Why Is Employee Engagement Important?

Companies worldwide are more concerned with increasing and maintaining high levels of employee engagement than ever before.

But why?

What exactly is employee engagement and why is employee engagement important to business success?

Before we answer those questions, let’s take a trip down memory lane.

Remember back in school when you were assigned a massive group project worth a good chunk of your grade?

There were usually some students who were super motivated, the students who couldn’t care less, and then everyone else in between who were relatively neutral. Think of employee engagement as a massive group project where every single member is actively engaged, producing quality work, and working collectively towards a common goal. According to Ken Blanchard and Scott Blanchard in Do People Really Know What You Expect from Them?,

“Connect the dots between individual roles and the goals of the organization. When people see that connection, they get a lot of energy out of work. They feel the importance, dignity, and meaning in their job.”

Companies with high a highly engaged workforce are more successful because their employees are invested in the overall company goals and know they play a vital, well-defined role in achieving them.

Why Is Employee Engagement Important

For the first time in over a decade, the percentage of engaged employees dipped this past year. According to Gallup, employee engagement rates dropped from 36% in 2020 to 34% in 2021. They also saw an increase in employees who were actively disengaged. This rate went from 14% in 2020 to 16% in 2021.

While these may not seem like drastic differences, employee engagement has a direct effect on a company’s profitability and is not something that can be placed on the back burner if you want to see successful business outcomes.

Let’s look ahead into the remainder of 2022 and explore a bit more about what employee engagement means, why it’s important, and what it looks like.

What is employee engagement and why is it important?

What is employee engagement and why is it important?

We’ve all heard the phrase employee engagement before, increasingly so during the last few years, but do we fully understand what it means and what the benefits of employee engagement are?

Chances are if you asked your team to define what employee engagement is, you’ll get quite a few variations of definitions in response. Let us start by pointing out that employee engagement is not equivalent to employee happiness or job satisfaction, which is another distinct work culture value.

Employee engagement is the level at which a company’s employees are personally invested in the overall business goals, values, and performance. Engaged employees come to work for reasons beyond a paycheck. They show up because they feel connected to the work they’re doing, have alignment with the company vision, and are personally invested in the company’s success.

Fostering high levels of employee engagement is so important because it has a direct effect on revenue, work culture, job performance, retention, absenteeism, and employee satisfaction. Engaged employees are more productive, inquisitive and connected which creates a positive work culture and employee experience. Since employee engagement affects so many aspects of a business, it’s vital that leadership is actively and continually prioritizing the importance of employee engagement in all that they do.

Let’s now dig a bit deeper into the specific reasons why employee engagement is important to an organization’s success.

Reasons why employee engagement is important


1) Employee engagement improves customer satisfaction

Think back to a time when you had a really unfortunate customer experience. Now, think about a time when someone went the extra mile to provide you with an exceptional experience? Chances are in the latter example you encountered a highly engaged employee. Engaged employees are passionate about their work and that passion directly translates into how they interact with customers. They portray a positive image of your brand to the consumer which will result in a happier and more satisfied customer.

2) Employee engagement contributes to your business’s bottom line

Many times, engagement stems from success. Whether it is born from personal or professional success — this stronger connection to work means that employees can harness that accomplishment into new opportunities. Engaged employees know that their work is important and their contributions are valued. Maintaining high engagement levels helps your business’ bottom line because engaged employees produce higher quality work, are more productive, and have a personal stake in the company’s financial performance, which can lead to higher profits.

3) Employee engagement improves employee retention

According to Gallup, 74% of actively disengaged workers in the first half of 2021 were actively looking for new job opportunities. Compare that to only 30% of engaged employees looking for job openings. This stat shouldn’t come as a surprise. Engaged employees are invested and satisfied with their work and therefore much less likely to seek opportunities elsewhere. Ensuring your employees are engaged is a great way to decrease employee turnover and retain top talent.

4) Employee engagement increases productivity

With employee burnout levels increasing in the past couple years, you may have seen a dip in productivity as a result. A disengaged employee is more likely to spend their time scrolling social media than dedicating substantial effort to the work. On the flipside, Gallup found that highly engaged groups experienced a 17% increase in productivity. Because engaged employees are self-motivated and have a desire to make valuable contributions, companies experience higher productivity levels.

Employee engagement is important!

5) Employee engagement promotes innovation and critical thinking

Engaged employees are passionate, energetic, and committed. What better recipe for innovation and critical thinking? Employees with low engagement tend to skirt by doing the bare minimum required in their role. Highly engaged employees see beyond their daily tasks and are able to think strategically about how their role and team can innovate and evolve to meet business needs.

6) Employee engagement contributes to your larger company culture

Highly engaged employees contribute to your overall company culture in a positive way because they believe in the values the company has set forth and have an authentic desire to embody those values. It’s important to include your employees when creating or changing company mission statements so they feel connected to them and know they have a voice in molding the company culture. Employee engagement efforts should also be included when mapping out your company initiatives and team goals so it becomes embedded into the business’ success.


What does positive employee engagement look like?

There are a number of ways you can identify strong employee engagement at your organization. These symptoms can be very clear or more under-the-radar but if you look closely — you should be able to see when individuals feel close to their work and their company. To get you on the right track, we have listed five clear examples of positive employee engagement with regard to in-person and remote employees.

1 – Engaged employees clearly understand their role and how it positively contributes to the organization.

2 – Engaged employees are personally invested in the company goals and feel that the company is invested in their individual success as well.

3 – Engaged employees are passionate and self-motivated individuals who go above and beyond their defined role in order to help their team succeed.

4 – Engaged employees feel connected to their company and colleagues and are genuinely excited about the work they do.

5 – Engaged employees actively contribute to creating a positive work environment that aligns with the company culture and values.

People Also Ask These Questions About Why Employee Engagement Is Important

Q: What is the purpose of employee engagement?

  • A: The purpose of employee engagement is to ensure employees are personally connected to the overall company success and have a clear sense of how their role contributes to that success.

Q: Are they key objectives for planning an employee engagement activity?

  • A: The key objectives to keep in mind when planning an employee engagement activity is to inspire, motivate and connect with your employees. If you’re unsure where to start, go to the source and launch an employee engagement survey to discover what activities most interest them.

Q: What are the major components of employee engagement?

  • A: The major components of employee engagement are instilling a sense of belonging, showing that leadership truly cares about their employees’ well-being & success, and fostering a company culture of recognition.

Q: Why is employee engagement important for team performance?

  • A: Employee engagement is important for team performance because it helps each team member feel motivated to do their best work. It also helps team operations run smoother since everyone is working collectively towards a common goal.

Q: How does employee engagement affect productivity?

  • A: Employee engagement affects productivity levels because engaged employees are focused and passionate about their work and therefore more likely to produce high-quality work in an efficient manner.

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