Creating an engaging and happy work environment is no longer just a company perk – it is an integral part of building a successful and productive business. Having a team of highly engaged employees is key to effective collaboration, profitability and growth. But what does it mean to be a “highly engaged employee?” An engaged employee isn’t just a happy or satisfied employee. According to Gallup, engaged employees are “those who are involved in, enthusiastic about and committed to their work or workplace.” Engaged employees come to work every day with passion and purpose. They may work overtime without being asked to, volunteer for projects outside of their role, or advocate on behalf of another employee.
In 2018, Gallup announced that 34% of US workers were fully engaged, the highest engagement level in history. While this is an exciting achievement, that leaves two-thirds of the workforce disengaged – costing US companies $550 billion a year. Building a highly engaged team is beneficial to the success of every business, but what exactly are those benefits?
Benefits of engaged employees
Retain top talent
In today’s competitive job market, companies compete for the best talent in their industry. Retaining top talent is a constant challenge for any company, and simply offering catered lunches or unlimited paid-time-off is not enough. Company culture is important to retaining and attracting talent. Additionally, company loyalty is fleeting. According to a study by IBM, 46% say they would accept a new job opportunity if offered, with millennial workers twice as likely to leave their job even if they weren’t actively looking. Currently, $2.9 million is spent per day by US companies to replace workers. In this day and age, the definition of company loyalty is changing with the younger workforce and companies must try harder to retain good employees. Building a strong company culture and improving employee engagement is critical to keeping employees loyal. According to the same Gallup study, companies with already low-turnover experienced 59% less turnover when focusing on employee engagement, compared to the 24% less turnover for high-turnover organizations. Gallup describes a high-turnover organization as one with 40% annualized turnover while low-turnover is 40% or lower. Turnover rates lower exponentially as companies boost employee engagement. Additionally, 89% of employees would recommend their company as a great place to work if the company focuses on well-being initiatives, which directly helps with recruiting new talent.
Higher quality of work
Psychological safety, defined by Harvard Business School professor Dr. Amy Edmondson, is “a climate in which people are comfortable being (and expressing) themselves.” Having a company culture of psychological safety ensures that employees feel comfortable being their full self. Employees who feel safe are more willing to take risks, experiment, and speak frankly. Employees will then show up to work motivated and put in the effort to do more work. They are enthusiastic and committed, and therefore produce higher quality results. In addition to psychological safety, engagement at work is linked to feelings of support and respect, which reduces work-related stress. Overall, highly engaged employees show a 17% increase in productivity. On the other hand, disengaged workers are unmotivated and do not take responsibility for their work or behavior. Disengaged workers have a higher percentage of accidents, errors and defects, and 16-18% lower productivity and profitability. Therefore, it is important to build a culture of engagement to create a comfortable environment for your employees. Engaged employees will listen and help others connect their work with the overall mission of the organization, therefore producing quality work and inspiring others to do the same.
Increased profitability
Lower turnover, higher productivity, and improved quality of work ultimately boils down to greater profitability. Highly engaged workers show a 21% increase in profitability, with a 40% decrease in absenteeism. For a sales team, engaged employees have a 10% increase in customer ratings and 20% increase in sales. An engaged sales team is more committed to building stronger customer relationships and improving organic growth, therefore achieving better results. An engaged employee who is enthusiastic about their work is more likely to go the extra mile and go beyond expectations. Employee engagement is directly related to customer service because engaged employees will provide better customer experiences. In addition to improved sales, companies save more on hiring and onboarding new employees when they have a higher retention rate. The benefits of highly engaged employees is best explained by Kevin Kruse, the author of Employee Engagement 2.0, in his Engagement-Profit chain:
Engaged employees lead to…
Higher service, quality and productivity, which leads to….
Higher customer satisfaction, which leads to…
Increased sales (from more repeat business and referrals), which leads to…
Higher levels of profit, which leads to…
Higher shareholder returns (i.e., stock price)
Employee engagement isn’t just an abstract feeling – passionate and invested employees directly translates to the health of the business. It isn’t too late to improve employee engagement and better understand the link between employee and customer engagement. Use anonymous polling software to collect honest feedback or provide a safe space for employees to express concerns. Collecting feedback is a great first step towards encouraging employees to be more engaging with the company and to feel like their opinions and work is valuable.
This guest article comes courtesy of Poll Everywhere, a leading business communications platform providing improved employee and audience engagement, powerful analytics, and instant team collaboration as a service.
Originally published Mar 02, 2020, updated Jan 16, 2023
