When engagement is a key component of a company’s approach to success, it can deliver high value to business and people-related objectives—from financial performance—to greater employee happiness, productivity, retention, and more. Understanding what drives employee engagement—and how to measure it effectively—helps organizations identify and meet their employees’ needs at work.
Read on to learn about the benefits of employee engagement, what drives engagement, and how leaders can measure and improve employee engagement across the enterprise.
What Is Employee Engagement?
Employee engagement is the degree to which employees invest their cognitive, emotional, and behavioral energies toward positive organizational outcomes. Engaged employees are personally invested in their work, see a strong connection between their strengths and their role, and are more willing to contribute time and effort to their work—and the company’s overall goals.
Employee engagement is a broad construct that encompasses many aspects of an employee’s experience at work. In research, it has been found to overlap with other concepts, such as job satisfaction, commitment, involvement, and motivation. Employee engagement is often confused with job satisfaction, but the two are not the same. Job satisfaction simply indicates how much an employee likes their job, which can involve many factors, including the compensation, prestige, or location of the job. An employee may be completely satisfied, but not engaged enough to apply themselves to the job.
True employee engagement requires a deeper connection between the workplace and the employee’s personal values, goals, interests, and motivations.
Benefits of Employee Engagement
Employee engagement benefits both employees and their organizations. Some benefits of employee engagement include:
It’s astounding how productive a truly engaged workforce can be. Research shows that nearly 40% of workers would work harder if they were happier in their role. When organizations focus on engagement, employees seek to accomplish more during their working hours, and the results speak for themselves: organizations with engaged employees outperform competitors by over 200%.
Higher employee retention rates
Highly engaged employees are less likely to leave, reducing attrition and increasing retention rates. In a year-long study conducted by Glint between 2016-2017, including 75 companies across 15 industries, and involving over 500,000 employees, employees who scored unfavorably on engagement were 5 times more likely to quit in the subsequent six months, and 12 times more likely to quit in the subsequent 12 months of the survey. This large-scale study shows that engagement is not only highly predictive of future outcomes, but it can be a leading indicator 12 months in advance. Employees who are emotionally invested in their work (and in the organization as a whole) are more likely to stay, preserving valuable institutional knowledge that improves your organization.
Lower rates of absenteeism
Employees who are engaged in and motivated by their work are more likely to show up every day to get the work done. Companies with an engaged workforce experienced 40% less absenteeism than less engaged workforces. And it’s no surprise that a lower rate of absenteeism translates to more productive teams and, ultimately, a stronger bottom line.
Better customer service
Excellent customer service is more important than ever. Customers are willing to pay as much as a 16% premium for excellent customer service.
When employees are invested in their jobs and in their employer, they are much more likely to be invested in the customers, too. Customer service relies on employee enthusiasm and positive attitudes, which is why companies with highly engaged employees see higher customer satisfaction ratings than companies with less engaged employees.
When other benefits of employee engagement converge—greater productivity, higher retention, and higher job satisfaction—they translate into a healthy bottom line. Organizations with engaged employees generate 2.5 times more revenue than organizations with low levels of employee engagement. Organizations with an engaged workforce can even improve the organization’s stock market performance. When employee engagement is a priority it can become a key driver of business success.
Drivers of Employee Engagement
In order to improve employee engagement, it’s important to understand what motivates employees and drives them to be personally invested in their work. However, these drivers can vary across organizations, for different employees, and even change over time.
Often, employee engagement is driven by employees’ desire for:
- Meaningful work
- Career growth
- Fulfilling work relationships
As technology and other modern practices change the way we work, many of the traditional drivers of employee engagement have remained the same. But a modern approach to employee engagement requires thinking of these drivers in a more personalized way.
The drivers of employee engagement are often impacted by many factors, including:
Company culture encompasses the values and behaviors that shape the organization and exemplify “the way things get done around here.” Culture has a huge impact on employee engagement drivers and levels, and both engagement and culture are influenced by the prevailing leadership and management practices within the organization. For example, at an organization known for innovation, engagement drivers may relate to an employee’s ability to speak up or share new ideas. Alternatively, an organizational culture driven by operational efficiency may have engagement drivers related to collaboration and execution.
If you ask managers in two different industries what drives engagement for their employees, you may end up with two completely different lists. For example, an employee at a nonprofit may need the work to be meaningful and tied to community goals in order to be engaged. On the other hand, an auto worker may prioritize workplace safety and relationships with colleagues. Like company culture, an employee’s engagement drivers are influenced by the industry they are in and colleagues they are surrounded by.
Depending on the industry, there may be different opportunities for employees to get involved and become more engaged with their work. Industry conferences, trade shows, and webinars provide opportunities for employees to sharpen their skills, make new connections, and demonstrate their proficiency in wider circles.
These activities may look different in each industry, but they all serve to motivate employees to learn more, showcase their skills, or form stronger relationships with their peers—all of which have a major impact on employee engagement.
An employee’s specific job function can greatly impact what motivates them.
For some employees, meaningful work is motivation in and of itself. The meaning of workis personal to each individual employee and can be difficult to measure, but it’s a key part of inspiring employees to do their best work. Employees who are intrinsically motivated by their work feel they are serving the greater good or helping to achieve larger goals.
Other employees may be motivated by growth and changes in their job responsibility. Giving an employee greater latitude in their role, allowing them to work on different projects that are more aligned with their interests can motivate them.
For other employees, it’s not the job function itself that affects engagement, but how they interact with others in the course of work. They want positive relationships with colleagues and managers, a healthy work-life balance, job security, or something else entirely, that isn’t tied to their work duties. With that in mind, managers should pay attention to how the specific duties of the job impact engagement for some employees, but not all.
Career goals—and progress toward them—is another factor that contributes to employee engagement. Depending on the career stage a certain employee is in, they may be motivated by different things.
For example, employees who are younger in their careers may prioritize competitive compensation and strong leaders who help them improve their skills. More seasoned employees may place more emphasis on strong relationships with colleagues or flexible work arrangements that suit their schedules. Employees who have experience in other companies or industries may be more driven by relationships, work culture, and autonomy than their peers.
How to Identify Drivers of Employee Engagement for Your Organization
The drivers of employee engagement vary from organization to organization and employee to employee based on a wide range of factors. Drivers also change over time alongside changes in management, culture, or external factors.
A modern approach to employee engagement requires understanding what drives employees—even as they shift. A people success platform—a platform that offers a holistic view of the employee experience—is the best way to measure and monitor these drivers at scale, and in real-time.
Within a people success platform, an effective employee engagement solution delivers information instantaneously and on-demand, rather than a massive annual data dump. It can help organizations identify the drivers with the most impact on engagement for the organization, as well as drivers unique to specific managers and teams. For example,Glint’s Driver Impact Report enables companies to understand what drives engagement for specific groups by combining attributes (e.g., job level and location) of critical populations.
How to Measure Employee Engagement
Given the impact employee engagement has on an organization, how do you measure it and communicate its impact?
Many organizations rely on annual or semi-annual surveys to gather employee engagement data. This process typically requires a significant time investment to create, disseminate, analyze, and identify and communicate the findings of these surveys.
With this approach, it often takes weeks or even months to get survey data back. And that’s not even the complete process—organizations, teams, and managers still need to discuss the results and take action. With this latency, new trends often develop before organizations have time to discuss the ones identified in the last survey.
Luckily, there are new and improved ways to measure employee engagement. Measuring employee engagement in today’s world requires organizations to:
- Collect data frequently: Many companies have experienced the shortcomings of annual employee engagement surveys, and now opt for a “continuous listening” approach. This means administering a short survey (25 items or less), or “pulse,” on a frequent basis. This approach drastically reduces turnaround times for survey results and allows companies to collect near real-time feedback on trends that impact employee engagement.
- Synthesize multiple data points in one system: Organizations that rely exclusively on employee engagement surveys may miss some big-picture patterns and trends. The most effective organizations use pulse data alongside attrition, performance, and customer data to paint a complete picture of employee engagement. This allows the organization to predict things like increased attrition or decreased performance, giving managers a chance to address issues before they affect the entire organization.
- Understand macro trends, act on a micro level: It’s crucial to digest information from all parts of your organization, bring in perspectives from different roles, locations, priorities, ages, career goals, and levels of experience. But keep in mind that what drives employee engagement for one department or one individual may be completely different from what drives engagement for someone else. A “blanket diagnosis” runs the risk of alienating certain employees or making them feel unheard. Managers should absorb insights from the entire workforce, but apply them to teams and individuals differently, based on what motivates them.
- Share data and create action plans with employees: It’s not enough for employees to simply fill out a survey; they need to feel their feedback is heard and used to make a difference. Managers should strive to be transparent with employees, communicate what is being measured and discuss strengths and opportunities. Consistently sharing these results contributes to a transparent culture where employees are comfortable giving feedback, and management is committed to improving results.
- Use AI for pattern recognition: Artificial intelligence (AI) is transforming a wide range of business functions, and HR is no exception. AI and machine learning are built into the top employee engagement platforms. AI gives leadership the tools to detect patterns, gain insights, and proactively address issues related to employee engagement. Leaders should take advantage of advanced analytics and pattern recognition to measure and predict trends in job performance, customer satisfaction, and much more.
- Turn qualitative into quantitative data: Open-ended employee feedback is a crucial source of people data. In the past, companies spent weeks or months on end manually coding and compiling this feedback and pulling out important themes. Now, HR can employ natural language processing (usually within an employee engagement platform) for a more streamlined, data-driven view of open-ended feedback. Natural language processing, like Glint’s Narrative Intelligence™, helps HR professionals organize and compile key themes in employee feedback in a fraction of the time.
With today’s tools, it’s easier than ever to leverage people analytics (analyzing data to assess the effectiveness of people practices, programs, and processes) to uncover critical insights and make purposeful changes. We can understand more about employees with smaller, more frequent pulses, and put AI and other advanced tools to work behind the scenes to quickly pull out rich insights. We can gather quantitative andqualitative data to truly understand how employees are feeling. Collectively, these technologies help organizations move from measuring employee engagement as a historical analysis to predictive and even prescriptive people analytics.
How to Improve Employee Engagement
There’s no one-size-fits-all solution for how to best improve employee engagement. As discussed earlier, what drives employee engagement depends on the organization’s culture, industry, as well as an employee’s job function, career path, and so much more.
However, there are a few best practices all organizations can consider when it comes to improving engagement:
- Effective management practices: Employees are more engaged when their leadership is engaged, transparent, and leading giving them in a clear direction. Management practices, such as departmental meetings with workers, formal and informal communication between supervisors and employees, or even frequent pulses, demonstrate that managers are invested in employees’ success, too. Leaders and managers need to serve as models of the behaviors and practices they want to see practiced by their employees.
- Relationships among coworkers, and between coworkers and management:Fostering professional relationships among the various departments and management teams is a proven way to decrease attrition and improve engagement. When employees are comfortable with their peers and leaders, they are more personally invested in the work and more likely to be engaged. When teams work together seamlessly, employees, leaders, and the organization overall benefit from happier work lives and better performance.
- Emphasizing communication: Frequent conversations (for teams and one-on-one) are critical to learning about what drives and motivates employees. Conversations are a great opportunity for leaders to learn about and discuss potential problems or troubling trends, identify solutions and related actions, and celebrate key wins and accomplishments. To improve engagement, leaders should practice clear, honest, and transparent communication with employees.
- Learning and personal development: Employees are more engaged when they feel equipped and empowered to do their job, and learning is a big part of that. Make sure training is clear, well-structured, and ongoing to ensure employees have the information they need to perform at a high level. Consider offering on-demand training and continuous learning opportunities.
- Tools: Simply providing employees with the right tools can help them increase their own efficiency and performance. For instance, self-service analytics tools can give employees more insight into customer expectations and trends so they can take their service to the next level. Additionally, tools that simplify and streamline necessary work processes—such as a single customer database or CRM—make it easier for employees to do their jobs, which in turn increases engagement.
- Employee recognition: Sometimes boosting engagement is as simple as recognizing those who are already performing well. Consider ways to recognize employees that work well for their job role, location, and schedule. This may include informal praise in an email or a meeting, or in more formal settings such as organizational or departmental meetings. Some companies may benefit from an employee recognition system, where peers or managers can nominate others for outstanding work, increasing engagement and strengthening relationships. Employee recognition helps employees to feel their performances are contributing to the organization as a whole and encourages them to keep doing so.
- Inclusive and diverse workplaces: Creating a workplace culture that fosters a sense of belonging translates to a more engaged workforce and a greater competitive advantage. To create a sense of belonging, many organizations turn their attention to strategies and tactics that support diversity—the variety of differences between people in their workforce —and inclusion—helping those employees feel a greater sense of belonging. A Deloitte study found that organizations that focus on both diversity and inclusion can see up to a 2x increase in feelings of engagement, as compared to organizations that focused only on diversity (1.2x), or only on inclusion (1.7x).
The Future of Employee Engagement
Employee engagement will continue to evolve, as it becomes more widely adopted. The future of employee engagement depends on the use of AI and People Analytics to help organizations identify and understand enterprise-wide trends. Machine learning algorithms and natural language processing will continue to reduce the latency associated with employee engagement data, making it faster to identify drivers and patterns associated with employee engagement.
At the same time, employee engagement is set to expand beyond mere data-driven analytics, to encompass a greater emphasis on the whole employee—including growth and development. Whereas the analytic component of employee engagement is assessment-focused, that’s only the starting point for identifying how to better engage employees. The coming years will see a greater focus on a more holistic view of an employee —with tools and solutions to support their growth, development, and performance that will naturally cultivate employee engagement.
The Business Transformation Network has shared this article in partnership with Glint.