Share:

Matt Tenney, Contributor

Employee engagement may be one of the most written-about business topics of the last few years. And it seems more important than ever as research indicates that the percentage of engaged workers in the U.S. declined in 2021—for the first year in more than a decade. 

A high level of employee engagement is essential for a healthy bottom line and long-term financial stability, but it can also lead to a variety of other positive outcomes that can benefit not just the company, but employees and customers as well.

The advantages of employee engagement include improved retention, performance, and customer service, all of which boost profitability. Because engaged employees believe in the work they are doing, engagement also improves their overall job satisfaction and leads to better employee well-being.

In this article, we will define employee engagement and discuss the many advantages it holds for both organizations and their employees.

Employee Engagement Defined

Engagement is the most critical metric for organizations and is directly influenced by employee perceptions of the organization.

Employee engagement can best be defined as an employee’s emotional commitment to their organization and its goals and alignment with its values. This emotional commitment indicates the employee cares about their work, is dedicated to the organization, and their attitudes and behaviors are aligned with organizational core values. 

Engaged employees are dedicated to the success of their organization and aren’t just in it for the paycheck.

Engagement is a driver of organizational success and is essential for high rates of retention, attracting top talent, fostering loyalty, boosting customer satisfaction, and improving organizational performance and stakeholder value.

Having clearly defined performance expectations, offering opportunities for professional development, providing the autonomy needed to work independently, ensuring work is performed in an inclusive environment, and giving regular recognition and feedback are essential for employee engagement.

Additionally, working in an environment where employees feel that they are cared for and valued, where they have a voice in decision-making and process improvement, and where collaboration and teamwork are encouraged are also essential elements for high levels of employee engagement.

These things unite employees with a shared sense of purpose and dedication to the organization’s mission and vision and make them feel that the work they do is vital to the organization’s success. 

Retention

When employees join a company, they do so with certain expectations about how the job will help them meet their professional and personal needs. When organizations don’t provide what employees need to meet these needs, they will likely seek out other opportunities.

High rates of turnover pose a huge threat to a company’s success. 

The frequent and regular loss of employees causes significant financial losses for companies due to the cost of replacing employees and loss of efficiency. It is estimated that employers spend around 33% of a worker’s annual salary to replace just one employee.

In addition to the financial losses associated with turnover, a high level of turnover can be detrimental to morale, hurt top talent recruitment efforts, and hurt relationships with customers. It can also cause issues with employee culture.

Helping employees meet their needs boosts engagement and ultimately reduces turnover, improving retention. Maintaining high retention rates can boost a company’s reputation and make it more attractive to talented job seekers.

Performance

Research indicates that employees actively seek meaning through their work. If companies do not make authentic efforts to provide a sense of meaning, employees are likely to feel less engaged, actively disengaged, or, ultimately, they will quit. 

Engaged employees who find meaning in their work are more invested in the company’s mission and vision and demonstrate alignment with organizational core values. 

When employees can see a link between their success and the organization’s success, this motivates them to perform at their best and makes them more productive. This can boost the overall productivity of the team.

Engaged employees are able to connect the dots between their individual performance and the success of the company, making them more aware of how their performance directly impacts the performance of the organization as a whole.

As we know, increased productivity leads to increased profitability. Organizations with high levels of employee engagement are 21% more profitable than organizations with low levels of engagement.

Customer Service

There’s an inextricable link between employee engagement and customer satisfaction. 

If your employees are not engaged with the work they do, they will not be satisfied with their jobs. If employees aren’t satisfied, customers won’t be either. 

When leaders utilize business strategies that foster trust with employees and demonstrate care for their well-being, it improves their engagement with the work they do and makes them better at serving customers.

In an environment of high employee engagement, exceptional customer service becomes the norm. An added bonus that comes along with high employee engagement is customer-focused innovation.

According to Skip Prichard, President & CEO of OCLC, “Customer-focused innovation thrives when a progressive attitude is supported by processes and systems to harvest employee ideas and bring them to fruition.”

Advantages for Employees

One of the leading drivers of employee engagement is whether or not employees feel their leaders care about them and are invested in their well-being.

When employees feel that top leadership cares about them, this increases their engagement. Engaged employees experience more job satisfaction and improved mental and physical well-being.

This benefit for engaged employees provides yet another advantage to companies in that healthier employees are less likely to miss work. 

According to the American Psychological Association, workplace stress costs the U.S. economy over $500 billion annually, and 550 million workdays are lost each year due to job-related stress. By improving employee engagement, organizations can reduce absenteeism by up to 41%

When employees feel like valued members of the organization, they will experience less work-related anxiety and the time they spend at work will be more impactful. Their emotional investment in the organization will make the jobs they do more fulfilling, which can lead to less stress in their personal lives. 


Matt Tenney is an active CEO who aspires to create the best workplace culture 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.