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The Top Benefits of Employee Engagement & Its Importance For Your Team

by Karyn H. Rhodes | SHRM-SCP, SPHR on Feb 7, 2023 8:07:36 AM

If you’re in the same position as many businesses today, employee retention is a growing concern for your organization. You know the issue can impact your business’ growth and bottom line, so finding the right solution is critical.  As you may already know, engagement is one of the best ways to combat attrition by driving satisfaction and loyalty. But just what are all the benefits of employee engagement and why is it so important for your company? Let’s find out.

In this article, we’ll discuss what employee engagement is, why it’s important to your organization, and steps you can take in your workplace to improve engagement. After reading this, you’ll understand the benefits of employee engagement for your company and steps you can take to build buy-in and support.

What is employee engagement?

Employee engagement is the level of enthusiasm and dedication a worker feels towards their job. If you look around your workforce, you should be able to tell which employees are invested by spotting common signs of an engaged team, which include:

  • They are emotionally invested in the company and are motivated to make it better
  • The workers come to work upbeat and with a positive attitude
  • These employees collaborate and are focused on the company’s success versus just their own
  • They are responsible, completing their work on time and as promised
  • Engaged employees take steps to make sure their work is successful and often exceed expectations
  • They are good communicators both with colleagues and management
  • They innovate and think outside the box
  • These employees are easy to work with and cooperative
  • Engaged workers continually seek to improve
  • The employees are able to adapt to change and challenges

As you can see, it’s important to actively invest in employee engagement since all of these behaviors are essential to your business’ success. We’ll explain why next.

Why is employee engagement important?

Currently, only 15% of employees are engaged, and the downsides of such low rates can be significant. While initial drops in efficiency and productivity may not raise any red flags, prolonged low engagement can cause your entire company to suffer. That’s because, over time, an unengaged workforce can lead to increased turnover, higher levels of absenteeism, and even lost revenue. 

While the issue may start small, if it continues, low engagement can negatively impact your workplace culture. When disengagement goes unchecked, meetings can turn into complaint sessions and morale can take a significant hit. In today’s tight labor market, where 88% of job seekers say a healthy culture at work is vital, fostering an environment where employees are happy, motivated, and committed is key.

What are the benefits of employee engagement?

Employee engagement can be critical to your company’s future for a number of reasons. When organizations prioritize engagement, it will show in their team’s behavior, and that can translate into sustained benefits of employee engagement for the organization as a whole. The top 7 are:

  1. Higher productivity: Engaged employees have a reported 22% higher productivity than disengaged workers. Not only does productivity increase profitability, but it also lowers production costs and improves customer service and business relationships.
  2. Better customer service: When employees care about their job and the company, it comes through in the way they treat customers, which drives a 10% increase in loyalty. That’s because a customer that has a good experience with your company is more likely to return.
  3. Lower absenteeism: One of the other benefits of employee engagement is that companies with high engagement can see a 41% reduction in absenteeism, critical since unscheduled absenteeism can cost $3,600 annually for each hourly employee and $2,650 for salaried.
  4. Reduced turnover: Businesses with high employee engagement levels experience 43% less turnover compared to those with low engagement. This can save you the high costs associated with turnover such as recruiting and onboarding new employees; according to SHRM, the average cost per hire is nearly $4,700.
  5. Better overall profitability: Organizations that score in the top 25% on employee experience report double the return on sales compared to organizations in the bottom quartile. And that can be a key driver in your future success since engaged companies grow profits up to three times faster than their competitors.
  6. Improved quality: Engaged employees produce higher quality work. In one study, highly engaged organizations saw 40% fewer quality defects. High quality, in turn, can improve customer retention, build brand trust, and boost ROI.
  7. Increased safety: The last but not least of the benefits of employee engagement is the increase in safety experienced by many companies. Businesses with engaged employees have fewer safety incidents. In fact, they are five times less likely than non-engaged environments to have a safety-related incident. And this can translate into reduced downtime, increased efficiency and productivity, and a better reputation that can positively affect your relationships with investors, partners, customers, and prospective employees.

How can our company start reaping the benefits of employee engagement?

With all of the advantages of employee engagement, it’s clear that improving your levels is critical to your business’ success. If you’re just getting started on a plan to improve engagement, you may be looking for guidance on how to implement employee engagement initiatives within your workplace. 

One option is to start small by soliciting feedback from your team or holding one-on-one meetings with your direct reports to understand areas that need improvement. Alternatively, you may want to hit the ground running right away with tools like employee engagement software. Whatever pace is right for your business, get started by learning more about employee engagement strategies your business can implement to start improving your team’s engagement.


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