Why Employee Engagement is Vital for Business Success

employee engagement

This article explores the power of employee engagement important you, why it is vital for business success, and how organizations can create a culture of engagement.

What is employee engagement?

Engaged employee or employee engagement refers to the commitment, discretionary effort, passion, and enthusiasm that employees have for their work and their organization. Engaged employees are motivated to perform their best, take pride in their work, and feel loyal to their company. They are fully involved in their job and the success of the organization, and they are willing to go above and beyond what is expected of them. Employee engagement is essential because it significantly impacts business success, including increased productivity, improved customer satisfaction, employee retention, reduced turnover, and higher profitability.

Why is employee engagement important?

Studies show that employee engagement initiatives increase work ethic and problem-solving skills, motivates employees, promotes faster growth and development, and encourage managers to keep employees longer.

The following factors are some key benefits of employee engagement and have a measurable impact on the organization's success:

Increased performance – Research by the society for human resource management has shown that engaged employees are more likely to assist the company in reaching its goals.

Higher retention rates: According to the Oxford Handbook of Positive Psychology at Work, an engaged employee is 87% less likely to leave the company. As a result HR professionals can reduce employee turnover costs.

Free Download: Employee Turnover calculator excel template

Increased revenue – A research by Gallup concluded that highly engaged employees contribute to 21% higher profitability, and those teams with the highest employee engagement and software also experience a 41% reduction in absenteeism and 59% lower turnover - better business results all around.

Increased Customer loyalty – Employee engagement is essential because it is vital to building and maintaining customer loyalty. Gallup also found that improving the employee experience and increase employee engagement also leads to a 10% rise in customer ratings and a 20% rise in sales, which can result in profitability. Engaged employees are more likely to provide exceptional customer service, anticipate customer needs, and create a positive customer experience. This can lead to better business outcomes due to increased customer loyalty, repeat business, and positive word-of-mouth referrals.

Boost employee engagement with these eight strategies

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Adopt a Bottom-Up approach

You start by laying the right foundation—not the roof! When it comes to any big decision within an organization, it's worth starting with your employees. Your employees should feel valued and  able to express their opinions and concerns through questionnaires and employee surveys. According to a recent study, one in six employees is so unhappy that they're looking for a new job. The best way to engage your employees is through a complete engagement survey asking for their opinions.

Promote Two-Way Communication

To promote employee engagement, it is first necessary to keep employees in the loop. Employee engagement rates are likely lower when organizations act secretively and only divulge information to employees who need to know. Having a transparent work environment helps employees understand how corporate decisions will affect their work and how to handle a situation when one arises.

 Employees feel they should be encouraged to share their concerns, not ignored, and communication should be two-way. It is generally believed that top business leaders keep their doors open and don't exploit "top-secret" information.

Encourage community participation

Organizations are communities where each member contributes something to the whole by fulfilling a specific task. It is possible to foster this sense of community among your employees through any engagement activity, whether you organize a big annual event or take them out for lunch. 

Maintaining a certain level of equality and impartiality within an organization despite hierarchy is crucial. The organizational structure of new-age technology startups often mirrors this philosophy. Maintaining this new business approach can be challenging but can also result in highly engaged employees.

Employee recognition

It is estimated that two in three employees are unhappy with the recognition they receive for their work. This less positive attitude will result in most employees being unable to contribute to the company's success and displaying unproductive behaviors. In addition, professionals with high training, employee experience, and professionalism are always looking for new hires and better opportunities.

This is why a recognition-rich corporate culture where incentives and perks are provided for good work is beneficial. You can show employees how much you value their efforts by offering them an appreciation certificate and words of encouragement. It's vital to align recognition with the organization's mission, goals, and philosophy. The goal is to get human capital moving in the right direction. 

Invest in Personal Growth

An important part of human capital management is nurturing. Every human asset you acquire for your organization must be nurtured and polished to contribute to its long-term success. It's not just a matter of investing in the future of your employees but also in their loyalty when you offer proprietary training programs or sponsor higher education.

Employees love working for a company that supports their career goals and adds value to their personal lives. Do you want to keep your top performers? Don't act selfishly or dismissively. You and inspired employees will benefit if you ensure their personal growth.

Hire Competent Managers

The managers are your secret weapon for enhancing employee engagement. They serve as the middlemen between your board and your employees. A typical employee does not often work with the top executives, if at all, but has daily contact with their immediate bosses. It depends on how a manager handles them and whether they feel secure, angry, or ignored. 

Do they know how to handle employees? Is there anything they can do to improve? While organizations can educate their managers on engaging employees better, hiring a competent manager is always the best first step. Verifying that the candidate has the professional background necessary for the challenging position is important. 

Create a Sense of Purpose

There are no robots among employees; there are human beings and other employees. Most organizations still treat employees as commodities that can be bought at a specific price rather than as human resources that can be utilized. Your employees are not just another part of the production but potential champions of your values and principles.

The hefty paycheck is undoubtedly helpful, but if an employee comes to feel an emotional attachment to the organizations' culture, they are far more likely to invest personally and contribute significantly. Taking the time to acknowledge your employees' contributions is one way to accomplish this. Tell them how it contributes to their personal life and the organization's business goals. Companies must start treating their employees with respect.

Sketch a Success Roadmap

Most of this applies to organizations that hire millennials. It is not enough for most millennials to go to work, do the work assigned, and then go home with a paycheck. Their focus is on where they will be in five to ten years. They must know that their role has good growth prospects.

A successful employee engagement strategy also involves mapping out a roadmap to success. The career counseling sessions or the clear career advancement path might be helpful to engage millennial employees. 

Useful Read: Millennial Work Ethic explained: Strategies for Loyalty and Engagement

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Who drives employee engagement?

The drivers of employee performance and team engagement combine the individual employee, their direct manager, the business outcomes, overall organizational culture, and the organization's forward Human Resources (HR) function. Here is a breakdown of each:

Role of leadership:

Leaders have a critical role in driving employee engagement by setting the tone and vision for the entire organization. They must prioritize employee engagement and make it a core value of the organization, establish policies and practices that promote employee well-being and foster employee engagement, and communicate effectively with employees to create a culture of trust and transparency.

Role of managers:

Managers are responsible for creating a positive work environment, setting clear expectations, providing regular feedback and recognition, doing performance reviews, and promoting employee growth and professional development. When managers are supportive, empathetic, and actively engaged with their teams, employees are more likely to be motivated and engaged.

Role of employees:

Engaged employees take ownership of their work, are committed to the organization's mission, and feel fulfilled and purpose. They are proactive in seeking growth and professional development opportunities and demonstrate a willingness to go above and beyond to contribute to the organization's success.

Role of HR:

The HR function is critical in driving employee engagement by implementing policies and practices that support employee well-being and using employee engagement tools, providing training and development opportunities, and fostering a culture of inclusion and diversity. HR professionals also play a role in measuring and monitoring the drivers of employee engagement, using employee engagement strategy and levels, and providing feedback to leaders and managers to help them improve employee engagement strategy and levels.

How to create an employee engagement action plan?

Head of department standing and talking to smiling young employees in office-1

Creating an employee engagement action plan is critical in improving and maintaining employee engagement in an organization. Here are five steps that can be taken to create an effective employee engagement action plan:

  • Review survey results: Start by reviewing the results of any employee engagement surveys or assessments. This will help you identify areas where employees are most engaged and areas where there is room for improvement.

  • Choose focus areas: Based on your review of the survey results, choose one or two areas to focus on for your action plan. For example, if employees report low recognition and feedback levels, you might focus on improving these areas.

  • Brainstorm solutions: Once you've identified your focus areas, brainstorm potential solutions to address them. This might include implementing a recognition program, providing regular feedback and coaching, or offering career development opportunities.

  • Make commitments: Once you've identified potential solutions, make commitments to implement them. It might involve setting specific goals, allocating resources, and assigning responsibilities to team members.

  • Communicate progress: Finally, communicate progress on your action plan to employees and stakeholders. Regularly share updates on the initiatives you're implementing, and be transparent about successes and challenges. Solicit employee feedback and make adjustments as needed to ensure you're on track to meet your goals.

By following these steps, organizations can create an effective employee engagement strategy and action plan that targets areas of weakness, identifies solutions, and improves employee engagement over time.

Useful Read: 6 Metrics to Measure Employee Engagement: The Employers Guide

How do you measure employee engagement?

You must first understand your own employee satisfaction and engagement situation to improve it. Is there a way to measure employee job satisfaction and team engagement? It is most efficient and accurate to conduct employee surveys to understand their work.

Three kinds of measuring employee engagement surveys

Employee engagement surveys

A comprehensive employee engagement survey gives leaders insights into employee engagement solutions at the organizational level. Survey questions should measure employee engagement in a scientifically valid way.

Pulse surveys

An employee pulse survey allows organizations to gather employee feedback on any topic at any time, in real-time. A time of transition, such as an acquisition or merger, a change in a company's mission or focus, or a change in the management structure, as well as the need for this, are all instances when this is especially important.

Useful Read: Employee Pulse Survey Questions for Actionable Insights

Employee lifecycle surveys

The employee lifecycle survey allows you to collect feedback from employees when they reach key career milestones. Examples include:

New Hire Survey: What are the opinions of new employees regarding your onboarding process? What was their perception after 30, 60, and 180 days? What is their outlook for the future? The right questions can provide insights that can help you engage your new hires now and in the future. 

Stay Survey: Why do employees remain at your organization? Why might they decide to leave? Does there exist a way to prevent it? Using questions such as these helps keep tenured employees engaged and thus prevents costly talent loss. 

Exit Survey: What led to an employee leaving your company? What impact did the turnover have on the remaining employees? Are you able to prevent others from going? You will gain valuable insight from exit surveys to help you engage your customers better.  


In conclusion, employee engagement is a crucial factor for the success of any business, regardless of its industry or size. Engaged employees are more productive and motivated and contribute to a positive work culture, improve customer satisfaction, and ultimately drive revenue growth.

Business leaders need to recognize the power of employee engagement programs and invest in strategies that prioritize employee satisfaction, not financial performance. This includes providing regular feedback, recognizing achievements, and offering growth opportunities to engaged employees. By doing so, businesses can further drive employee engagement and efforts to create a thriving work environment that benefits both the employees and the organization.

Topic: Employees
Carin Vreede

Written by:

Carin Vreede

With years of experience in the HR field, Carin has a lot of experience with HR processes. As a content marketer, she translates this knowledge into engaging and informative content that helps companies optimize their HR processes and motivate and develop their employees.


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