Why Is Employee Engagement Important?

Key takeaways

Employee engagement is important to company performance, customer satisfaction, employee retention, and workplace productivity.

• Employee engagement refers to the degree to which your employees feel committed to their workplace. 

• Employee engagement contributes to a company’s success by increasing profitability and customer loyalty, and decreasing absenteeism, quality defects, and safety incidents.

• You can increase employee engagement by offering employees relevant training, providing benefits, encouraging work-life balance, and helping employees connect with your company’s mission and values. 

Explore what employee engagement is, what it is not, why it is essential to workplace success, and how you can increase employee engagement at your organization. Then, consider providing your employees the opportunity to build in-demand skills through high-quality courses with Coursera for Business.

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What is employee engagement?

Employee engagement refers to the degree to which employees feel emotionally connected to and committed to their workplace. Engaged employees are often passionate about their position and genuinely care about their organization’s success. When employees are well engaged, they work harder, advance company progress, and have a clear vision of the organization’s mission.

Read more: What Is Remote Employee Engagement? Plus 8 Strategies to Enhance It

Employee engagement vs. employee satisfaction

Employee engagement relates to employees wanting to expand your company’s progress and success, whereas employee satisfaction refers to how content or happy they are with their roles.

For example, satisfied employees are pleased with their position and enjoy their job. They value their work and have positive relationships with their colleagues.

However, a satisfied or happy employee may need more motivation to help the company achieve further success. Though they may perform their job well, they might not desire to think outside the box or motivate their team to improve current operations. A happy employee might love the perks of their job without paying much mind to the company they are working for.

On the other hand, an engaged employee commits to the company’s values and mission. While employee engagement typically increases satisfaction, employee satisfaction may not increase engagement.

Why is employee engagement important?

Employee engagement matters because it is critical to company performance, customer satisfaction, employee retention, and workplace productivity. It can help you maximize employee performance, ensuring employee success and increased workplace productivity. It is an indication of the connection between an employee and their workplace. When this relationship is strong, employees can contribute more effectively to their organization’s overall success. Many of the most successful companies maximize employee engagement and routinely implement strategies designed to encourage employees to perform at their best. Finding new ways to engage employees can spark more passion and drive in the workforce and can be a crucial influence on a company’s growth and longevity.

Why is employee engagement important to a company’s success?

According to Gallup, a workplace consulting and global research group, engaged employees contribute to better business outcomes across industries. Over 50 years of employee engagement research have shown strong correlations between employee engagement and positive business metrics in several domains. Companies that used Gallup’s 12-item engagement survey revealed the following average outcomes [1]:

• A 78 percent drop in employee absenteeism

• A 63 percent drop in safety incidents

• A 28 percent drop in theft

• A 32 percent decrease in quality defects

• A 70 percent increase in well-being

• A 22 percent increase in employee participation

• A 10 percent increase in customer loyalty and engagement

• A 14 percent increase in productivity

• A 23 percent increase in profitability

The benefits of employee engagement extend not only to the worker but also to the entire company, including customers and stakeholders.

Despite these impressive benefits, Gallup’s surveys find that only 31 percent of the US workforce is engaged [1]. This leaves significant room for employers to integrate employee engagement practices into their business strategies and maximize their potential.

Why employee engagement is important for increased productivity

Improved employee engagement increases company productivity, with highly engaged employees achieving 14 percent higher production productivity and 18 percent higher sales productivity [1]. Much of this productivity comes from employees who are genuinely passionate about their work and engaged in their organization's success.

Engaged employees tend to be more vigilant within their organization and show a higher level of attention to detail. These employees typically have autonomy over their work and are aware of how their work contributes explicitly to achieving the company's mission. Employees can perform at their best and see how their work benefits the company's larger purpose.

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What are the drivers of employee engagement?

Several main drivers of employee engagement include high-quality managers, transparent leadership, and C-level engagementt. While every organization has a slightly different philosophy and driving mission, many organizations that have won the Gallup Exceptional Workplace Award share similar characteristics and have an average employee engagement score of 70 percent [2].

C-level engagement

For one, these organizations start employee engagement at the senior level. In fact, the relationship between employees and managers was found to be a key driver of employee engagement. Managers who promoted employee growth, fostered strong relationships, and maintained regular check-ins were associated with companies with higher employee engagement.

High-quality managers

High-quality management logically aligns with another driver of employee engagement,a strong focus on hiring and developing great managers. Managers who can motivate and coach their employees to reach new levels within the company boost employee engagement.

Transparent leadership

Employee engagement is also heavily influenced by transparent communication from leaders within the organization. Employees who feel they can give feedback and share valued opinions often feel more committed to their workplace. They want to feel they are working as active participants within the organization to drive success rather than replaceable workers who need a voice. While pulse surveys and other feedback tools are great ways to hear employee opinions, it is equally important that your leaders act on feedback and are receptive to making beneficial changes.

Tips to boost employee engagement.

You can use several strategies to boost employee engagement and maximize business success. Consider the following tips to begin implementing employee engagement strategies:

• Make employees feel valued. 

• Help employees connect with the company’s mission and values.

• Train employees to succeed in their positions.

• Offer employees opportunities to grow within the company.

• Recognize employees for their successes.

• Communicate feedback in an uplifting, positive way.

• Promote a healthy work-life balance.

• Encourage team bonding activities. 

• Provide benefits to employees.

Improve employee engagement with Coursera

With Coursera for Business, your employees will gain access to content from 350+ leading universities and industry partners, where they can build real-world experience with innovative skills, tools, and technologies while earning globally recognized credentials. Our customizable, scalable learning solutions balance workplace and technical skills training in diverse formats, from video clips to Guided Projects and Professional Certificates.

• Use our Global Skills Report to discover critical skills you can offer your employees to accelerate their career success.

• Provide your team with the opportunity to quickly build in-demand skills with Coursera for Teams, designed to meet the needs of teams with five to 125 employees.

• Subscribe to our free LinkedIn newsletter, The Learning Curve, where you can gain insights and ideas for engaging your team.

Train teams across your organization in the skills that matter most in today’s digital economy with Coursera.