Employee engagement describes the level at which an employee is connected to their work and the organization. Employees who are engaged do more than the minimum standard. They feel a positive connection to their teams, their work, and their organization, which motivates them to put in their best efforts and encourage other employees as well. They want their organization to succeed and believe they play a role in that success. This is important to small businesses because it reduces turnover, poor work performance, and associated costs.
Disengaged employees, on the other hand, feel indifferent to or negatively about their company. They may put in enough effort to complete tasks, but just enough to maintain employment. Often, they are on the lookout for a better job or are just interested in pulling a paycheck and going home.
How Employee Engagement Can Help Small Businesses
Gallup reports that only 36% of the US workforce feels engaged in their work—a percentage that is pretty much the same as in 2020 during the pandemic. Worldwide, that percentage drops to 20%. Further, 15% are actively disengaged, meaning they are miserable and don’t really care about work. We’re seeing the result of this in the “great resignation,” which Gallup warns may only be getting started.
Companies with high employee engagement enjoy multiple benefits:
- Higher employee retention: Engaged employees have less reason to leave a company because they feel not only invested in the goals of the company but valued as an employee and person. They see opportunities in the company and believe in the company’s purpose. Gallup’s 2020 Q12 survey of over 2.7 million employees in 96 countries shows engaged businesses have 18% to 43% less turnover.
- Less absenteeism: Similarly, employees are more likely to show up for work and take fewer personal days—a decrease of 81% in absenteeism, according to Gallup.
- Increased customer satisfaction: Engaged employees care about their jobs, which includes making sure customers are happy. Some 72% of executives say that engaged employees have happier customers. Gallup’s poll said engaged businesses have a 10% increase in customer ratings and an 18% increase in sales.
- Increased productivity: Engaged employees are not only more likely to show up for work but to actively participate. They feel more comfortable suggesting new ideas, and indeed, companies that focus on employee engagement often give greater autonomy for enacting innovations. This results in an average increase in productivity of 18%, per Gallup’s study.
- Improved safety: If your business is safety conscious, it pays to be engagement conscious. Gallup found that highly engaged businesses have a whopping 64% fewer safety incidents.
- Increased profitability: All of this, of course, helps your company make money and reduce costs. Overall, highly engaged businesses have a 21% greater profitability than companies with low employee engagement, according to Gallup.
What Does an Engaged Workplace Look Like?
An engaged workplace is one where employees are glad to come to work, focus on their projects, offer suggestions for improvements, and speak well of their company to people outside of work. Organizationally, businesses support employees in their career as well as immediate work goals and create an atmosphere of trust and communication.
Specifically, highly engaged workplaces have these qualities:
- Clearly communicated work expectations and goals
- Worker belief that their job is important to the mission of the organization
- Access to the right tools and information to complete a task
- A sense of fulfillment (“At work, I have the opportunity to do what I do best every day”—Gallup)
- Frequent recognition or praise for doing a good job
- Frequent professional feedback
- Valuing employee opinions
- Opportunities for career growth, including learning opportunities
- Supervisors or co-workers who care about the employee as a person
- Feeling that others are engaged as well
A study of some of the top-rated companies for employee engagement shows that they are willing to take chances and try unorthodox programs that consider employee needs as well as company goals. For example, in the hotel industry, Hilton has a program where managers work three days in low-level jobs to get a better idea of how work is done. Google gives employees a full workday (20% of their time) to pursue a Google-related passion project of their own. This combats boredom and gives employees a feeling that they have some creative control in their work—both of which are shown to affect employee retention.
Other companies use technology to improve communication and provide recognition, rewards, and feedback more frequently. Some, like Starbucks, put a priority on wellness with health insurance even for part-time workers, tuition assistance, and the ability to invest in the company.
Measuring Employee Engagement
Despite the importance of employee engagement, 64% of employees don’t feel engaged or worse, feel actively disengaged in their company, per the Gallup Poll. Worldwide, that number rises to 80%. Therefore, it’s important to measure employee engagement. This goes beyond a happiness survey, but does not have to be time-consuming, either. Rather than satisfaction, ask how well an employee feels heard, appreciated, recognized, and the like.
You can also analyze emails sent to employees, not for content but open rates, click-through rates (such as to shared documents), and location. Since email is a significant part of the workplace, reviewing them can give you deep insight into participation level.
Combine these findings with in-house statistics on retention and absenteeism to get a more complete picture. Finally, consider productivity and customer satisfaction.
Check out our guide to employee management for insight on managing your workers.
Employee Engagement vs Other Measures
It is important that you don’t confuse employee engagement with other ways of evaluating employee sentiment such as satisfaction or well-being. Although related, they are distinct and can result in different outcomes for your company. Click the tabs below to learn about the differences between employee engagement, employee satisfaction, and employee well-being.
Employee satisfaction only addresses how content your employees are to work at your company. It’s passive. Engagement, meanwhile, is active, addressing motivation, involvement, and commitment, all factors that affect performance. A satisfied employee could simply be glad to put in minimal work for a paycheck, while an engaged employee will put in extra effort because they believe in the company and want to support it.
Employee satisfaction does affect engagement, of course. Dissatisfied employees are seldom engaged ones. A good first step in improving engagement is determining if employees are satisfied, and if not, what needs you can meet while still maintaining company objectives.
Employee well-being looks at the employee as an individual—their health, mental well-being, and individual goals. Employee engagement, on the other hand, is company-centered. So, for example, an in-work fitness program can improve employee well-being, but will not help employee engagement in and of itself.
Like employee satisfaction, however, supporting the well-being of your employees can affect engagement. For example, a single parent may be more focused and interested in taking on a new project (engagement) if their child-care needs are met (well-being).
With the workforce radically changing thanks to technology, telecommunication, and the aftermath of COVID-19, it’s more important than ever to develop an engaged workforce. Employee engagement goes beyond employee happiness, looking at how much they believe in your company’s mission and are willing to be an active part of making your company grow. Paying attention to this vital area not only helps you avoid the cost of hiring new employees but makes your business more creative, improves customer service, and reduces absenteeism, all leading to more profits for you.