Employee engagement has long been a hotly discussed topic in the world of business, but it can sometimes be hard to remember why it’s so important in the first place. Everyone seems to agree we should make employee engagement a priority, but why?
Today, I’d like to take some time to get back to the basics, which are often obscured by the higher-level conversations. Here are the reasons why employee engagement matters and how it can add value to your business — even in the middle of a pandemic.
1. Engaged Employees Are More Loyal
The spread of COVID-19 has drastically changed business operations for the time being, but one thing remains true: Retaining existing talent is much more cost-effective than recruiting new talent. According to some estimates, it can cost 33 percent of a departing employee’s salary to replace them when you factor in recruiting expenses, manpower, and the time it takes to get a new employee up to full productivity.
Given that the pandemic is already impacting many companies’ bottom lines, it becomes even more important to keep turnover costs as low as possible. One big business benefit of employee engagement is that engaged employees are less likely to jump ship. According to Gallup, 73 percent of actively disengaged employees are looking for new opportunities, whereas only 37 percent of engaged employees are doing the same.
When employees are engaged, they are content where they are. They find fulfillment in their work, feel valued by their employers, and are dedicated to their roles and their companies. When employees feel well-compensated — financially and personally — they don’t have much incentive to leave.
2. Engaged Employees Are More Productive
Engaged employees genuinely care about their work. They understanding how their efforts directly contribute to organizational objectives and therefore feel rewarded by what they do every day.
In fact, engaged employees are known for going the extra mile. Engaged employees are more likely to put in discretionary effort, making them all the more productive. As a result, companies with highly engaged workforces can outperform those with lower engagement levels by as much as 202 percent. Similarly, engaged employees have a 60 percent lower error rate than their disengaged counterparts.
Because of their enthusiasm for their roles, engaged employees also tend to be more creative and innovative. Their willingness to put in discretionary effort means they are keen to think through tough problems rather than backing down at the first hurdle. They come up with new solutions to pressing issues to improve work for themselves and their teams.
3. Engaged Employees Are More Present
Absenteeism — the phenomenon of employees regularly taking time off of work because they’d rather not be there — rises as engagement falls. For example, in one survey of retail managers, more than half agreed that low levels of engagement drive higher levels of absenteeism. As a result of that absenteeism, retail managers noted lower customer satisfaction rates and lower store revenue.
Engaged employees, on the other hand, don’t want to let their organizations down. They feel a sense of responsibility for their work and a sense of accountability to their employers. As a result, absenteeism is far less likely to run rampant when employees are engaged.
That said, you do need to keep an eye on highly engaged employees to ensure they are getting proper rest and maintaining healthy work/life balances. Otherwise, you could end up with an epidemic of presenteeism: The phenomenon in which employees skip breaks and refuse to take days off even when they need them. Presenteeism can be just as damaging as absenteeism, as it often leads to widespread burnout.
4. Engaged Employees Drive Customer Satisfaction and Profitability
As noted above, low employee engagement levels can directly impact customer satisfaction. On the flip side, employees who are engaged want to drive company success by attracting more customers and delivering better service to those customers.
More satisfied customers mean more business, which in turn leads to higher profits. In fact, companies with highly engaged employees are 21 percent more profitable, according to some estimates. That should be proof that employee engagement isn’t simply an HR buzzword: It can make a genuine difference to your bottom line, which matters more now than ever.
5. Engaged Employees Become Spokespeople for Your Company
We’ve established that engaged employees have an enthusiasm for their company, and that enthusiasm is contagious. That means engaged employees can be great spokespeople for your company, particularly on social media, where they can reach both potential employees and clients by sharing their experiences with your organization.
Engaged employees talk positively about their employers, spreading the word to their friends and colleagues. This organic publicity helps your company build a strong reputation that can drive new sales and new hires alike.
After all, talented employees are looking for more than just a decent paycheck. They want to work for companies that value their employees. As they’re researching potential employers, they’ll come across glowing reviews from your engaged employees on Glassdoor, social media, and other sites. These sorts of messages are likely to get them excited about joining your company.
Despite the clear benefits of employee engagement — and the constant conversation surrounding the topic — only one-third of front-line employees and managers report their companies are making it a top priority.
Indeed, engagement may seem like a frill in the middle of a pandemic, but nothing could be further from the truth. As organizations scramble to shore up their bottom lines, engagement may be one of the keys to weathering the current crisis.
Stuart Hearn is founder and CEO of Clear Review.