7 Reasons Why Employee Engagement Matters

Employee engagement isn’t just a passing fad or a nice to do if you can type of initiative. The truth is employee engagement is one of the major contributors to business success. Really? I hear you say. Can it possibly make that much difference? And the simple answer is yes.  Employee engagement will impact on your business’s productivity, profitability and customer satisfaction. So, if you’ve been slow to get on board with employee engagement, then it’s time to give it the priority it deserves. Here are seven reasons why a formal program of employee engagement matters and is an absolute must for every company.

1. Increased Profitability

Employees that are invested in their jobs and employers will outperform their disengaged counterparts. Fact. There’s plenty of research out there that confirms this including a study from Gallup which showed highly engaged teams are 21 percent more profitable. Another Gallup study discovered that businesses with engaged workers have higher earnings per share than those companies with low engagement rates.

Businesses that score highly on employee engagement tend to set clear expectations for their workers and also make sure staff have the tools and resources needed to get the job done. Their employees feel an emotional connection to the organization and are more willing to work hard for collective success.

2. Higher Employee Retention Rates


According to the Bureau of Labour Statistics, the average worker has been with their current employer for 4.2 years. And the average cost of hiring a new employee is estimated to be $4,129 according to the Society for Human Resource Management. You don’t have to be a mathematician to work out that staff turnover can, therefore, be a big business cost. Anything that a company can do to hang on to its workers and reduce these costs has to be good for the bottom line, right? Well, engaged employees tend to stay with the same employer for longer.

Once again there’s plenty of research to back up this claim. Engaged employees have lower turnover rates than their disengaged colleagues, with one study suggesting they are 87 percent less likely to leave.

Those companies that have invested in employee engagement report positive impacts on their recruitment and retention costs. With today’s highly competitive job market in which talent is often in short supply, companies that can hang on to the best performers have an obvious advantage.

3. Reduced Rates Of Absenteeism

Companies with highly engaged workforces report fewer problems with absenteeism. Employees typically take less sick leave and don’t feel the need for duvet days. Instead, they are energized about their jobs and are happy to come to work.

4. Become An Employer Of Choice In Your Industry

employer-brandingYour employment brand is how you are perceived in the job marketplace. It’s driven by the perceptions of current and former employees as well as job seekers. A positive employment brand is golden. Employers of choice – like Google, Apple, Starbucks and Procter and Gamble – can take their pick from the talent pool of candidates. They receive hundreds more job applications than their industry peers. Poorly perceived employers, by contrast, often struggle to recruit and retain candidates. A negative employment brand can have serious consequences and is difficult to change once it’s set in.

It will come as no surprise to learn that the employers of choice are also those that score highly on employee engagement. They see investing in people and employees as being a necessity. Engaged employees are your biggest brand ambassadors and can ensure that you become an employer of choice with your pick of the highest caliber of candidates.

5. Higher Customer Loyalty

In a recent article, Forbes highlighted the un-ignorable link between employee engagement and the customer experience. Forbes cites research, which suggests that 79 percent of employees at companies with above average customer experience are highly engaged in their jobs. By comparison, only 49 percent of employees feel engaged in companies with average or below average customer experience scores.

It’s common sense that employees who are happy and fulfilled in their work provide superior customer service. Not surprisingly, their customers feel a greater sense of loyalty and are more likely to recommend a brand that they perceive has provided outstanding customer service.

6. Safer Work Environment

best-workplaceAnother benefit of employee engagement is that the workplace will become a safer place to work and visit. The statistics tell us that disengaged workers have 49 percent more accidents and 60 percent more errors and defects than their engaged colleagues. By contrast, companies with high rates of engagement experience 48 percent fewer safety incidents. A program of employee engagement, therefore, has the potential to result in a lower incidence of workplace accidents and safety and health incidents.

7. Encourage Innovation And Creativity

Highly engaged workplaces value the individual and encourage and promote a culture of innovation and creativity. Rather than simply going through the motions or just doing the absolute minimum, engaged employees tend to be creative and think about ways they can improve the work that they do. This climate of innovation and continuous development can lead to genuine improvements and real money-saving ideas that impact on the company’s profits.

Employee Engagement Practices

The bottom line to answer why employee engagement matters is that employee engagement is a critical driver for your company’s performance and profitability. Its reach is broad with the effects being felt across all aspects of the business: from staff retention to sickness and absence rates as well as safety performance and customer loyalty.

If you’re looking to develop employee engagement practices for your organization, then check out the MyHub blog for insights and resources on a wide range of related topics. Here’s just a selection of the employee engagement best practice resources available:

Improving Employee Engagement: Why It’s Good For Business And How To Achieve It

Employee Engagement Action Plan: It’s Time For Action

Disengaged Employees: How To Recognize And Deal With This Hidden Issue

Intranet Design: Five Ways To Improve Employee Engagement

The knowledgeable team at MyHub are happy to discuss your employee engagement needs. Our easy to install and use intranet platform will support the delivery of an employee engagement program as well as delivering a whole host of additional business benefits. Find out more today. Contact us for a free demo or a no-obligation 14-day trial.

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