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Survey after survey tells us two workplace truths: Employees are generally not engaged with their work. And companies with high engagement levels outperform their peers.

It’s clear that if you want to become a top-performing company, you’ve got to improve engagement. So, let’s break down the key benefits of employee engagement, how it impacts business growth, and the keys to improving engagement.

The Benefits of Employee Engagement

Comparing the companies with the most engaged employees to those least engaged shows stark contrasts. According to Gallup, top-performing companies display a host of benefits, including:

  • 81% lower absenteeism
  • 18%-43% lower turnover
  • 41% fewer quality defects
  • 18% better sales productivity
  • 28% less shrinkage

Engaged employees produce greater customer loyalty. More importantly, they produce 23% gains in profitability, including higher earnings per share. Conversely, it’s estimated that disengaged employees cost U.S. organizations as much as $550 billion per year. Worldwide, it adds up to more than $8 trillion in lost revenue — about 9% of total global gross domestic product (GDP).

There are also less tangible — but crucial — benefits organizations get with motivated, engaged employees.


The business environment is constantly changing. Consumer habits and preferences evolve. Technology is advancing at a rapid pace. New competitors and offerings hit the market. We’ve seen significant disruption across a wide range of industries over the past few years and companies must innovate to remain competitive.

Employee engagement spurs innovative and creative thinking to enable organizations, products, and services to evolve and meet changing environments.

Managing Change

Business transformation is top of mind for most business leaders in 2023. From restructuring to retooling to redefining business processes, the average employee experienced 10 significant changes during the past year per Harvard Business Review.

While change is now the norm, it’s taken an increasing toll on employees. Gartner tracks employees’ willingness to support change in the workplace over time. In 2016, 74% of employees supported such change initiatives. Today, just 38% do.


Organizational culture plays a significant role in employee engagement and vice versa. A strong workplace culture keeps employees engaged. Once engaged, employees help drive and maintain the culture.

Culture impacts so many areas:

  • Motivation: Engaged teams are simply more motivated. A survey by the American Psychological Association reported that employees who feel valued by their employers are three times as likely to be motivated.
  • Collaboration: Engaged employees are more likely to collaborate and work together effectively as a team. Trust and relationships lead to better communication and workflow.
  • Ethics: More engaged employees do the right thing — even when no one is looking. 
  • Sense of purpose: An engaging culture gives employees a sense of purpose and connects work to outcomes. This helps employees understand how their work matters and aligns with company goals.
  • Participation: Companies with strong cultures value contributions and ideas from all employees, leading to greater participation.

When employees understand the mission and their role and feel valued, it drives engagement and job satisfaction. 

Compound Impact

Organizations that have highly engaged employees also see long-term benefits. New hires are more likely to be engaged when they see their peers doing so. This creates a compounding effect that encourages greater engagement across enterprises. In other words, they perpetuate a culture that creates future engagement.

The more employees are engaged, the more it reinforces engagement as the norm. This can create a significant competitive advantage. Competitors may replicate products or services. But an engaged workforce is much harder to create.

Improving Employee Engagement

Despite the benefits, HR teams have a ways to go to make sure their workforce is actively engaged. Less than a fourth of employees report active engagement with their work globally and 34% in the U.S. — and that’s at a record high level per the Gallup World Poll. 

While engagement levels rebounded post-pandemic, the majority of employees in 2023 are “quiet quitting.” Workers continue to put in minimal effort to keep their jobs, but aren’t willing to go the extra mile.

Business leaders know how important engagement levels are. But there’s still a disconnect among employers when it comes to taking proactive steps to improve engagement. Of business leaders, 90% acknowledge that improving employee engagement is crucial to success, but only a quarter have a strategy in place.

HR Strategies to Improve Engagement

Keeping employees engaged is no easy task. It takes a consistent and proactive approach to create the right environment. Four key areas are key to engagement:

  • Community: A sense of belonging
  • Opportunity: Opportunities for growth and development
  • Purpose: Knowing that their contributions matter
  • Balance: Measure of autonomy and flexibility

Engaged employees rate their employers highly in these four areas. So, what does it take to achieve these goals? Here are some of the key HR strategies to improve engagement.

Open Communication and Transparency

When employees feel well informed about company strategies and changes, they are more invested in the organization’s success. Leaders should prioritize frequent communication and encourage two-way dialogue. Regular discussions — especially during periods of change — are crucial to employee understanding.

Only 36% of employees say they have high trust in their company. Half say they struggle to find the information they need to do their job. Communication and dialogue help overcome these challenges. Rather than top-down mandates, involving employees in decision making, discussing options, and addressing concerns can significantly impact engagement.

Communication requires setting clear goals and ensuring employees understand how their job relates to company goals. Clear objectives, tied to strategic priorities, help keep team members focused. By keeping management focused on outcomes, employers can grant employees greater autonomy to achieve goals and create greater engagement.

Growth and Development

Employees see change coming. There’s a constant barrage of stories in the news these days, such as: 

It’s hard to be fully engaged when you’re worried about losing your job.

Employees today want to ensure they have the skills needed for the future. By creating a continuous culture of learning, employers can help prepare their workforce for changes ahead and improve engagement. Job seekers are actively seeking environments where growth and development are valued.

Many of the companies with the most engaged employees create career paths for key employees, exposing them to opportunities to learn new skills to advance their careers.

Employee Recognition

Engagement increases when employees feel valued. Organizations and managers that recognize employee contributions and accomplishments see increased productivity. When recognition and rewards are personalized for employees, it helps reinforce the value employees bring to their organization. In turn, this builds a strong workplace community and sense of purpose.

Deloitte reports that organizations actively recognizing employees report higher engagement, productivity, and performance versus those that don’t.

Work-Life Balance

According to job site Zippia, 72% of job seekers say a work-life balance is a very important factor when choosing a job. That should not be a surprise to HR leaders. Burnout levels among employees have been at record levels. Worker shortages, unfilled jobs, layoffs, and wage concerns have all taken a toll.

Companies today need to help employees achieve some semblance of work-life balance. This often means flexibility in scheduling and focusing more on output than hours.

For many companies, this means modernizing pay, policies, and benefits. Hybrid work arrangements and remote work have become more prevalent over the past few years as have programs focusing on employee wellbeing.

Feedback and Listening

The days of the annual review are over. It’s not that these annual discussions about work performance and career goals are no longer important. It’s that they cannot be the only time these types of discussions take place. Yet, half of employees report they only get an annual review and they crave more frequent feedback. Of employees, 63% said they want in-the-moment performance feedback.

When employees get regular feedback, it helps keep them engaged in the work and helps them grow in their roles. Not only does this create an ongoing dialogue, but it also demonstrates an interest in employee development.

Ethical Leadership

Employees also want to work for organizations that act ethically. Workers notice when managers and leaders don’t subscribe to company values and act with integrity. HR teams need to ensure managers are acting fairly and making decisions free of bias or self-interest. 

At the same time, employers need to follow through on commitments to their employees.

Employees today are more concerned about social responsibility, diversity and inclusion, equitable treatment, and sustainability. They want organizations to take a stance and live up to the standards they aspire to achieve.

Improving Human Capital Management

Resourcing Edge is an industry leader in human capital management. Resourcing Edge has proven workplace solutions for HR, benefits, and employee engagement that can help you create a culture that leads to significant growth.

Contact the Resourcing Edge team today to discuss your human resource capital management needs.



Jami Beckwith

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