A company’s success hinges on several factors, including corporate culture, employee experience, and the ability to adapt and innovate. But did you know that employee engagement statistics show that it’s actually one of the most important drivers of success?
Employee engagement drives financial success and business leaders and managers who improve this crucial aspect of the working experience really do boost the bottom line.
What is Employee Engagement?
There are several ways to define engagement, but essentially, employee engagement is an employee’s emotional commitment to, and psychological investment in, their company. Engaged employees are enthusiastic about both the work and the workplace. They care about the company and want to help it achieve its goals and objectives and ultimately see it succeed.
An engaged workforce has a myriad of benefits for companies. Employees who are ready and willing to go the extra mile can help:
- Increase productivity
- Reduce absenteeism
- Provide superior customer service
- Boost morale
- Save the company money by lowering employee turnover.
Higher employee engagement leads to better business outcomes. This applies to all industries and companies of all sizes, and it’s true whether times are good or bad. When employees are truly treated like stakeholders of their company’s future and when they experience meaningfulness at work, they’re more willing to roll up their sleeves and get the job done. This, of course, will enhance their job performance and effectiveness.
As a result, it’s imperative that companies protect their human capital. At the end of the day, it’s their most valuable asset.
On the flip side, disengaged employees, or people who “quit without quitting,” can be detrimental to a company. Disengagement increases absenteeism, workplace accidents, and employee turnover, all of which have adverse economic effects on a business.
Companies that understand that engagement is a crucial driver of success and should be an integral part of every corporate culture and strategy will reap the most rewards.
Below is an epic list of 50 insightful statistics about employee engagement that will inspire you to implement changes at your workplace.
- Engagement and Retention Statistics
- Employee Happiness and Satisfaction
- The ROI of Engaged Employees
Engagement and Retention Statistics
Employee engagement directly impacts retention, not to mention productivity, loyalty, and customer satisfaction. Generally, genuinely engaged workers are less likely to quit — lost workers can be extremely costly for employers.
Below is a selection of the most interesting general statistics about engagement and retention.
- Within the US workforce, only 33% is engaged, 16% is actively disengaged, and the remaining 51% is “just there.” (Gallup)
While just one-third of workers genuinely love their jobs, it’s extremely problematic and somewhat risky that the other two-thirds are indifferent, unhappy, or actively undoing what their engaged counterparts are working to build. Companies need to step up their efforts to boost engagement, or their disengaged employees will drain both productivity and profits.
- More than 63% of companies believe that retaining employees is actually harder than hiring them. (Zenefits)
This inference is based on data from 600 businesses in the US with a staff of 50 to 500 employees. Companies should provide flexibility and allow their employees to share their perspectives. Appreciation, respect, and growth opportunities are sure-shot ways of retaining talent.
- 99.7% of employers in the US are small businesses, of which 81% would describe employee turnover as a “costly problem.” (Zenefits)
Companies can combat talent loss by offering benefits that matter to employees (like paid time off (PTO) and health insurance), providing career advancement opportunities, and building a corporate culture where everyone feels like they are part of the team.
- Businesses with highly engaged employees see a reduction in absenteeism by 41%. (Gallup)
Absenteeism has a highly negative impact on productivity, which in turn hurts the bottom line. To remedy this, employers can reduce stress in the workplace, reward good attendance and offer flexible hours and PTO.
- 40% of employees would be willing to work harder in their roles if they were happier at work. (Human Capital Institute)
When employees feel connected to their employers, they feel motivated and get more done during working hours. Employers can go the extra mile for their workers by promoting a positive work environment, prioritizing transparency and communication, and supporting work-life balance.
- Building a workforce that is highly engaged and enabled can improve a company’s retention by up to 54%. (Hay Group)
Searching for, hiring, and training new employees is expensive. Companies should hire selectively, be generous with recognition and praise, and factor employee feedback in significant decisions.
- Just 55% of companies regularly analyze their employee engagement data, and only 22% know what’s driving disengagement. (The Predictive Index)
Overlooking engagement data is an enormous missed opportunity. Companies can use that valuable information to reduce employee turnover, take actions to fix problems, and keep HR relevant.
- Engagement declines by 7% after a worker’s first year on the job. (Quantum Workplace)
New employees are the most engaged, but research shows that they generally fall out of love over the years because of a lack of motivation, recognition, and other reasons. Companies can retain and build motivation by prioritizing workers’ physical and mental wellbeing, rewarding and recognizing their achievements, and offering growth opportunities.
- Just 17% of executives consider increasing employee engagement to be a top priority. (The Predictive Index)
Many executives erroneously believe that engagement is too time-consuming or expensive. They don’t know how to improve it, or they don’t understand its importance. A mindset shift to focus on this area could lead to increased productivity and a boost to the bottom line.
- 24% of executives, 15% of managers, and 10% of individual employees report being engaged. (ADP Research Institute)
Engagement tends to differ depending on the position of an employee within the company and the education level. The higher the degree and position, the higher the engagement. Companies can support engagement by offering educational and training opportunities to the employees.
- Employees who find meaning at work are 3x more likely to stay in a job than people who don’t, plus they are 1.4x more engaged. (New York Times)
Having a sense of significance at work can be highly influential. Similarly, increasing meaningfulness can drive productivity and performance. Employers should assign tasks based on employees’ strengths, find ways for the team to spend time together, and connect workers to their company’s purpose.
Employee Happiness and Satisfaction
How happy or satisfied an employee is will generally impact their engagement. When someone feels good about their job, when their values are aligned with those of their company, and when they feel cared for and, in particular, listened to by their employers, engagement rises.
- When employees were asked what they needed to be more engaged, 37% said personal recognition from their managers would motivate them to work better. (Great Place to Work)
Employees need to feel genuinely valued to do their best work. Easy strategies companies can implement include shout-outs, encouraging peer-to-peer recognition, sending a handwritten thank you note, giving out non-cash rewards, or taking employees to lunch.
- 61% of workers are burned out. (Career Builder)
Employers can encourage employees to use vacation time, prioritize health and wellness, support work/life balance, and allow people to work from home to combat burnout in the workplace.
- Companies where employees suffer moderate-to-severe burnout have a 376% decrease in the odds of having engaged employees. (OC Tanner)
Burnout is a serious problem that companies need to address as it also impacts employees’ likelihood to stay on the job. It affects their work output and their perception of the employee experience.
- When a person’s values align with the company’s values, they are 5x more likely to feel engaged. (Achievers Workforce Institute)
Alignment with the company’s values is the #1 predictor of employee engagement, and it can be achieved by taking employees’ input into the selection of corporate values. Employees should be clear about their role in the company’s mission, and the values should promote diversity and inclusion.
- Only 10.4% of workers feel engaged, and 4 out of 5 workers report seeking new jobs due to negative feelings after feedback from the managers. (Gallup)
Constructive feedback motivates employees and empowers them to succeed. It should be specific, delivered with empathy, and focus on the worker’s performance and not their personality.
- If offered a job today at another company with a similar role, benefits, and pay, 58% of people would take it. (OC Tanner)
This shows that workplace cultures don’t seem strong enough to keep people from quitting, and there is significant room for improvement.
- Teams led by managers who always focus on their weak points are 26% less likely to be engaged compared with teams whose managers focus on their strengths. (Gallup)
Great managers focus on people’s strengths, which makes them feel more confident, self-aware and productive.
- Companies that act on the feedback they receive from their workers have 80% higher engagement compared to 40% for those that don’t. (Qualtrics)
Employees want to feel heard. Employers should encourage both positive and negative feedback. They should explain to their workers why they can or cannot act on their requests and provide alternatives. Moreover, they should keep employees apprised of milestones through emails, meetings, portals, and apps.
- Managers are responsible for about 70% of the variance in employee engagement scores. (Gallup)
Employees want to work under someone who values and recognizes them, cares about their opinions, and makes them feel like a vital part of the team, whether they work on-site or remotely.
- Employees that use their strengths at work every day are 6x more likely to feel engaged. (Gallup)
Managers should be able to recognize employees’ strengths and assign them projects accordingly. They should also provide training opportunities to team members based on their strengths and weaknesses.
- A satisfied employee is 40% more productive than an unsatisfied one, and an engaged employee is 44% more productive than a satisfied one. In comparison, an inspired worker is 125% more productive than a satisfied worker. (Bain & Company)
Satisfied, engaged, and inspired employees drive productivity and also deliver higher quality work.
- 70% of employees feel that being empowered to solve problems is an integral part of their engagement. (Society for Human Resource Management)
It can feel demeaning to be micromanaged. Instead, managers need to support their workers in solving problems by providing them with the right resources, trusting them, encouraging creativity, welcoming new ideas, and facilitating brainstorming.
- 31.3% of workers say they are engaged but believe their company could improve the employee experience. (Achievers Workforce Institute)
Ways to improve the employee experience include investing in wellness programs, being proactive with employee feedback, creating a unique onboarding experience, improving internal communications, and organizing stay interviews.
- 65% of employees want a clearly defined job description and responsibilities. (Mercer)
People perform better when they fully comprehend expectations. When they understand their role and, more importantly, how that role is part of something bigger, they’re not only simply more engaged; they stay engaged for long.
- 69% of employees say they would work harder if they felt more appreciated. (LinkedIn)
There are many ways to show employee appreciation, such as recognizing staff members on social media, celebrating their birthdays and anniversaries, spending one-on-one time with them, and organizing an annual team retreat.
- 58% of employees want their companies to conduct employee engagement surveys more often. (Achievers Workforce Institute)
Engagement surveys can help detect knowledge gaps among employees, increase satisfaction, lower absenteeism, enhance loyalty, and improve safety.
- 1 out of every 3 employees leaves their jobs because they’re bored. (Korn Ferry)
Boredom can be due to monotony or not being challenged enough, among other reasons. Companies can banish boredom by letting employees pick their projects, giving them breaks, rewarding them, or making it more or less challenging as required.
- 81% of people would leave their current jobs for a better offer even if they weren’t actively looking for a new job. (Hays)
How engaged can people be if they’d be willing to trade in their current employer for someone else in a heartbeat? This stat is a wake-up call for businesses that don’t consider employee engagement a priority. If your staff is disengaged, don’t be surprised when they quit.
- 64% of HR executives believe that a feedback tool that is always on is a vital part of any engagement listening program; however, just 20% have this type of tool in place. (Achievers Workforce Institute)
Managers and employers should always know if their workers are satisfied, challenged, and committed. A proper feedback system can allow them to track issues over time and improve them in a timely fashion.
- 58% of employees who quit their jobs due to workplace culture blame their managers for their decision. (Society for Human Resource Management)
The idea that employees join companies but leave managers is reflected in this data. Turnover can largely be attributed to bad bosses.
- 69% of people will reject a job offer if they find out that current employees are generally unhappy. (HR Dive)
Companies may miss out on talent if they don’t take care of workplace harmony. Employee happiness can be increased by keeping them in the loop, listening to what they have to say, learning more about them, and making them feel like they belong and matter.
- Among employees who feel they’re “cared for” by their employers, 94% say they are personally engaged. (Limeade)
You can show your employees you care by setting them up with health and dental insurance, giving them PTO, offering a 401(k) retirement plan, and supporting them during challenging times such as caring for ailing parents.
- Companies with a thriving corporate culture and superior employee experiences are 13x more likely to have engaged employees. (OC Tanner)
The right perks and benefits, investing in their skills and professional development, and reviewing compensation regularly can enhance the employee experience.
- Companies that have a clearly defined purposeful mission report 49% lower attrition. (LinkedIn)
Employees who feel like their work contributes to a good cause or an idea that they support will be happier and more committed at work.
The ROI of Engaged Employees
An engaged workforce for a company has a direct impact on its ROI. When a company invests in its employees and does whatever it can to ensure they are satisfied, heard, and engaged, there are improvements in customer service, productivity, sales, customer ratings, and profit. Supporting and nurturing engagement is a winning strategy.
- Losing employees lead to delays to customer services and products (24.5%), loss of productivity (21.1%), and an increase in costs associated with onboarding and re-hiring employees. (17.2%). (Zenfest)
Companies can slow or stop employee turnover by recognizing and rewarding them for their accomplishments, making good on their promises, supporting autonomy in the workplace, and making mistakes and failure a valued part of the learning process.
- Actively disengaged employees cost the US somewhere between $450 and $550 billion in lost productivity every year. (Gallup)
The effects of disengaged employees can be far-reaching. Their lack of motivation has implications not just for the companies they work for but also for the US economy as a whole. It means that by engaging the employees better, businesses can uplift the entire US economy.
- Companies where engagement is “high” are actually 22% more profitable than companies with “low” engagement. (Smarp)
Engaged employees are more productive, provide superior customer service, and generally go the extra mile for their employers, which ultimately positively impacts a company’s performance.
- Companies with highly engaged workers generally surpass industry averages by up to 60% for 5-year ROI, ROE, and ROA. (Hay Group)
An engaged workforce can help your business achieve its goals faster because they feel invested in those goals. Working to boost engagement can significantly impact your return on investment, return on equity, and return on assets.
- Businesses with highly engaged employees can see a 20% increase in sales and a 10% increase in customer ratings. (Gallup)
Employees who happily show up to work every day keep customers happy too. They are generally more attuned to their customers’ needs and drive business growth organically.
- Employees who feel heard at work are 4.6x more likely to perform better. (Salesforce)
Workplaces must support inclusiveness, diversity, and equality. When more people are invited to the table to share their thoughts and concerns, decisions and strategies take into account a broader set of perspectives. In the end, everybody wins.
- Firms with highly engaged employees can see revenue growth expand by up to 4.5x compared with firms with disengaged workers. (Hay Group)
Committed employees get creative in ways to boost sales and overcome different barriers to success. Since they’re invested in their company’s overall performance, their actions drive revenue growth.
- On average, customer retention rates are 18% higher when a company’s workforce is highly engaged. (Smarp)
Happy employees keep customers satisfied with their service. Thus, engaged employees are saving the company money whenever they can retain current customers as customer acquisition costs can really cost a pretty penny.
- Companies with engaged workforces outperform their rivals by more than 200%. (Human Capital Institute)
Employees who are satisfied by their experience and feel appreciated by their managers are consistently more productive than their disengaged counterparts. Naturally, their companies excel and outperform their competitors.
- Companies with superior employee engagement tend to financially outperform their rivals by 73%. (University of Pennsylvania’s Wharton School)
Employees are an intangible asset and often not factored into stock valuations even though they have such a prominent influence on the long-term returns of a company.
- Customers are open to paying 16% more for products and services when they have an outstanding customer experience, plus they’re more loyal. (PricewaterhouseCoopers)
Companies can also improve the customer experience strategy by creating an emotional connection with customers, collecting their feedback in real-time, and optimizing the customer journey. All this is possible when your employees are loyal and happy in their workplace.
- Research shows that highly engaged employees are 50% more likely to outperform their specific performance targets. (Hay Group)
Successful brands spend resources on their employees because they know that happy workers are more productive. Since their heart is in their job, they are fully committed to achieving and often overachieving the targets because their contribution is valued by the company.
- Companies with engaged workforces report 70% fewer safety incidents than those with less engaged employees. (Gallup)
Data from a meta-analysis study shows that companies with more engaged employees are safer places to work. Companies can also ensure safety by supporting ergonomics, ensuring regular communication, and implementing control measures.
- Healthcare costs for workers with high stress are 46% higher than those with low stress. (BMC Public Health)
Wellness on the job is essential and has a trickle-down effect on employee happiness, engagement, and productivity. Boost employee wellbeing by organizing fitness challenges at work and supporting workplace socialization. You can also arrange regular classes for meditation, yoga, and mindfulness.
- Disengaged employees are 12x more likely to leave their jobs after a year than highly engaged employees. (Glint)
Employees who are disengaged don’t generally build a strong connection with their employer or coworkers, so if and when a better offer comes around, they are more likely to quit leading to a significant employee churn.
Research shows the many benefits of employee engagement and the detrimental effects of their disengagement for a company.
An engaged workforce boosts the bottom line, reduces employee turnover, increases productivity, improves employee satisfaction and customer ratings, and supports workplace health and safety, among many other benefits.
Therefore, companies must build a culture of engagement that starts at the top. It should support open communication throughout the organization and ensure that leaders and managers are aligned and accountable for their employees’ engagement.
In the current landscape, building an engaged workforce is not only more important than ever; it’s practically a requirement for success. Moreover, today’s professionals won’t work at companies that don’t make the engagement a priority.
The employee engagement statistics clearly show the positive effects of improving and maintaining employee engagement. Employees who are heard, cared for, and supported are the most likely to go the extra mile.