every day with passion, purpose, presence, and energy.” This passion not only reduces absenteeism, it improves retention, performance, and profitability.

High Rate of Retention

Organizations with high employee engagement can see lower turnover rates of around 31%

How well your company is engaging employees will be evident not just in your turnover rates, but also in your hiring process. Employees are often brand ambassadors and will share their positive experience working in an organization where they feel valued and engaged in the work they do. 

This will make people want to work for your organization.

Here are some questions to consider when it comes to retention and recruitment: 

  • Are employees referring their friends or family members to work for your company? 
  • Are you recruiting top talent and promoting from within the company to fill job openings?
  • Are you developing succession plans that will ensure future job openings can be filled by strong leaders?
  • How long are employees staying with the company? 

Tenure can be a good indicator of your organization’s engagement levels. If turnover is high and people aren’t staying in their roles for very long, you know you’ve got an engagement problem. 

Increased Productivity

Highly engaged employees are able to connect the dots between the work they do and the organization’s success. Having this sense of purpose will make them more connected to their jobs and better performers.

Engaged employees experience greater job satisfaction, which can lead to a 17% increase in performance.

When employees have a high-performance mindset it boosts an organization’s overall productivity, inspires creativity, and sparks innovation.

When an employee feels like the work they are doing is useful and that the individual role they play is important in helping the company achieve success, this makes them happier and more satisfied in their jobs, which is great for performance and productivity.

They will also share in the company’s vision and feel a sense of loyalty to the organization and pride in what we do, which creates a positive, collaborative work environment and positive outcomes at all levels of the organization. 

More Satisfied Customers

Employees’ behaviors, performance, interactions with co-workers, and how well they serve customers can help you determine how engaged your employees are. 

And while we know that engagement improves employee retention and customer satisfaction, it can also significantly improve customer retention.

The Demand Metric 2013 Employee Engagement Survey revealed just how profound the impact of engagement is on customer retention, with over 80% of customers being retained by organizations with more than 50% employee engagement.

Engaged employees provide better customer service, which leads to a positive customer experience that makes customers more likely to continue doing business with your organization.

Better Profitability

Low employee engagement and disengagement can cost companies around $450-500 billion annually. It is estimated that employers spend around 33% of a worker’s annual salary to replace just one employee.

When engagement boosts retention levels, there will be a resulting improvement in profits due to the savings in costs associated with replacing employees when they leave. Additionally, an increase in performance and productivity will also inevitably lead to increased profitability. 

In fact, having a team of highly engaged employees can lead to a 21% increase in profitability. As Business Leadership Today guest contributor John Spence recently discussed, engaged companies grow profits up to three times faster than their competitors.

Indicators of a Healthy, Highly-Engaged Organization

The benefits of engaged employees have a trickle-down effect throughout the organization.

When employees take pride in the work they do and feel a sense of purpose and motivation, they are better able to serve customers and provide a higher quality of service that is also good for the bottom line.

When you improve these things, it will improve the overall functioning of the organization. You will see better cultural alignment and better communication among employees. 

Employees will benefit by being more satisfied in their jobs because they will have a stronger sense of purpose tied to their jobs, and they will be more interested in developing themselves professionally and improving processes. 

Leaders will notice positive signs in employee behavior when there are high levels of engagement.  

Engaged employees feel more comfortable giving and receiving feedback and interacting with leadership. Being engaged in meaningful work they believe in will help them develop an innovation mindset because they will be invested in the future of the company when they recognize that they play an important role in the company and that the work they do is essential to its success. 

Engaged employees will also experience stronger social relationships with their coworkers, which will foster a more collaborative team environment in which people feel comfortable offering advice or helping each other on projects.

Engaged employees will demonstrate good leadership qualities, informed decision making, more agility and adaptability during times of change, enthusiasm for the work they do, a willingness to “go the extra mile,” and leaders will see more alignment between their personal and professional goals. 


Matt Tenney is the founder of PeopleThriver and The Generous Group, two companies that aspire to create the best workplace cultures in the world.  Matt is also the author of Serve To Be Great: Leadership Lessons from a Prison, a Monastery, and a Boardroom, and The Mindfulness Edge: How to Rewire Your Brain for Leadership and Personal Excellence.  Matt is frequently invited to present keynote speeches at leadership conferences and meetings.  His TEDx Talk has been viewed over 1,000,000 times since January, 2020.

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