Why is employee engagement so important? Here are 7 big reasons

By Bita Taghavi-Stevens

Go back just three years and employee engagement was more of a nice-to-have than a serious business fundamental. Now it’s recognised by most employers for what it is: a critical factor for long-term success. Why is it so important? Here are our seven big reasons…

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What do we mean by employee engagement?


Happy, enthusiastic, satisfied, energised, passionate; what exactly does it mean for an employee to be ‘engaged’?

Ultimately, engaged employees can be defined as those that are happy to come to work in the morning. They’re passionate about their role, believe in the company’s goals, and see the value in what they do.

Crucially, they’re emotionally and intellectually invested in their work – not just because they’re paid to be there, but because they care.


Why is it so important?


Let's take a look at seven big reasons...


1. You’ll increase productivity


You’ve heard it before, but it’s worth saying again: productivity is inextricably linked to engagement.

According to Gallup, high employee engagement equates to a 23% increase in profitability. Why? Because engaged employees put more effort into their work.

When staff feel valued, invested in their role, and committed to your organisation’s success, they naturally work harder – and more efficiently – to meet their goals and targets.

Top tip: One of the simplest, most effective ways to boost productivity through engagement is by giving your employees more responsibility, challenges, and autonomy. You’ll make them feel more valued and, crucially, more invested in their role.


2. You’ll reduce absenteeism


We’ve all had jobs where we just don't want to go in. This might translate to a couple of ‘sick days’ a year per disengaged employee, but when you consider that 85% of employees are not actively engaged at work, this soon adds up to a lot of time and money.

And now that many employees work remotely or in a hybrid way, you might not even be able to spot when someone’s ‘silently’ absent until it's too late.

By contrast, engaged employees are highly unlikely to be absent unless they’re genuinely unwell or on annual leave. If you like your job and feel committed to your company and coworkers, why would you take days off for no reason?

Active engagement brings with it a strong sense of being connected and accountable. In fact, when employees are engaged, absenteeism is reduced by up to 41%.

Top tip: Boost motivation and job satisfaction by encouraging positive coworking relationships and making your employees feel like stakeholders. People care about people, so building team morale is an effective way to combat indifference and disengagement.


3. You’ll have a healthier workplace culture


The relationship between workplace culture and employee engagement is a circular one.

By having an employee-centric culture, you’ll significantly increase employee engagement. Employees are more likely to feel a sense of belonging, which will make them feel empowered and happy. This, in turn, means your employees will be living and breathing your workplace values; exemplifying a culture of engagement, productivity, and belonging.

And this is crucial in the battle for better engagement – and retention. A recent survey by McKinsey found that more than half of employees (51%) who left their jobs in the second half of 2021 said they lacked a sense of belonging.

Top tip: Focus on creating an employee-centric culture. Prioritising wellbeing, asking for feedback (and acting on it), and offering learning and development opportunities, will all help to foster an employee-centric, engagement-boosting culture.


4. You’ll hold on to your best people and reduce turnover


When you have good productivity, reduced absenteeism, and an employee-centric culture, you get engaged, motivated employees who want to stay. Simple!

This translates to fewer interruptions in workflow, less money and time wasted on recruitment and training, and stronger coworker relationships.

Top tip: Conduct regular ‘stay interviews’. Every 3-6 months, ask your employees why they like working at your company and what’s keeping them there. If an employee is showing signs of disengagement, you might be able to do something about it before they start looking for other jobs.


Looking for strategies to boost employee engagement? Click here to see our full list of solutions-focused Masterclasses.


5. You’ll have a better team with a better performance


Employee engagement is infectious. Just as disengaged people can affect morale and mood, engaged people motivate and energise each other to perform better – so you don’t just get better individual performance, you get better team performance. And this doesn’t just mean hitting targets.

When your team is actively engaged, it has a huge impact on areas like communication and collaboration.

Top tip: Boost whole team engagement by setting team challenges, away days, and exciting team rewards.



6. You’ll boost innovation and creativity


Engaged people are more likely to come up with creative ideas and solutions. Why? Because they care. If you don’t feel invested in your role or the organisation, why would you bother trying to find solutions to problems?

From generating an idea to seeking organisational support and then actually implementing an idea, innovation takes time, commitment, and a fully invested attitude – all the things that come with engagement.

And it also works the other way. Encouraging creativity and innovation is a great way to engage your employees and let them know that you value their ideas.

Top tip: One of the best ways to improve engagement is by promoting a culture of innovation. Make innovation one of your core values and give your employees platforms to share ideas, brainstorm, and collaborate with each other to find solutions.



7. You’ll improve customer satisfaction


Engaged employees don’t just perform better in terms of targets. They have a holistically more focussed, positive mindset than less engaged employees. This makes them an invaluable component of your brand image and PR.

According to Gallup, high employee engagement increases customer loyalty by 10%. This is because engaged employees are more likely to interact with your customers in a way that leaves them feeling satisfied and valued. Satisfied customers stay loyal – and they’ll tell other people about their positive experience with your company.

Top tip: Apply this philosophy to your employees. How can you improve their satisfaction and win their loyalty? How do you make them feel valued and listened to? The best way to find out is by conducting regular employee satisfaction surveys, so that you can find out what employees want – and act on the feedback.


Even though we've narrowed it down to seven points, it’s hard to think of an area of business that isn’t impacted by employee engagement. That’s because your company is your people. If they’re disengaged, you’ll never achieve your full potential for growth or profitability. But if they’re actively engaged? The possibilities for growth, development, and transformation are endless.


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