Employee Engagement: What it is & How to Improve it

Written by Samantha Ferguson

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Last updated on 28th November 2023

In this article we’re going to take a good look at employee engagement, answering questions like “What is employee engagement?” and “How can employee engagement be improved?”

According to our 2022 Employee Engagement survey, 15% of people do not feel engaged at work. This is bad news because employees that are not engaged in their work likely already have one foot out of the door, with 46% actively seeking new employment

So, what can you do to prevent and/or reverse disengagement among your employees? Let’s find out! 

What is employee engagement? (A definition)

Employee engagement refers to how much (or how little) employees are positively invested in the company they work for. 

At one end of the scale you have engaged employees that have an amazing relationship with their organisation and invest a lot of their cognitive and emotional energy into it, and at the opposite end of the scale you have disengaged employees that don’t find any joy or meaning in their position. And, of course, there’s everyone in between those two extremes. 

Why is employee engagement important?

As you can imagine, engaged employees are much more likely to perform better and give an improved service to your customers, because they care about your business. They believe in the mission and they represent that proudly. 

That’s why employee engagement is important. 

When you have engaged employees it can improve every aspect of your business, from your internal culture to your bottom line.

7 Benefits of employee engagement

1. Improved productivity 

Engaged employees care about their work and, as a result, they work harder. This is great for businesses because it generates an automatic increase in productivity. 

According to our 2022 Employee Engagement survey, 90% of people feel that being more engaged increases productivity. So if you have doubts about investing in engagement, perhaps knowing that you could drastically increase productivity will change your mind! After all, it could end up paying for itself in the long run. 

2. Improved customer satisfaction

If your employees are happier then they’re probably going to go that extra mile to make your customers happier. Here’s a post from one of the world’s most successful businessmen that sums it up pretty well! 

It makes sense, doesn’t it?

Engaged employees feel a sense of pride in their workplace and so they care about its external reputation. As such, they’re more likely to want to please customers and keep that positive reputation going. 

3. Increased profits

Of course, if you improve productivity and customer satisfaction then an increase in profits is likely to follow! 

There’s no secret to it. It just makes sense. When employees are more productive, they get more done. When customers are happier, they’re more likely to spend more and recommend your company to their family and friends. 

To put a figure to it, our 2022 Employee Engagement Survey found that 85% of people agree that being more engaged at work increases profitability. 

4. More business growth

You’re probably starting to see a pattern here, right?

This whole employee engagement thing creates a snowball effect. Engaged employees are happier, so they work harder, so profits increase, and of course that leads to more business growth! 

This in turn will allow you to expand your teams and promote people internally, transforming jobs into careers. This is seen as a huge benefit to many workers, particularly from the younger generation. According to Deloitte, Gen Z workers care less about salary than any other generation and instead place value on career development and workplace enjoyment. 

5. Reduced absenteeism

Apparently, employees that are more engaged are less likely to call in sick. An Investopedia article cited “low morale and feeling unappreciated” as one of the top reasons people miss work.

According to BrightHR an absenteeism rate of above 4% is considered high. So take a look at your employees’ absenteeism rates and if any are higher than 4% try thinking of ways you can make the workplace a more enjoyable, positive place for your employees to be. 

6. Reduced accidents

Engaged employees are switched on and aware of their surroundings. What’s more, because of how much they value the company, they know how important it is to maintain a positive and professional impression – and that can extend to safety. 

According to our 2022 Employee Engagement survey, 85% of people believe that being more engaged at work increases workplace safety

Once again, it’s easy to see how all of these benefits feed into one another to create an overall happier, healthier, and more profitable workplace. 

7. Reduced turnover

You probably know already that hiring new employees isn’t cheap, but a study by Glassdoor actually put a figure to it. According to their study the average US employer spends $4,000 and 24 days hiring and training a new employee

If your employees are leaving left and right because they’re not feeling engaged, then that’s going to cost you A LOT in new hires. 

The better thing to do is invest in increasing employee engagement so that your existing (already trained!) employees want to stick around for years to come. 

15 Ways to improve employee engagement

1. Define expectations 

When employees know what is expected from them, this instils a sense of confidence that can increase engagement. 

It’s never too early to clearly define expectations. You can (and should) do this as soon as you advertise a job opening at your company. And keep that clarity throughout the hiring process and beyond. 

When assigning tasks to employees, managers should be explicit in their expectations but also available to answer any questions employees may have about those expectations. 

2. Be open and honest 

Openness and honesty from the management team can help to promote a positive company culture. After all, your employees are adults – who can handle frank and transparent discussions – and they want to be treated as such. 

Communicate regularly with your employees on what is going on with the business. Give them an insight into the things that go on behind the scenes, for example, how your company is doing financially, plans for the future, and any current successes and failures. 

Chances are, even if the news isn’t great they’ll appreciate hearing it anyway. 

3. Ask for input 

Engagement comes from feeling valued. And one way you can help your employees feel valued is by asking for their input and taking it on board to make potential improvements to the business. 

Even if the ideas you take on board fail, it still shows the team that you’re willing to take their advice. This creates more of a group experience in your company. 

By allowing employees to give feedback, you can transform their view of the business as “yours” and help them start to think of it as “ours”, which will do wonders for engagement. 

4. Strong communication

Strong internal communication is key to a thriving business, so it’s quite surprising that our Communication Statistics 2023 found that just 32% of people would rate their business communication as excellent

Poor communication leads to crossed wires, disgruntled team members, and siloed teams. And, of course, this is all a recipe for poor engagement. According to our same communications report, 35% of businesses have actually lost an employee because of poor communication! 

So, to avoid this, make sure your employees have the tools they need to communicate effectively. Additionally, make sure everyone knows how they are expected to use these tools. For example, Google Meet for external calls, Slack for quick questions that need fast responses, a project management tool for all project-related communication. 

Related reading: Project Communication Plan: Why You Need One…and How to Create it. 

5. Offer training and development opportunities

Usually, feeling satisfied and challenged at work goes hand in hand with high engagement. Everyone wants to feel like they’re making a difference, and allowing people to grow in their role by offering training and development opportunities is a great way to increase employee engagement. 

This is especially important when it comes to the younger generation of workers. According to LinkedIn’s Workplace Learning Report, 76% of Gen Z workers believe that learning is the key to a successful career. 

The report also found that learning together increases engagement. Learners who used social features like Q&A tools, course shares, and learning groups watched 30x more hours of learning content than those who didn’t

6. Use the right tools

When employees lack the tools they need to do their job effectively, this automatically results in reduced engagement. After all, when people don’t have the right tools (or the tools they use are dated and inefficient) it’s going to take them longer to complete their tasks, and this can lead to frustration. 

If you think you are using the right tools but you’re still seeing a decrease in employee engagement then perhaps it’s time to re-evaluate the tools you use and how they work together. 

A solid project management system can be a great way to aggregate a lot of the tools you need in one place. For example, Project.co includes everything needed to manage projects from collecting payments to sharing files, tracking time, plotting out tasks, and even a communications tool that can be used for internal and external messaging in real time. 

7. Spend time together

Did you know that having a good friend at work makes work more enjoyable and makes people feel better supported?

22% of people even believe they are more productive when working alongside friends, according to a survey by Wildgoose

By increasing work social events and planning regular team activities, you can encourage employees to become friends and this will lead to increased engagement. 

According to our 2022 Employee Engagement survey, when asked how they would prefer to improve work relationships with colleagues 60% said team lunches. Other responses were team building activities (40%), after-work drinks (38%), retreats (29%), and virtual gatherings (16%).

It could be a good idea to send out a survey to your team to see how they’d most like to spend time with one another to improve relationships and engagement at the same time! 

8. Discuss progression regularly

According to XL.net, the top reason for employee disengagement is lack of purpose and the second is stagnation, both of which can be solved by discussing progression regularly. 

Having monthly or bi-monthly 1:1 discussions between team members and their manager can be a great opportunity to find out how employees are feeling and what their current goals are. This is also the perfect place to discuss progression and find out how the business can facilitate each employee’s progression so that they continue to feel engaged at work. 

Giving regular pay increases that match employee progression will also boost employee engagement, but this needs to line up with what you can comfortably offer as a business. 

9. Constructive criticism

Criticism or feedback is just a part of working life, but the way you share feedback can be a make or break for employee engagement. 

When sharing feedback with employees make sure that everything you say is always constructive and helpful. This is also something you should establish throughout your company culture so that employees are always fair when sharing feedback with one another. 

Here are some top tips for constructive criticism: 

  • Never make it personal
  • Balance the positive with the negative 
  • Be specific and consistent 

The best kind of feedback is always objective, rather than subjective, and actionable – so the receiver of the criticism knows what to do in order to improve. 

10. Work on conflict resolution

Similar to criticism, conflicts are bound to arise from time to time and the best thing you can do is manage the resolution in a positive way. 

Start by identifying the source of the conflict and then allow everyone involved to have their say in a private and safe space. It’s important to listen carefully to what everyone has to say and not “take sides” while you investigate the situation. 

When you have a better idea of what happened you can then determine ways to solve the issue. Again, work with the people involved to find the best solution for everyone moving forward. 

In addition to handling conflicts positively, it’s also important to resolve issues quickly and re-assess in the future to ensure that the plan you put in place has worked.

11. Focus on work-life balance

A poor work-life balance can lead to a whole host of problems, such as burnout, health issues, and of course, a reduction in engagement. 

According to our 2022 Employee Engagement survey, 96% of people said work-life balance is important to them, yet 84% said they have experienced burnout in the workplace. 

Making a healthy work-life balance a priority for your employees will improve morale at your company and hopefully ensure that people are more refreshed and engaged during their working hours.

When asked how work-life balance could be improved, most (51%) of our survey respondents said flexible working hours.

This is just one way to improve work-life balance at your organisation. Other ideas include: offering employees work-from-home days, encouraging people to take their annual leave, and increasing support for parents. 

12. Conduct exit interviews

You can learn a lot from the people who choose to leave your business. An exit interview allows you to find out more about not only an employee’s reason to leave but also what their experience has been like working at your business as a whole. 

Because exit interviews are conducted with people who have already given notice and decided to leave, they can be more free and open with their opinions and offer real insight into how you can help other employees in the future. 

13. Host friendly competitions

If you’re experiencing an engagement lull then a friendly competition (with a big prize up for grabs) could really be the boost you need to get everyone back in the game.

Ideally this should be work-related. For example, who can take the most calls in a day or who can get the most 5 star reviews in a month. 

The prize should be work-related too, and something that everyone would want, such as an extra day off, a late start, or a long lunch. 

There’s no reason why you can’t host these friendly competitions regularly to keep engagement high and give everyone a chance of winning. 

14. Reward your team

Ultimately, employees want to feel valued. This doesn’t always have to mean prizes or awards; even the small wins are well worth celebrating. 

According to our 2022 Employee Engagement survey, almost 20% of people said they never receive any recognition at work

Keep this in mind when you’re walking past your employees’ desks or if you see an email or review from a satisfied client. A simple “well done” can really go a long way. 

In addition to that, consider making your benefits more personalised to individual employees. If someone doesn’t drink then they won’t be pleased with a bottle of wine at Christmas, just as a vegan won’t be happy with a McDonalds gift card. 

Treating your employees as individuals, especially when it comes to benefits and rewards, doesn’t take much effort but can give engagement a real boost! 

15. Be consistent

Lastly, it’s important to just be consistent in your efforts. If you introduce a rewards scheme or host a friendly competition, chances are that you’ll see a huge spike in engagement very quickly that will wane over time. 

That’s why it’s really imperative that you stick with everything you’ve implemented to keep engagement consistently high among your employees. 

3 Employee engagement success stories

1. Icelandair

In 2021, Icelandair was awarded the Best European World-Class Workplace award. So they are a great company to look to when it comes to employee engagement. 

One of the ways in which they keep employees engaged is through continuous listening. Icelandair uses internal surveys to check in with their employees. Then they analyse the data and initiate positive action in continuous ways. 

The company sends out annual company wide surveys and also monthly ‘pulse surveys’, which are shorter surveys sent to a random sample of employees as a way to regularly check in. 

Icelandair’s Director of People Operations, Sveina Berglind Jonsdottir believes that acting quickly is the key to their success, stating: 

“The important thing is to work with results quickly. If you wait eight to ten months to do a workshop following a survey, the insights might be irrelevant.”

2. Hollard

Hollard is a family-owned insurance company that is committed to retaining employees by offering great perks, rewards, and recognition.

To do this, the company launched an employee perks program called PerksPlus Recognition and also introduced Hollard High-Five eCards as a way for employees to easily and effectively recognise each other’s work. 

The program was a huge success, with 95% of employees logging into the platform in the first week and a total of 702 moments of recognition shared and celebrated across the business within the first 3 months

Speaking on this, HR Business Partner at Hollard Rebekah Quince had this to say: 

“The gold standard for me is being an employer of choice, and part of that is the way we recognize and reward staff and growing the employee benefits offering with options that support them.”

3. Subway 

After struggling with employee retention and also noticing a pattern between employee disengagement and poorer customer service, Subway franchise owner Harold Jackson decided to implement a behavioural assessment during the hiring process. 

The assessment helped Subway to understand candidate’s workplace behaviours and predict the best people for various roles, and the results were astounding. 

Employee turnover reduced from 70% to 32% and this saved the company over $15,000 a year in training costs alone! 

Final thoughts

So, there you have it! Everything you need to know about employee engagement. We hope you found the information in this article useful and will apply these tips and tricks to your business to improve engagement among your employees.

If you want to find out more about how to boost morale in your business and ensure your employees are at their happiest and most efficient, read this next: 10 Ways to Build an AMAZING Team Culture.

Written by <a href="https://www.project.co/author/samanthaferguson/" target="_self">Samantha Ferguson</a>

Written by Samantha Ferguson

Samantha is Head of Content at Project.co. She has 5+ years' experience in the project management industry and in that time she's written over 100 articles on the subject and conducted studies on employee engagement and how AI is impacting the industry. She also has a lifetime's experience of being obsessed with organisation and productivity - Samantha is that person who plans travel itineraries down to the hour! Her favourite Project.co feature is the AI assistant.

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