What is Employee Engagement? And Why Does it Matter [+Tips & Trends]

What is Employee Engagement? And Why Does it Matter [+Tips & Trends]

You always go the extra mile for your employees. But, do they reciprocate those efforts? Employee engagement is the key – and it’s more than pizza parties and a pat on the back.

With the hunt for securing and retaining talent being more challenging than ever, human resources teams need to make creative efforts to foster employee engagement.

Continue reading to learn more about the importance of employee engagement, or jump straight to our lists of tips & trends in 2019.

What is Employee Engagement?

Employee engagement is the approach a company takes to create an environment and culture that strengthens the emotional connection an employee feels with their organization.

This attachment can motivate them to give their all every day, understand and efficiently execute their role within the company, and feel enthusiastic about doing so.

Some managers confuse employee engagement with employee satisfaction.

They are, in fact, two separate things – and here’s how they differ:

You may have a satisfied employee, but that doesn’t guarantee that they’re doing more than simply what’s needed.

However, if the same employee is engaged, it will contribute a lot towards their overall performance, enabling them to effectively carry out their tasks.

They may even prepare or plan out future tasks, find ways to optimize various processes, or assist other teams with their projects, etc.

This ‘engagement,’ as a result, adds value to the organization and contributes to its long-term growth and sustainability.

How to Recognize Engaged Employees

Engaged employees work for more than just a paycheck.

Instead, they’re driven by their passion to go above and beyond the call of duty and achieve milestone after milestone for their organization.

So, as a manager, recognizing engaged employees, and identifying the disengaged ones, can go a long way in determining your team’s weak strengths and weaknesses.

This table compares the key characteristics of the two:

ENGAGED EMPLOYEESDISENGAGED EMPLOYEES
Always put the company’s interests above their ownWork for their own interests, even if they don’t align with the company’s goals
Are proactive and do more than what’s requiredNeed constant reminders and never take initiatives
Maintain strong communication with colleaguesDon’t make efforts to communicate with their teams
Focus on bringing solutions to the tableComplain about existing issues
Love their work, regardless of the dayLove certain aspects/days of their work

Employee Engagement In Numbers

Let’s have a look at a few statistics to understand the importance of engaged employees:

  • According to a report published by Gallup, highly engaged teams generated 21% higher profits.
  • The Engagement Institute found that disengaged employees cost US companies somewhere between $450 to $550 billion per year.
  • A 2017 Gallup report stated that engaged employees can boost productivity by 17%.
  • According to one report, organizations that focus on employee engagement reduced turnover rates by 40%.
  • Employee engagement can reduce workplace absenteeism by 40%.

How Employers Benefit from Employee Engagement

To further understand the importance of employee engagement, and how it can shape or deflate an organization, let’s look at the benefits from the perspectives of both, employers and employees.

Here are a few major ways employers benefit from employee engagement:

1. Engaged employees are emotionally invested

An employee who has an emotional connection with their employer and the organization, understand that they’re part of something bigger than themselves.

Such individuals are self-motivated, enthusiastic about their jobs, and find satisfaction in working for the betterment of the company – characteristics of an ideal profile.

For example, Komatsu – a Japanese manufacturer of construction equipment – experienced a 37% rise in employee engagement after investing in a month-long leadership development program that focused on EI (emotional intelligence) skills.

2. Employee engagement boosts productivity

An engaged employee will always strive to complete their tasks on time, and then some.

The concerns of engaged employees aren’t limited to their own job – they care about the organization as a whole, and contribute wherever they can.

This means that they’re motivated to volunteer and make discretionary efforts, which result in greater satisfaction and higher productivity.

3. Employee engagement can reduce your turnover rate

According to one of Gallup’s reports, the turnover rate for Millennial employees alone costs the US economy somewhere around $30.5 billion per year – which includes everything from hiring expenses to the cost of training new employees.

Since Millennials became the largest generation in the US workforce, overtaking Gen X’ers in 2016, it’s time employers addressed this issue of high costs resulting from employee turnover.

Employee engagement is the key to retaining your team and keeping that turnover rate under control.

On average, engaged employees remain more content with their existing jobs when compared to their disengaged colleagues.

Gallup found that organizations with engaged units experienced 67% lower turnover rates than those with disengaged and unmotivated employees.

4. Employee engagement can cut down workplace absenteeism

According to Centers for Disease Control and Prevention (CDC), US employers collectively lose $225.8 billion each year because of employee absenteeism.

This loss results from a combination of direct and indirect costs associated with low productivity, such as overtime bonuses, loss of sales, etc.

While there are a number of reasons for workplace absenteeism, low morale and stress are two culprits most employers miss – both, textbook symptoms of disengagement.

As per Gallup’s findings, companies that focus on employee engagement experience lower employee absenteeism.

Employees who aren’t engaged might not feel motivated to show up for work every day, let alone give 100%.

5. It can improve customer satisfaction

Engaged employees are more passionate about satisfying their customers. They’re consistent with their efforts in dealing with the public, regardless of the day or time.

An engaged employee will interact with a customer at 5 PM with the same enthusiasm and energy as they would at 11 AM.

Ideally, every person in your organization should be engaged. Workers who regularly come in contact with customers (like sales agents, customer reps, cashiers, etc.) must be all in if you want to deliver a delightful employee experience.

Since all clients or customers need to be treated with courtesy and respect, having an engaged team of professionals that go above and beyond will help you:

  • Create strong, fruitful relationships.
  • Strengthen your brand’s image.
  • Retain your customers.

In fact, according to one source, seven out of ten people will spend about 13% more on a company with superior customer service.

6. Engaged employees are motivated to grow and learn

Apart from the promise of a steady paycheck, work-life balance, and some other incentives, the modern workforce expects growth opportunities from their employers.

It’s easier to motivate engaged employees to learn and get them on-board with training and development programs.

Such employees seek challenges and ways to grow as professionals to take their careers to the next level.

This opens the door to employees exploring additional skill sets, taking on further responsibilities, or moving into managerial roles as a way of professional growth.

How Employees Benefit From Employee Engagement

To discuss the benefits of employee engagement for employees, we’ll have to look at why employee engagement works.

1. Employee engagement results in a happier team

On average, organizations that view their employees as resources, rather than individuals, report lower satisfaction, morale, and productivity.

A key characteristic of organizations that promote employee engagement is that they don’t resort to traditional, harsh methods of ensuring productivity and performance, such as strict punishment policies.

Instead, they use tactics like one-on-one employee feedback sessions, creative reward policies, unique incentive programs, and public recognition for jobs well done, among others.

Ultimately, such employee-oriented tactics result in happier employees – allowing them to work hard, complete goals, and enjoy the entire process.

2. Engagement positively affects the personal lives of your employees

An interesting Kansas State study concluded that engaged and motivated employees led happier lives at home.

According to this study, positive experiences in the work place can “facilitate” family interactions and influence personal lives.

This makes sense.

Working (daily) in an environment that accepts individuality, encourages personal growth, and provides educational resources and unique incentives, among other things, results in a positive mind state over time.

Being able to show up to a low-stress, fun, and engaging environment everyday, allows employees to leave in a good mood when they clock out.

3. It can make employees healthier

Apart from mental health, employee engagement can also contribute towards your team’s physical fitness.

Another interesting report by Gallup – which focused on the relationship between employee engagement and the physiology of workers – found that engaged employees exercise more and lead healthier lifestyles.

By comparing three categories of employees, labeled “Engaged,” “Not Engaged,” and “Actively Disengaged,” they found:

  • 54% of “Engaged” employees said that they exercised at least 30 minutes each day, whereas 59% said that they ate healthy meals the day before the survey.
  • 49% of “Not Engaged” employees exercised and 54% followed a healthy diet.
  • 45% of “Actively Disengaged” employees reported exercising for 30 minutes daily, whereas 53% consumed healthy foods.

Also, a previous research by Gallup found that engaged employees are “less likely to be obese and develop chronic diseases.

8 Tips to Foster a Culture of Employee Engagement

The benefits that come with engaging your employees are great for everyone, but how can you, as a manager, realistically foster a culture of employee engagement?

Here are some tips to get you started:

1.       Devise a formal on-boarding and training process

Employee engagement starts from day one.

New employees expect complete clarity on what’s expected of them – their exact set of responsibilities and how their roles fit into the bigger picture.

Never assume that they don’t need detailed information, regardless of their previous experience(s).

By going through an on-boarding process and receiving these guidelines, your new employees won’t feel frustrated or confused.

In fact, from day one, they’ll be motivated to take initiative and try to make an impact.

To make the on-boarding process smoother, follow these tips:

  • Communicate the workplace culture – which includes the organization’s values and norms.
  • Schedule one-on-one meetings with other team members/introduce them to the gang.
  • Provide the new employee with an employee handbook and assign them a mentor/buddy.
  • Assign simple and easy tasks in the beginning – don’t test-drive their responsibilities all at once.
  • Familiarize them with the tools that your company uses, for example, a CMS, CRM platform, intranet etc.

Apart from the on-boarding process, you also need to establish an effective training program.

The program should target all of your employees – old and new.

Here are some pointers to help you train your employees the right way:

  • Start by assessing the areas that need improvement, for example, cyber-security, workplace ethics, etc. For all new employees, you may follow a standard training protocol.
  • Communicate the learning objectives of the training program. For example, if the program focuses on a new software, let your employees know the benefits of familiarizing themselves with the new platform and how it could benefit the whole organization in the long-run.
  • Design learning material that is easy to comprehend. You can make slideshows, PDF files, and video lessons, among others.
  • If you have a large workforce to train, consider investing in a decent learning management system.

2.       Acknowledge all of your employees

It’s impossible to engage/establish an emotional connection with someone if they don’t acknowledge you.

While acknowledging your employees won’t guarantee engagement by itself, a lack thereof will result in disengagement.

As a manager, you already have a lot on your plate. Praising your team for every little accomplishment might seem exhausting and unnecessary.

However, it can boost employee morale.

A 2013 Globoforce study found that 89% of employees felt more motivated when told that whatever they were doing was right.

While that may raise some questions regarding constructive feedback, it points towards a simple act of acknowledgement and the effects of micromanagement (more on that later).

Follow these tips to acknowledge your employees:

  • Greet whoever crosses your path and ask them about their day.
  • Praise and reward your employees who go the extra mile in front of the whole team.
  • From time to time, remind your employees about the significance of their roles and how their efforts keep the business afloat.
  • Involve them in decision-making processes and ask for their opinions to show that they matter.

Such actions, though seemingly minor, will create positive impacts if taken consistently over time.

3.       Set and communicate your company’s goals

Running a business without goals is like shooting darts in the dark.

Where new employees need to know how they’ll contribute to the overall success of their team, existing employees need updates on the company’s existing goals.

However, it all starts with you: First, you have to define your goals:

  • Analyze what your company needs to get to the next level. A goal that doesn’t help your company grow isn’t worth the effort.
  • Use the S.M.A.R.T. technique i.e. make your goals specific, measurable, achievable/actionable, realistic, and time-bound. A good example of a SMART goal is: “closing X sales by the end of the 2nd quarter.”
  • Set monthly, quarterly, semi-annually, and annually goals to make your vision attainable.
  • Involve your employees in the goal-setting process to engage them.
  • When you’re done setting your goals, create plans to achieve them. For example, if your goal is to “generate X amount of leads in Y months,” one of your plans could be to create a lead generation asset to encourage people to sign up.

Once you’ve set your company goals and created a game plan, you must communicate them:

  • Have meetings once a week, or twice a month, to discuss progress, provide a refresher on existing goals, and/or discuss future goals.
  • If you’re using a project management or team collaboration tool, such as Asana, Slack, or Trello, create a separate folder/card where you list down all relevant, organizational goals.
  • Get a whiteboard or a pin board for your workplace and write/pin down current goals for your employees to see. To make things fun, hang a metallic bell next to the board and have one of your employees ring it every time you achieve a major milestone.

4.       Provide the resources necessary to achieve goals

At times, employees are ready to buckle down and get things done, but aren’t given the proper tools/resources necessary to work efficiently, or comfortably.

These resources could be anything, including a fast computer with working peripherals, a software that makes the job easier, guides/manuals to help employees succeed, or even coffee on tap.

When employees aren’t provided these resources, they can get frustrated, stressed, and demotivated – all of which results in disengagement.

To steer clear of this problem:

  • Create a separate monthly budget for the provision and maintenance of critical resources.
  • Assess what the team needs from time to time. You can have one-on-one meetings with your employees and ask them what they need. If it’s in the best interest of the company, consider getting those things.

It is not enough to encourage employees to work hard or get things done, employers must also provide all the means required for them to do so.

5.       Remove barriers to communication (between employees & top-management)

According to a study by The McKinsey Global Institute, organizations where employees felt connected experienced a 20-25% increase in productivity.

This connection starts by removing barriers to communication.

Working in silos (and removing healthy inter-department interactions) may not be good for engagement.

Apart from that, upper level-management needs to be more transparent and open to communication.

In a nutshell, managers need to be approachable and available to provide their counseling and guidance. All of this will result in a cooperative environment where every individual is engaged.

Here are some tips for promoting open communication in the workplace:

  • Have group meetings every other week or month, encouraging all employees to provide their input.
  • Encourage managers to provide counselling sessions to the employees.
  • Don’t hold back from sharing valuable feedback and encourage your employees to do the same.

6.       Promote two-way communication in the workplace

Managers shouldn’t be the only ones to provide feedback.

To engage a workforce, the top management must also be open to receiving feedback from employees.

For that, managers need to establish a culture of two-way and open communication.

If employees feel reluctant to share their view-points or voice their concerns, it’ll stress them out or even make them resentful, which can result in lower engagement.

So, it falls upon you – the manager – to take initiative and encourage your employees to discuss whatever is on their minds.

To promote open communication within the workplace, you can:

  • Be extra careful while hiring managers/team leads. Make sure they’re open to receiving constructive criticism from their teams. Train your existing managers to accept and process feedback without getting personal.
  • Design employee engagement surveys and have employees fill them out every month, quarter, or year.
  • You can include both open-ended and close-ended questions like, “Is there anything you’d like to suggest with the management?” or “On a scale of 1 to 5, how satisfied are you?”
  • Keep an “open door” policy and lead with example.

7.       Provide feedback on a regular basis

Do you provide enough feedback to your employees? Is that feedback constructive in any way?

How much feedback is too much? At what point does feedback begin to backfire?

These are some of the questions that every manager needs to ask themselves.

A great way to engage your employees is to have one-on-one feedback sessions – where you break down their performance and discuss their strengths and weaknesses.

It’s not realistic to expect managers to provide individual feedback to a team of 100 professionals. However, designating an hour every week or two to providing quick feedback to one unit is reasonable.

Here are some tips to provide feedback the right way:

  • Highlight the progress and other accomplishments of an employee, even if the overall feedback is negative.
  • Have performance evaluation interviews at the end of every month, quarter, or year, and provide employees in-depth feedback.

Providing the right amount of feedback and assistance, while allowing employees to take initiative, results in higher engagement.

8.       Don’t micromanage

Micromanagement is perhaps the biggest killer of employee engagement.

Instructing employees on how to perform even the slightest tasks in certain ways is discouraging, and leads to a lack of productivity.

While it’s true that certain jobs require employees to follow standard operating procedures, in most cases, close supervision and a “my-way” attitude from managers can lower the morale.

Every job – especially those that require creative input – requires a level of autonomy.

This autonomy shouldn’t be limited to setting goals or personal schedules – it should be practiced in most day-to-day tasks, without any consequences.

Another aspect of micromanagement is providing too much feedback and being overcritical.

In an experiment conducted in 2007, two groups were tested in an inventory management simulation. Group A was given more feedback than group B.

The result – group B performed 11% better than group A.

Here are some tips to avoid being a micro-manager:

  • During meetings, discuss matters with an open-mind, and look to learn something new.
  • Realize that there could be more than one “right way” of doing certain things, and allow your employees to use their creativity to do them. For example, if an employee prefers to use a certain layout and shortcuts for a software, let them do it, as long as it doesn’t interfere with their work.
  • While creating or revising SOPs, encourage your employees to provide any suggestions or overall feedback.

Ultimately, there is no point in hiring talented individuals then dictating their every move.

The 5 Hottest Employee Engagement Trends to Follow

Here are 5 employee engagement trends that you can leverage to send your organization to the next level:

1.       Unique financial incentives

According to classical theories of management, money is the biggest motivator for any workforce.

While that’s no longer relevant in today’s landscape, financial assistance, such as medical coverage, can go a long way in engaging employees.

However, some companies are providing this financial assistance in unique ways, catering to the needs of the modern workforce.

A good example is student loan repayment.

Some organizations are offering to repay the student loans of their employees through different platforms like FutureFuel.

This special perk has shown promising results in terms of employee retention.

In fact, according to a survey, 86% of employees would want to work for a company for 5 or more years if they offered to help pay off their college loans.

So, think beyond medical insurance and free lunches, and come up with a unique way to financially assist your employees.

2.       Working for a cause

Another factor that drives engagement in today’s workforce (most of which includes Millennials) is involvement with causes.

A study found that organizations that focused on their CSR (corporate social responsibility) strategies and worked on different causes, found it easier to retain millennial employees.

Therefore, to make your employees feel like they’re part of something bigger than themselves and engage them, consider giving back to the world in other ways.

If you already haven’t, start by creating a CSR strategy:

  • Pick one cause that you want to work towards. It’s tempting to work towards multiple causes at once, but you can’t save the world in one go.
  • Train your employees to align their actions with the cause you’re working for, both, at work and in their personal lives.
  • Plan small CSR activities throughout the year, such as tree planting, fund raising for a local animal protection group, etc.

Along with making efforts to keep employees happy, companies that also make efforts to introduce positive changes in the world experience higher retention rates.

3.       Increased flexibility

The modern employee wants to work on their own terms.

According to a recent survey on pay and flexible benefits plans, 76% of respondents considered a “flexible working schedule” as the most attractive incentive.

Flexibility not only reduces the stress to get the job done in a specific time period, but it also provides a sense of autonomy – both of which are perfect for engaging employees.

In another study, which focused on Millennials, 77% of respondents said that a flexible working schedule made them more productive.

On that note, consider ditching the mandatory 9 to 5 regime, and cut your employees some slack.

4.       Leveraging gamification

At times, employees find it difficult to wrap their heads around certain incentives and company policies.

Modern organizations have come up with a solution to this problem – gamification.

By gamifying your onboarding process, training programs, and other day-to-day tasks, you can experience a rise in employee engagement.

For example, you can leverage an app that tracks the heart rate of employees, and reward them for working out. You can also gamify assessments, where employees participate in an immersive experience.

Such employee incentive programs are key variables in fostering engagement.

5.       Emphasis on employee experience

With a great emphasis on making companies “people-oriented,” more and more organizations are now focusing on their employees’ experiences.

Also known as EX, this concept involves how an employee feels within their work place and what they observe – which are a few deciding factors of engagement.

According to a survey by SHRM, organizations whose employees reported more positive experiences were 400% more profitable.

So, how do you provide the right kind of employee experience?

SHRM says that it’s a combination of the following factors:

  • Culture
  • Technology
  • Physical work space

Building the right culture is a slow process.

However, you can experience results right away if you work on the environment and technology.

For starters, with technology, you can provide better tools and ample training.

As for your physical work place, make sure that your employees aren’t feeling crowded, are working in a safe and pleasant environment, and have an area to rest or take breaks.

Adopt a Winning Mindset

At the end of the day, it’s engaged employees that are going to help scale your business.

Creating an environment where every employee is motivated to do more for their company can be accomplished through the right mindset and tactics. You must have creative employee engagement strategies that encourage employees to collaborate with co-workers and contribute to positive business outcomes.

The bottom line is: you need to foster a culture of employee engagement, ditching the traditional management style, and building a team that takes pleasure in showing up to get things done – every single day.