Last updated on March 7, 2024 at 10:55 am

Employee engagement has been a workplace buzzword for awhile. But over the last few years, we’ve seen sharp declines in engagement. We suspect this is because most companies don’t understand what really drives company engagement (hint: it’s not beer fridges). So, why is employee engagement important? 

After a global pandemic, supply chain crisis, civil unrest, rising inflation, mass layoffs—the list goes on—employees have started to check their priorities. Engaging employees is about so much more than employees having fun “perks” at their workplace. It’s about values, purpose, wellbeing, and so on. And whether or not companies start getting this right will dictate what companies will thrive or fail.

What Does an Engaged Employee Really Look Like?

To truly understand why we need to care about engagement, we have to define it. But we tend to get a lot wrong about employee engagement. One of the biggest incorrect assumptions we make is that an engaged employee is automatically productive and high-performing. We assume that engagement equals performance, therefore making engagement important.

But not so fast!

While there is a lot of overlap, they aren’t one and the same. The truth is, employee engagement measures an employee’s commitment and focus at work. It doesn’t mean they are amazing at their job or a team player or even satisfied at work.

The reason we are so confused about engagement is that it is correlated with a variety of KPIs. Gallup has found connections between high worker engagement measures like retention, productivity, cost savings, increased safety, and more. And that’s why it is so important. 

But if we assume engagement is a simple, single-faceted metric, we will struggle to improve it. If we don’t define it correctly and understand what drives engagement, we won’t get anywhere. Unfortunately, most companies are there. They know improving engagement is important but don’t really know how.

Let’s dive in.

Does Employee Engagement Really Make a Difference?

This might all seem like a big undertaking. And it is. But it’s worth it.

Before we dive into why employee engagement is important in 2023, let’s talk about it more generally. Does focusing on employee engagement truly have a positive impact on your company?

The short answer is, yes.

Gallup research has found that companies with higher employee engagement rates see:

• 81% less absenteeism
• Decreased turnover (18% less for high turnover companies and 43% less at low turnover companies)
• Improved safety (58% fewer patient safety incidents and 64% fewer safety accidents)
• 10% higher customer loyalty
• 28% less left
• 18% more productivity
• 23% higher profitability

So, not only are employees more likely to stay at your company longer, they are more likely to perform at a higher level. But that’s not always the case. You don’t just want to make your workplace more fun and a place employees want to work—although that’s important. But you also need to focus on training, development, culture, and the like. That’s how you move the needle on performance.

Why Is Employee Engagement Important Right Now

We can agree that engagement is important overall, but why is it more important than ever in 2023?

As we know, employee engagement is declining. So, even though we know it matters to the success of our organizations, engagement is only getting worse. This is a red flag to us that our companies aren’t focusing on the underlying factors that determine if employees are engaged. That means we aren’t giving enough attention to:

• Workplace culture 
• Psychological safety and generally safe work environments
• Employee experience, including digital employee experience
• Training, development, and connecting roles to greater meaning and purpose

If we want to continue to retain talent and help those employees continue to improve and become better at their roles, we have to focus on engagement and everything that goes into it.

But, instead, we’re seeing mass layoffs. Poor onboarding experiences. Insufficient time off and benefits to support our exhausted and burnt out frontline workers. Financial pressures with inflation and wage increases not keeping pace with the market.

In short, we aren’t creating human-oriented programs to support the people who work for us. Our employees are noticing, and they aren’t willing to put up with it. Hence, the quiet quitting phenomenon.

How Can You Improve Employee Engagement?

To improve engagement, we have to shift our thinking. Here are three critical areas we can improve.

Consider the Entire Workforce.

The biggest mistake we see companies making is creating engagement programs that only apply to office workers. 

Why is this a fatal error?

Because 80% of the global workforce works on the frontline and not in offices. If you’re only trying to move the needle for 20% of the workforce, then you won’t see much change in overall engagement levels. We need to invest in strategies that engage employees wherever they work.

This might explain why companies are trying to force employees back to the office. We’ve invested too much in channels and strategies that are optimal for someone at a desk in a corporate office. And we don’t know how to engage an employee that isn’t physically present.

People Have Depth. Engagement Programs Should Too.

The second problem we see is that companies miss the mark on what actually engages someone. Too many engagement programs are focused on surface level things or hone in on forcing office “fun.”

Instead of ping pong and kegs, why not learning and development? Instead of just public recognition, why not recognition and more responsibility? 

Employees want to feel valued and respected. They want to feel like their work means something. They want work to be deeper.

Here’s how to fix it: don’t assume what employees might want. Ask them what they need.

Treat Employees Like the Adults They Are.

What’s one way to disengage an employee?

Treating them like children. 

You might be reading that and think “that’s not me!” But think about how you communicate bad news or a crisis. Do you show your employees trust? Are you truly transparent with them or do you assume they can’t handle the full truth?

Unfortunately for corporations, employees are adults and they see right through you. They might not know what you’re hiding, but they know when they aren’t being trusted with the full truth. 

To fix this, start focusing on your executive communication strategy and internal communication in general.

What Has the Biggest Impact on Employee Engagement?

We’ve mentioned a lot of ways to improve employee engagement, but what will have the biggest ROI? 

If you can do nothing else this year, focus on the employee experience. If every department considered EX more, you could make tremendous improvements to engagement. Here’s what that might look like:

• Human Resources could focus on improving the onboarding experience. We know that onboarding is a big opportunity at most companies, but it’s also your first impression with an employee. Getting those first days and weeks right and properly training your new workers completely sets the tone for their tenure at your company.
• IT could focus on streamlining the digital employee experience. If IT audits your tools and systems to ensure you’re using the right ones and creating hubs for resources and tools, that can make it easier for employees to find answers, tools, and information.
• Internal communication should focus on auditing their internal comms strategy and channels to ensure they are getting the right information out at the right time to all groups.
• Executive Leadership should focus on trust and transparency. The leadership team really sets a lot of the tone. They need to be more visible and more transparent. Leaders also need to lead by example and take more accountability if they want to see the same from their teams.

Even though improving EX and engagement is a big undertaking, it can be broken down into smaller objectives that can be owned by different groups across your business.

About the Author

Sydney Lauro is the Demand Generation Manager for theEMPLOYEEapp. Prior to joining the team at theEMPLOYEEapp, Sydney worked in internal communications for Chipotle Mexican Grill. She users her internal comms expertise and passion for improving communication and the employee experience to create content and share best practices to help other communications professionals.

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