Why is employee engagement important?

Employee engagement is a popular topic among people leaders and HR teams. It’s a critical metric in any workplace, but it can also be a tricky one to grasp. Why is employee engagement important?

At its heart, employee engagement is about investing in what matters most – your employees.

To better understand why employee engagement is so valuable, let’s take a look at the key benefits and business outcomes. We’ll also explore why prioritizing engagement is the right choice for both your employees and your business.

Employee engagement explained: Beyond basic satisfaction

Employee engagement is a key measure of organizational health and an essential component of the employee experience. When engagement is high, the company and its workforce thrive. An engaged employee actively contributes to the company’s success and willingly goes above and beyond to achieve company goals.

At Culture Amp, we define engagement as a measure of the following five factors:

1. Pride
2. Recommendation
3. Present commitment
4. Future commitment
5. Motivation

When employees are engaged, they feel connected and committed to their team, company, and the organization’s broader mission. They are proud of the work they do and will actively recommend the company to their peers.

How employee engagement differs from employee satisfaction

Employee satisfaction measures how satisfied your employees are – the degree to which they’re happy with their jobs and workplace experience. Employee satisfaction can be affected by a range of factors, such as:

• Work environment and relationships
• Work-life balance
• Career development opportunities
• Flexibility and autonomy
• Workload
• Salary
• Job security

However, unlike engagement, satisfaction is a one-sided metric. It reflects how employees feel about their jobs and the company, but it doesn’t reveal whether they’re channeling that feeling into action.

Think of it this way: While all engaged employees are likely satisfied, not all satisfied employees are engaged. “Quiet quitting” is an easy-to-understand example of this phenomenon. Employees may be content with their job title, salary, and day-to-day responsibilities but lack the drive to do more than the bare minimum.

For this reason, we strongly advocate that organizations focus on measuring – and maximizing – employee engagement over satisfaction.

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Why smart HR leaders prioritize employee engagement

Why prioritize employee engagement? Because engaged employees are happier, more productive, and less likely to leave. Contrast this to barely engaged employees, who may show signs of absenteeism, low productivity, and underperformance. A focus on engagement helps create a workplace where every individual is set up to thrive. And with more than half of employees reporting that they are “relatively unproductive“ at work, now is the time to act.

6 key benefits of engaged employees

An engaged employee doesn’t just stick around – they thrive. Understanding how to engage your employees is vital for creating a company culture that encourages every employee to perform at their highest standard.

When you build a workforce of engaged employees, you can tap into the following business outcomes:

1. Improved retention and turnover
   Highly engaged employees are more committed to their teams and organization and are thus more likely to stay with the company long-term, boosting employee retention and reducing turnover. In contrast, barely engaged or disengaged employees often do only the bare minimum and may actively seek new opportunities, leading to higher turnover rates.
2. Enhanced workplace collaboration
   When members of a workforce are highly engaged, they’re united by a common goal and vision. They are driven to contribute meaningfully toward that goal and will work actively with others in the company to make that vision a reality.
3. Higher performance and employee productivity
   Engaged employees are more motivated and dedicated to their work and more likely to exceed the requirements of their role. The data supports this – Culture Amp’s people scientists have found that the highest-performing employees are also the most engaged.
4. Increased customer satisfaction
   When employees feel connected to and passionate about their work, they are more likely to go above and beyond to meet customer needs. This means they’re more likely to take a positive approach to customer interactions, anticipate what customers seek, and take the initiative to resolve issues.
5. A pipeline of future leaders
   Harvard Business Review found that highly engaged employees in purpose-driven organizations are more likely to stay and advance into leadership roles, creating a sustainable pipeline of future leaders for long-term company success.
6. More effective organizational change
   Highly engaged employees are more adaptable. They’re more open to new processes because they feel aligned with the company’s mission and understand the purpose behind the change. This alignment helps employees embrace transitions, reducing resistance and maintaining productivity during change.

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Strategies to boost employee engagement in your organization

Effective engagement strategies are essential for enhancing organizational performance and profitability. If you’re looking for employee engagement strategies to implement at your organization, we recommend starting with employee surveys.

Run regular employee engagement surveys

Employee engagement surveys are vital for identifying gaps in engagement. They provide insights into employees’ feelings about their roles, leadership, and work environment, allowing organizations to understand and address employee concerns before they escalate.

Here’s how you can make the most of your employee engagement survey:

Conduct employee engagement surveys regularly
To uncover trends, measure the impact of your initiatives, and identify areas for improvement, you’ll need to track employee engagement over time. While a single survey offers a snapshot of current engagement, viewing the results with historical context allows for richer, more meaningful analysis and data-informed decision-making.

Ask the right questions
If you want to maximize the impact of your employee engagement survey, you must ask the right questions. And this is important: Only ask questions you are prepared to act on.

At Culture Amp, we recommend asking a mix of the following questions:

• Employee engagement index questions, which focus on the five key outcomes of employee engagement
• Questions about leadership, enablement, alignment, and development (LEAD)
• Questions about overall company confidence
• Free-text and open-response questions

Check out our complete list of employee engagement survey questions to get started.

Act on the feedback you receive and share how you’re responding

To win the trust of your employees, you need to implement visible changes after you collect their feedback. This shows them their input matters and will lead to tangible changes. Otherwise, employees may feel there is no point in sharing their feedback in the future. They may stop providing genuine, thoughtful feedback in their surveys – or even stop participating altogether.

Try out these tips for communicating survey results after your next engagement survey.

Developing a tailored employee engagement strategy

A one-size-fits-all approach rarely increases employee engagement. To develop a truly effective strategy, take the time to understand your workforce's unique needs.

Here’s a step-by-step guide to creating a tailored strategy:

1. Gather data
   Use surveys, performance reviews, and feedback sessions to identify gaps in your workplace experience. Look for patterns. For example, do employees from a specific demographic group score lower than others in questions around belonging and equity? Or does one department have a higher-than-average number of employees responding unfavorably to questions about communication and enablement?
2. Set engagement goals
   After gathering data, define your focus areas for the next cycle, such as employee retention, productivity, or morale improvement. It may be a good idea to hold additional focus groups to surface deeper feedback from your employees.
3. Customize initiatives
   Based on your findings, design specific actions and initiatives. For example, you may find that many employees report that they don’t think the outcome of their performance reviews is fair. To target this pain point, you could choose to implement performance review equity audits and train managers on how to communicate performance results more effectively with their direct reports.
4. Communicate clearly
   Share the engagement strategy with the company and explain how the changes will benefit them. Open communication builds trust, so communicate timelines clearly and transparently and make this information easily accessible on different channels.
5. Implement and monitor
   Launching your strategy is just the beginning. You’ll also need to actively monitor it to ensure it remains relevant and effective. Track whether or not employee sentiment around the specific focus area is changing; if it isn’t, consider pivoting your approach or gathering additional feedback to evolve your initiative. Pay attention to big-picture trends – look beyond individual feedback and consider team and company-wide engagement.

To support this process, consider utilizing employee engagement software. Many offer built-in tools that make gathering feedback, analyzing survey results, and identifying focus areas easy.

The future of employee engagement: Trends to watch

As the world evolves, so too will the needs and expectations of your workforce. From the lightning-fast speed of AI breakthroughs to globalization, organizations looking to foster a culture of high engagement face numerous challenges and opportunities.

These shifts are changing how organizations connect with their teams, and companies must embrace new engagement strategies to motivate employees and help them feel connected in today's (and tomorrow's) workplace.

Top trends to look out for are:

Technology as an engagement enabler

Digital tools like employee engagement platforms are transforming how companies connect with their workforce.

From employee surveys and real-time feedback to analytics that track engagement over time, these technologies empower organizations to take a strategic, data-backed approach to addressing employee needs. By helping leaders pinpoint top focus areas and take targeted action, organizations can more clearly identify and address weaknesses in the employee experience.

Selecting the right employee engagement platform can elevate the employee experience by helping employees feel heard, surfacing data-driven insights, and preventing regrettable attrition before it’s too late.

The vital role of mental health and wellbeing in engagement strategies

Mental health and wellbeing are now at the heart of employee engagement, especially as Gen Z enters the workforce. Creating a supportive, psychologically safe environment is key to motivating and engaging teams.

Offering mental health days, counseling, and wellness programs can help reduce burnout and boost job satisfaction. When wellbeing comes first, employees perform better and are likelier to stick around for the long term.

Boost engagement to drive workplace excellence

Are you ready to transform your workplace and supercharge your employee experience?

Prioritizing employee engagement empowers organizations to foster environments where employees flourish, enhancing retention and business performance.

When you develop an environment where employees feel valued and connected, you can tap into the benefits of a highly engaged workforce, boost retention, foster innovation, and build a culture of sustained high performance.

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