The 7 biggest benefits of better employee engagement

Globally, over 75% of employees are ‘disengaged’ from their work. They are less motivated, less present, and less productive as a result. Unsurprisingly, therefore, they’re also more stressed, more frequently absent, and more likely to leave.

While an unhappy, unproductive workforce is never an ideal state of affairs, it poses outsize risk in our current climate. Far from a glorious post-pandemic bounce back, businesses are instead enjoying an ongoing operational bin fire fuelled by increased cost pressures, labour shortages, and geopolitical turmoil. There has seldom been a worse time for employees – especially indispensable frontline workers – to be working well below their potential capacity.

But with competing priorities, tight budgets, and a low appetite for new large-scale projects, it can feel hard to justify a concerted push for better employee engagement.

To convince the nay-sayers and help you on your journey, we’ve put together this list of seven proven benefits of high employee engagement – to your workers, your HR function, your wider organisation, and to your bottom line.

For ease, we’ve broken down the research we gathered into two broad categories below: benefits to employees, and benefits to employers. Employee engagement is one of those rare initiatives where everyone wins – workers are happier across the board, work more efficiently, and are more profitable to their employers.

Sounds great, but it gets better. Deployed effectively, employee engagement creates a positive feedback loop: highly engaged employees are happier and more motivated, which leads to better company performance, which leads (or should lead!) to more resources for employee engagement, which leads to better engagement, which… you get the picture.

As a result, all of the advantages we’ll cover benefit both workers and their employers.

At Flip, we’re lucky enough to see this feedback loop in action every day as we talk to our customers – both frontline employees and their HR, Internal Comms, and IT teams – about the improvements they’ve seen with our employee app.

Everyone knows the difference it makes when you’re passionate about what you do. In addition to banishing the dreaded Sunday Scaries™, research demonstrates that…

Benefit #1: High employee engagement reduces burnout (but there’s a catch!)

Per Gallup, disengaged ‘quiet quitters’ are ‘more likely to be stressed and burnt out than engaged workers because they feel lost and disconnected from their workplace.’ In addition to making them ‘minimally productive’, this burnout takes a toll on their personal lives. The other things that make up a life – friendships, relationships, family life, and hobbies – all suffer.

Interestingly, however, Yale research highlighted that higher levels of engagement can actually increase the risk of burnout – particularly when high commitment is coupled with excessive demands and limited resources amongst what HBR terms the ‘engaged-exhausted’ employees.

This serves as a reminder that getting the most out of your employees goes beyond increasing their motivation pure and simple. Instead, employee engagement initiatives require a holistic approach that includes better improved resource management and upgrades to ways of working.

Benefit #2: Engaged employees are happier in their private lives

Research conducted by psychologists at Kansas State has shed light on the link between work experiences and employees’ personal lives.

The study reveals that engaged employees who approach their work with enthusiasm, commitment, and active involvement tend to experience greater happiness and satisfaction in their private lives.

While correlation is not always causation, the researchers note that ‘individuals who were engaged in positive experiences at work… perceived themselves as better able to deal with issues at home, became better companions, and became more effective overall in the home environment.’ They even found this effect when controlling for workload.

The researchers do, however, distinguish between ‘positive professional engagement’ and ‘workaholism’, noting that being excessively consumed by work has been shown to increase the likelihood of conflict in the home.

Benefit #3: Engaged employees have better career opportunities

In another positive feedback loop, engaged employees perform higher, and higher-performing employees have better career prospects, which increases engagement.

From the company’s side, providing good career prospects increases employee engagement – McKinsey has found that the growth potential of a job beats pay, manager, and even job security on a list of workers’ key priorities.

Interestingly, their report notes that this factor is frequently under-acknowledged, with job growth topping the list of factors that are judged ‘significantly more important by employees than employers’. This signals that career growth is not just a benefit of better employee engagement, but also an under-utilised engagement strategy.

What are the benefits of engaged employees for companies?

We’ll get straight to the point: disengaged employees are unproductive employees. That means absenteeism, presenteeism, understaffing, unhappy customers, clock-watching, and paying more for less work done.

It’s little surprise, then, that investing in employee engagement improves business outcomes across numerous KPIs (and yes, that includes cold hard cash)...

Benefit #4: Engaged employees take fewer sick days

Back up top in benefit 1 we mentioned that higher engagement tends to lower burnout.

Correspondingly, high engagement reduces employee absenteeism – and we’re not talking about the odd day or two. In fact, Gallup’s 10th Employee Engagement meta-analysis found that highly engaged business units enjoy a whopping 81% difference in absenteeism.

Benefit #5: Employee engagement results in increased productivity

The same meta-analysis tells us that engaged employees are 14% more productive than disengaged employees.

This increase in productivity can be compounded further by opening up your internal communications channels to employee feedback, allowing workers to submit their own improvement initiatives that streamline processes, conserve resources, and ultimately allow them to do their job more effectively and with less hassle.

After the introduction of our employee app Olaf Giesen, CEO at Europart, reported:

Benefit #6: Companies with committed employees enjoy higher customer satisfaction and profitability

Let’s be real: the most compelling argument for investments into employee engagement is that they put more money back into the coffers.

Companies with high employee engagement achieve…

• A 10% difference in customer ratings

• An 18% difference in sales

• An increase in turnover between 18 and 43%

• Up to 3 times higher profit margins than their low-engagement peers.

• 21% higher profitability

Benefit #7: Engaged employees not only leave the company less often, they also help with recruiting

Engaged employees are less likely to leave their company than disengaged employees – 87% less likely according to the Corporate Leadership Council.

But the HR benefits of employee engagement don’t stop at employee retention. Highly engaged employees also aid recruitment, with 30-50% of all positions being filled via referrals from existing companies. These recommendations are worth their weight in gold:

• On average, the cost per hire from employee referrals is $1,000 lower than other sources.

• Referred hires stay at the company for 70% longer than other employees.

With well over a million unfilled vacancies in the UK as of early 2023, these benefits to both hiring and retention are hard to pass up.

But word to the wise: referrals don’t come for free. Given that employees are honest with their network, businesses can’t hide behind appealing job ads and kindly interviewers in lieu of really engaging their existing workforce.

In order to capitalise on the benefits we’ve listed here, businesses need to make a concerted effort to improve their employee engagement levels.

The first step is to assess and measure your current levels of employee engagement.

How you do this can vary and may take into account a variety of indicators. For example, you might combine hard metrics like your retention rate, absenteeism, and/or employee Net Promoter Score (eNPS) with more anecdotal or qualitative information, supplemented with benchmarking tools like those from Gallup.

Once you’ve established this baseline and identified any areas that need particular attention, you can move onto building an employee engagement strategy. Your strategy should cover off the 6 key factors that drive employee engagement.

Key employee engagement factors

How engaged a workforce is depends on factors that fall into these six key themes:

Factor #1 – Meaning and significance

It’s little surprise people don’t like pointless ‘busy work’, but workers also tend to favour jobs that feel meaningful or provide a positive social or environmental impact.

Factor #2 – Autonomy

Workers are happier and more engaged when they feel they have some level of sway and autonomy at work – like when they are included in decision-making or setting priorities.

Factor #3 – Competence

Everyone has their talents, and a team is stronger when everyone can play to their strengths. Workers are more motivated when their unique talents, skills, or competencies are being used to benefit the team.

Factor #4 – Wellbeing and appreciation

Feedback, praise, and development goes a long way to improving employee engagement. This could be from managers, supervisors, and even colleagues. According to HBR, recognition and gratitude are even more motivating to workers than financial incentives.

Factor #5 – Conditions

In the shock news of the century (!), good working conditions make workers happier and more engaged. This might look like flexibility, work-life balance, and manageable workloads. Gallup has found that employees with a reasonable workload are 2.6 times more engaged.

Factor #6 – Remuneration

When engagement means hard work and emotional investment, it’s no surprise that workers will struggle to meaningfully engage with a role that pays them a pittance. Fair pay expresses appreciation and incentivises workers to stay.

For some more ideas on what these factors look like in practice, check out our article 31 ways to improve employee engagement.

Employee engagement and internal communication

Employee engagement programmemes are likely to sit within the remit of HR in our current era of labour shortages. But the job of making frontline workers feel heard, trusted, appreciated, fairly compensated, and able to grow with the company is an organisation-wide effort.

For businesses with fragmented frontline workforces especially, effective comms across the organisation are a critical component of keeping employees informed, enabled, and engaged.

To help guide businesses on that mission, we built Flip. Our all-in-one app provides an employee platform in your pocket, enabling transparent communication regardless of location. Designed specifically for deskless workers whose engagement is so frequently overlooked, Flip enables frontline employees and their employers to:

• Exchange news, information, and documents from anywhere

• Receive company updates and chat in a GDPR-compliant manner

• Share ideas and give feedback

• Create and respond to surveys

• Submit sick leave, holiday requests, etc.

• View shift schedules and swap shifts

Though budgets are tight right now, it’s not the time to be neglecting the wellbeing, motivation, and engagement of frontline employees.

Its benefits include lower burnout, happier private lives, and better job prospects for employees. Their employers can expect higher productivity, happier customers, lower absenteeism, and increased worker retention. Add the profitability research into that already heady combo and you’re looking at a golden ticket to better performance.

Explore more Flip articles for further insights on how to reach, engage, and transform your frontline workforce.