What is Employee Engagement? And How to Improve It

In today’s work culture, people are prioritising work-life balance when seeking employment. The question of workplace engagement is also a big motivator for employees looking for a new role. This isn’t simply about job satisfaction, but commitment: when employees are engaged, it affects productivity and staff retention, but it's also a key driver for innovation. 

Here we explore what it means to have an engaged workforce, and how you might go about measuring employee engagement. We discuss the challenges employers face in maintaining strong staff involvement with their organisation, and look at employee engagement strategies to help people feel more recognised by, and committed to, their workplace.

What Does Employee Engagement Mean?

Sometimes confused with employee happiness, staff engagement measures how committed employees are emotionally and psychologically to their place of work. An engaged employee actively cares about their work and the company to which they belong.

Engagement manifests as working with a conscientious mindset: rather than focusing just on their own workload and allotted hours, they identify where they can go the extra mile, as they are proud of their contributions and mindful of their whole team’s performance and success.

Often, this comes from employees being aligned with their company’s values.

Why is Employee Engagement Important?

Put simply, when employees are connected and enthusiastic about their work, they tend to perform better. What’s more, engaged employees are more likely to contribute to that development and progress.

Forbes argues that the combined benefits of boosting employee engagement includes:  “greater productivity, improved performance, lower turnover, better recruiting success and even higher earnings per share (EPS)”.

Disengaged employees, on the other hand, cost companies time, productivity, and revenue. They are more likely to perform more poorly and their relationships with customers may be endangered as a result of not feeling committed to their role.

The Benefits of Employee Engagement

Productivity

A report from Gallup indicated that companies with engaged workforces have 21% greater profitability. The reason for this is logical: when employees are more engaged, they are more motivated in general, but they are also more driven to finish tasks on time and to the best of their ability. It’s also more likely that they will go above and beyond to achieve their work goals and deliver the best possible customer experiences.

Creativity 

Deeper scientific research suggests engaged employees are “more likely to exhibit innovative behaviour”, which is unsurprising. Engaged, motivated employees tend to be more stimulated and relaxed at work and more open to new ideas—the basis for more creative and innovative thinking.

Retention

A 2023 Gartner survey of nearly 3,500 employees found that those who report being ‘energised and excited’ about their work are 31% more likely to stay in their organisation. This is likely because these employees do not have a reason to seek other employment: they can more easily identify a professional growth trajectory, empathise with leaders, and can see their work and effort being recognised throughout their organisation.

Customer Satisfaction

An engaged employee is more likely to be attentive and passionate about what they’re doing. In customer-facing roles, that energy is also going to be felt in the customer service experience. If a customer can tell a person is interested and committed, this can enhance their faith in the organisation that they are dealing with and leave them feeling more satisfied with the customer experience that they’ve received.

The Challenges of Maintaining Employee Engagement

It’s vital to identify employee engagement as a top priority for any organisation, especially as the job market becomes increasingly more competitive. However, there are some challenges that can affect your ability to maintain employee engagement within your organisation. Here are some of the biggest hurdles that you might face: 

Communication

Not feeling properly listened to, or even heard, can be a huge driver of dissatisfaction that leads to employees disengaging from their role. There could be many reasons why someone feels isolated in the workplace, lacks motivation, or is at loss as to how they can progress. But this needs to be identified and made part of a conversation, often by regularly checking in with them and encouraging feedback and a culture of honesty.

Ineffective Management

The employee’s direct reports are the crucial link between the organisation’s leaders and the staff. Unfortunately, these roles are far too often ill-equipped to fulfil the task at hand and offer tailored pastoral and professional support to employees. 

A good manager that can keep employees motivated will be transparent, open in communications, and empathetic to the unique desires and ambitions of each person they manage. This means carving out 1:1 time to talk things through and let people know their progression and engagement is a priority.

Burnout

Every organisation will likely have encountered the problem of work-life balance and employee burnout at some point. Often unavoidably, workplaces can at times have long hours and mounting workloads. In these circumstances, some employees will try to prove their resilience.

But even when expectations are high, they need to be given resources to manage stress, encouraged to take regular breaks, opportunities to wind down, and other ways to achieve that work-life balance. Otherwise, employees might stop looking forward to coming to work.

Misalignment Between Personal vs Organisation Values 

Personal values are often a huge influence on how people approach their job. Given the amount of time people spend at work, it’s understandable that they might want to see their principles reflected in the workplace. Choosing core values for an organisation will help attract the right people who will be the right fit for the organisation and, as a result, more likely to remain engaged.

How to Measure Employee Engagement

Gallup’s 2024 report showed that only 23% of employees are engaged with their work. A staggering figure, which begs the question: how do employers and employees find a solution?

The first step is identifying how engaged the workforce is, which the following tools should help you with:

Get to Know Your People

It’s crucial that you understand the individuality of each team member. Knowing what their specific needs are, what they want out of their role, and what challenges they face is vital to understand what the obstacles to engagement are. From there, finding a consensus on engagement goals and what they feel they need to become, and stay, engaged will help maintain everyone’s focus on getting the most out of work.

Use Engagement Surveys

Many companies now use an annual engagement survey with tailored questions to find out what employees' experiences are. What do they like most about their jobs and their company? Which people are ambivalent about the company values, and what do they want to see done differently? Addressing these questions is crucial to showing empathy towards employees and helping them feel recognised, which can then support their increased engagement.

Performance Reviews and Feedback Meetings

More formal than a 1:1, performance reviews are where critical decisions are made around training, compensation, and career development. They are also key opportunities to see how engaged employees are, and identify areas that may leave them feeling less motivated and committed. 

This is also a pivotal opportunity for putting the principle of open communication into practice, allowing the employee to speak their mind, think about the opportunities they need, and work towards a constructive conversation on their future at the company.

Exit Interviews

People leave organisations for many reasons, but when an employee does move on, their exit interview is a key moment to find out what might have gone wrong throughout their time. If they are leaving due to feeling more excited about a new role, at some point their current role must have seemed less exciting, leading to disengagement. It’s an important opportunity for the company to find out where it may need to improve in order to boost retention.

Absenteeism Rate

Absenteeism is where employees habitually don’t turn up to work or remain there during core working hours. 

Sometimes employees are absent for good reasons and may need flexibility to account for personal circumstances, but persistent absences disrupt workflows, undermine trust between employees and management, and have a knock-on effect on the rest of the organisation. This could be due to conflicts with colleagues, burnout, or simple disengagement. Either way, it’s a strong indicator of where things can be improved.

A quick formula for absenteeism rate is by dividing how many unexcused absences there have been in a set period by the number of workdays, and multiplying that number by 100. This gives the rate for that period. For context, a rate of 1.5% is considered healthy.

How to Improve Employee Engagement 

Finally, when it comes to improving employee engagement, there are several effective ways you can do this. This is not an exhaustive list, but one that should help guide you in enabling your staff to feel more committed to and aligned with the work they do.

1. Identify Company Values

If employees are aligned with the goals of the organisation they belong to, work can be made more meaningful. That’s why clearly laying out what you stand for as a company or institution is essential. There's no way for people to identify themselves with your ambitions without having explicit goals that everyone can share. 

The decision of what those core values are often falls to the C-suite or the business owner. But this can also be a collaborative process, where everyone pitches in during an off-site or away day, or staff are surveyed for their ideas.

2. Provide Support for Mental, Physical & Financial Wellbeing

When employees are engaged, they enjoy their work. They also tend to feel valuable to their team and the wider organisation. But benefits like physical and mental health support can help boost this further by taking the edge off disruptive life events, and allowing employers to become more involved in their people’s lives. 

From health plans to Employee Assistance Programs or even salary sacrifice schemes for holidays, benefits help contribute to a healthier professional relationship when staff feel empowered to discuss issues with their employers, knowing they can get empathy and support for their situations outside of work.

3. Recognition and Reward

It’s no groundbreaking psychological insight to say that a lot of employees—or rather, human beings—like affirmation. Giving employees recognition for their hard work is a strong motivating factor in keeping employees loyal and feeling like they are part of a workplace community. 

This is about more than positive reinforcement for good work. When people feel seen for their contributions, it can fill them with a sense of purpose and help them see themselves as part of the wider goals of their organisation. 

When it comes to performance-related rewards, these don’t necessarily have to be monetary. Letting people know when they’ve done their job well can go a long way in helping them feel valued.

4. Feedback, Feedback, Feedback

Recognition is key, but feedback is also crucial. Gallup data shows that effective feedback fuels performance, and that 80% of employees who say they have received meaningful feedback in the past week are fully engaged. 

Giving employees the opportunity to take anonymous engagement surveys is effective, but the best managers collaborate with their individual team members to understand how feedback can be targeted and meaningful. Regular 1:1s and check-ins are an important part of this, but they should be tailored to create an encouraging, open forum for employees who might be reluctant to share their honest opinions.

Learn more about employee satisfaction and commitment in the workplace from other articles on our blog, or explore Vivup’s benefits platform today.