What Is Employee Engagement (and Why Does It Matter)?

Employee engagement is something you need to have a concrete strategy to manage. Having a strategy is especially important right now, as employers around the nation are having a tough time filling open positions. 

Employers are bearing the brunt of changes in the labor market brought about by the pandemic, and they have to act accordingly. 

Having an effective employee engagement plan depends on understanding what it really is and why it’s important. 

What is Employee Engagement?

At its core, employee engagement can help you drive retention, productivity, and performance. When you have engaged employees, they want to continue working for you. They’re also more dedicated to achieving goals. All of this means financial success can increase. 

There are some things that employee engagement is decidedly not. For example, it’s not employee happiness. 

It’s very possible for employees to be happy in the workplace without being engaged. Engagement is not empowerment, nor is it motivation. 

Employee engagement is the level of commitment employees have to the business and its goals. When an employee is engaged, they are enthusiastic and they tend to have a reasonably deep connection to their employer which translates to their efforts and behaviors at work. 

The difference between an engaged employee and one who is satisfied is that the satisfied employee will do the bare minimum. They will do their job accordingly and only within the confines of their role and what they’re compensated for. An engaged employee sees their role as more meaningful than just showing up to collect a check. 

Another interesting way it’s sometimes described is as a psychological contract, which again just means that the connection or relationships employees have with an employer goes deeper than doing work in exchange for money. 

Drivers of Engagement

By understanding what drives engagement, you are in a better position to then create a specific strategy. 

Some of the drivers of employee engagement can include:

  • Organizational drivers: These factors include leadership that wants to make it a great place to work, trust in leaders and a belief that the company will be successful. Other organizational drivers of engagement include employees understanding how they fit into the plans for the future and people who are valued as a critical resource. A company with engaged employees also invests in ensuring their success. 
  • Management drivers: When your employees have positive relationships with their managers and supervisors, it can significantly increase engagement. Employees need to feel supported, autonomous, and feel like they have the resources to do their jobs well. 
  • Other factors: Several other factors are part of engagement including communication, trust, respect and workplace culture. 

Why Employee Engagement Matters

Some of the reasons that employee engagement matters—a lot—include:

  • As we briefly mentioned at the start, when your employees are engaged it’s likely to increase your profitability. An engaged workforce is going to outperform one that’s not engaged. A Gallup study found companies that have engaged workers have higher earnings per share, and they also recover faster from economic downturns. 
  • Retention goes up with engaged employees. It’s expensive to lose an employee, and right now, there’s a high likelihood you’ll have a tough time replacing them. Engaged employees have lower turnover rates, and that keeps your hiring and recruiting costs down. 
  • While engagement isn’t the same as happiness, engaged employees do tend to enjoy being at work more. There’s more overall happiness in the workplace. Employees often want to be recognized for their achievements, and if you’re giving them praise and feedback for a job well done, they’re probably going to be happier and more productive. 
  • Speaking of productivity, there was a poll analyzing one million employees. That poll found teams with engaged employees outperformed organizations with less engaged employees by more than 200%. 
  • When your employees are committed to the larger vision of your company through engagement, they’re probably going to be more innovative. They’re working to excel instead of just getting through the day. 
  • Engaged employees are more likely to collaborate, which can help with innovation and corporate culture while also reducing potential conflict. 
  • Your employer brand will grow stronger the more committed and engaged your employees are. 

Finally, when you have a good employer brand and your employees are deeply engaged, you’re going to be able to attract more talented and productive employees in the future. You’ll likely have more continuity, including in challenging times.