How Employee Engagement Drives Growth

Employee engagement is a business imperative. It drives growth in a variety of ways.

Companies that prioritize employee engagement are much more likely to grow. It’s not about sporadic initiatives like happy hours and surveys to make employees feel good (although those do play a role). It’s about creating experiences that proactively support your employees.

1. Employees are more productive

In addition to the monetary benefits of a highly engaged workforce, businesses that prioritize employee engagement experience better customer satisfaction, reduced shrinkage, improved quality and lower absenteeism. These positive impacts result in more efficient operations, and they can save companies money through increased productivity.

The most effective ways to improve employee engagement are through recognition, training and communication. Employees want to feel that their work matters, and they want their managers to take an active role in helping them achieve success. This means setting goals, encouraging creativity and supporting professional development. Providing opportunities for employees to give back to the community, like taking employees out for volunteer days, can also help foster an environment that is more engaging.

When employees are engaged, they tend to stay with the company for longer. Depending on the organization, business units with highly engaged employees see up to 59% less turnover than their disengaged counterparts. This is because employees who are satisfied with their jobs don’t feel the need to look elsewhere for new opportunities.

To help improve employee engagement, it’s important to ensure that your employees are getting enough rest and have a healthy work-life balance. Additionally, it’s important to provide a culture that encourages teamwork and collaboration. Finally, it’s vital to listen to employee feedback and address any areas that need improvement.

Employees may be reluctant to share their opinions in public settings, so providing them with other avenues for feedback such as anonymous surveys, casual conversations and sit-down meetings is a good idea. It’s also a good idea to integrate new hires from the start, so they feel welcomed and like part of the team.

2. Employees are happier

Employees want to work at companies that value them as people and care about their needs and desires. They want to feel that their work matters and that the company is trying to make a positive difference in the world, not just financially but also socially. That’s why companies need to take the time to ensure that their employees are happy in their jobs.

Happiness and engagement go hand-in-hand. Employees who are engaged and passionate about their work are much happier than those who are simply satisfied with their jobs. And when they are happy at work, they’re more likely to be productive and give discretionary effort.

Employees who are happy at work are also more motivated to succeed, which helps them produce higher quality work. They’re less likely to waste time on distractions, like social media and entertainment sites, so they can focus on the tasks at hand. They’re also more likely to show up for work and not skip out on important meetings or be absent on a regular basis. Employees who are happy are also more likely to stay longer in their jobs, which cuts recruiting and training costs. And they’re less likely to have safety incidents or quality issues that could negatively impact the business.

Unfortunately, many managers treat employee engagement as a sporadic exercise in making their employees happy. They give them free stuff or a bonus here and there, but the only way to truly engage your employees is to have ongoing coaching conversations with them and to provide them with the resources they need to succeed. This means giving them tools, such as kiosk mode and blocking entertainment sites, to help them be more focused and effective at work. It also means helping them feel like their managers are invested in their careers and not just looking to fill an HR quota.

3. Employees are more engaged

In the long run, companies with engaged employees make more money. AON Hewitt found that companies with highly engaged workforces have higher EPS than their peers over five years.

An engaged employee brings their full self to work and is often found doing more than just their required tasks. They identify areas of improvement, evangelize their company, and help coworkers grow. They care about the goals of their organization and are motivated by a deep sense of attachment to the culture and mission. This means they are more likely to go the extra mile and perform above and beyond expectations when necessary.

Employees who aren’t engaged don’t give their best efforts or consistently meet performance standards. They will rarely surpass their minimum requirements and often dip below them. In a best-case scenario, they may log in a few extra hours or spend more time on the phone with a client who needs help, but only as a last resort.

High levels of employee engagement mean better customer service, which translates to higher sales for the organization. According to Kincentric, a 2019 study, managers who prioritize consistent feedback and act as coaches for their team have more engaging employees.

Engaged employees are also less costly for the company. They have lower absenteeism and turnover rates, are safer at the workplace, and produce more quality work. Moreover, they need less supervision, which saves the company money in terms of coaching and training time for supervisors and managers. This is especially crucial for businesses that rely on low-cost, entry-level employees. Moreover, if your employees are more engaged, they’re likely to stay longer. In a world where job hopping is increasingly common, it makes business sense to invest in employee engagement early on to prevent the loss of top talent.

4. Employees are more loyal

Whether you are looking to improve customer satisfaction or increase profit, the best way to get there is through employee engagement. Employees are more loyal when they are engaged because they care about the organization and its vision. They are willing to put in the extra effort to make it work and are proud to tell others about their employer.

The best managers know how to engage their team members by focusing on what is important to them, listening and coaching regularly. They understand that it is not enough to simply provide financial benefits, and focus instead on demonstrating the company’s values and providing an inspiring purpose to motivate employees.

A recent study by the Temkin Group, now part of Qualtrics XM Institute, discovered that employees who are highly or moderately engaged cost their companies less than those who are disengaged. This is because employees who are disengaged have higher absenteism, turnover and safety incident rates. They are also more likely to be distracted at work and to spend time at home or on social media.

Engaged employees are more committed to the success of their employers and will go out of their way to meet customer demands. They are more productive and will stay longer than disengaged workers. In fact, a Gallup meta-analysis confirmed that teams with high engagement levels have 23% lower turnover and 50% higher profitability than teams with low engagement levels.

Leaders should recognize the efforts of their teams to show that they care about them. They should communicate clear expectations and provide opportunities for employee feedback, as well as reward employees for a job well done. This will help to create a strong, trusting relationship between the leadership and the front-line employees. This will help to keep employee engagement levels high, which in turn will lead to increased profits.

5. Employees are more productive

Employees who are engaged work harder and smarter with the company’s goals in mind. They don’t work for a fat paycheck but because their job matters to them and aligns with their internal values, beliefs and aspirations. That emotional connection to their work drives their performance and productivity.

When companies rely solely on financial incentives to drive engagement, they are missing the point. A well-defined employee engagement program should focus on the development of employees, transparency in communication and meaningful recognition. In turn, this will improve productivity and the business’s bottom line.

The best way to increase employee engagement is to proactively support employees through their personal and professional journeys. This includes implementing solutions that provide visibility on how engagement is performing at a granular level, allowing managers to take action when needed.

High employee engagement also reduces the cost of turnover. This translates into savings for the company in terms of advertising, training new hires and paying out salaries to existing employees. According to Gallup, companies with highly-engaged teams have a 21% higher profit margin than their counterparts.

Another benefit of engaging employees is that they are great ambassadors for the company. They are able to deliver outstanding customer service and build long-lasting relationships with customers. This leads to increased brand loyalty and repeat purchases, which is beneficial for organic growth. It is estimated that customers spend 13% more with brands who give them good customer service. And this translates to improved ratings, higher NPS scores and ultimately, greater profitability. It’s worth noting that the positive impact on profitability is often immediate. A 1% increase in employee engagement can result in a 4% revenue increase for a small business and up to a 27% increase for a large enterprise.