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Why Is Employee Engagement Important? [Updated 2023]

By August 28, 2023October 17th, 2023No Comments

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 the success of any business?

Before we answer those questions, let’s give a little perspective.

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

There were usually a few students who were super motivated, a few who couldn’t care less, and then everyone else in between. 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 a highly engaged workforce are more successful because their employees are invested in the overall company goals and know they play a vital and well-defined role in achieving them.

Why Is Employee Engagement Important

Although the Covid-19 pandemic may have been a contributing factor, the percentage of engaged employees dipped in 2021 for the first time in over a decade. According to Gallup, employee engagement rates dropped 2% from 2020 to 2021. Not surprisingly, the percentage of employees who acknowledged they were actively disengaged rose 2% each year in the same time frame. Numbers don’t lie.

While these may not seem like drastic changes, employee engagement has a direct effect on a company’s profitability. If you want to run a successful business, this is not something you want to place on the back burner.

Let’s take a deeper dive into employee engagement – what it 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, probably more so in the last few years. But do we fully understand what it means and what kind of benefits it offers?

Let’s start by pointing out that employee engagement is not synonymous with “employee happiness” or “job satisfaction,” but it’s certainly an important component of both. 

Chances are, if you asked your team to define employee engagement, they’d offer quite a variety of interpretations. And that’s because each person has their own perspective and idea of what gets and keeps them engaged.

Simply put, employee engagement is the level at which a company’s employees are personally invested in the overall business goals, values, and success. Engaged employees come to work for reasons bigger than a paycheck. They show up because they feel connected to the work they’re doing, are in alignment with the company’s 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 all the stats that keep your business in the green – revenue, work culture, job performance, retention, absenteeism, and employee satisfaction, just to name a few. Engaged employees are more productive, curious, 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 employee engagement in the day-to-day operations.

Reasons why employee engagement is important


1) Employee engagement improves customer satisfaction

Think back to a time when you had a really unfortunate customer service experience. Now, think about a time when someone went the extra mile to provide you with an exceptional customer service experience. Chances are, in the latter example you encountered a highly engaged employee.

How you can tell? They’re 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

Oftentimes, engagement is a positive byproduct of success. Whether it’s personal or professional success, this stronger connection to work means that employees can level up their accomplishments into new opportunities when they arise. Engaged employees know that their work is important and their contributions are valued. Maintaining high engagement levels supports your business’s bottom line because engaged employees:

  • Produce higher-quality work.
  • Are more productive.
  • Have a personal stake in the company’s financial success. 

All of which can lead to higher profits. Win/win!

3) Employee engagement improves employee retention

According to Gallup, in the first half of 2021, 74% of disengaged workers were actively looking for new job opportunities, while only 30% of engaged employees were trolling the job boards. This stat supports the theory that engaged employees are satisfied and invested in their work, and are much less likely to leave. Ensuring your employees are effectively engaged is a great way to decrease employee turnover and retain your top talents.

4) Employee engagement increases productivity

When employee burnout increases, productivity decreases. A disengaged employee is more likely to spend their time scrolling social media than checking off their to-do list. On the flipside, Gallup found that highly engaged groups experienced a 17% increase in productivity. Companies experience higher productivity levels because engaged employees are self-motivated and have a desire to make valuable contributions.

Employee engagement is important!

5) Employee engagement promotes innovation and critical thinking

Engaged employees are passionate, energetic, and committed. What better recipe for innovative and critical thinking? Employees who aren’t engaged tend to skate by, just doing the bare minimum asked of them. Highly engaged employees see beyond their daily tasks and tend to think more strategically about how their role and team can evolve to meet changing business needs. They’re also more likely to feel empowered to think outside the box when problem-solving because their leadership and culture value their skills.

6) Employee engagement contributes to your larger company culture

Highly engaged employees impact your company culture in so many positive ways. They believe in the company’s core values and have a genuine desire to represent those values. They also influence their colleagues and drive the direction of the culture from the inside – your “boots on the ground,” so to speak. The more you include your employees in the decisions and structure of the organization, the more invested and engaged they’ll become because they’ll understand that their voice matters as much as their talents. 


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, it’s not hard to tell if your employees are connected to their work. Whether your team is working remotely or in person, here are five factors to evaluate when digging deeper into your employees’ engagement levels. 

Engaged employees:


  • Clearly understand their role and how they positively contribute to the success of their team and the overall organization.
  • Are passionate and self-motivated individuals who go above and beyond their job description to make sure their team succeeds.
  • Are personally invested in the company goals and believe the company is invested in their individual success as well.
  • Feel connected to their organization and colleagues, and are genuinely passionate about the work they do.
  • Actively contribute to supporting a positive and healthy work environment that aligns with the company culture and core values.


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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 are inspiration, motivation, and connection. If you’re unsure where to start, go to the source and send out an employee engagement survey to get real feedback on what activities most interest them.

Q: What are the major components of employee engagement?

  • A: The major components of employee engagement are 1) instilling a sense of belonging, 2) showing that leadership truly cares about their employees’ well-being & success, and 3) fostering a company culture of recognition and appreciation.

Q: Why is employee engagement important for team performance?

  • A: Employee engagement is important for team performance because it motivates each team member to give their best effort. 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, are more likely to produce high-quality work in an efficient manner.

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