Why is Employee Engagement Important? 14 Benefits Backed By Research

why-is-employee-engagement-important-benefits-of-employee-engagementThese days, employee engagement is treated as the miracle drug for workplace challenges. We hear about the benefits of employee engagement from our favorite bloggers, read about them in the newspaper, and see them on conference agendas:

“Employee engagement increases profitability!”

“Employee engagement decreases turnover!”

“Employee engagement launches spacecraft to Mars!”

The headlines get more and more absurd, and we all start to wonder, is there any validity to this whole employee engagement schtick

Free download: 7 Employee Engagement Strategies Backed By Research


Employee engagement isn't a silver bullet, but it can have some pretty miraculous effects on your organization. And it doesn’t just correlate with great organizations, it can
create great organizations.

So why is employee engagement important? Read on for all the benefits of employee engagement—and real research to back up the claims.


1. Increased employee safety.

A quick definition of employee engagement, so we're all on the same page:

Employee engagement is the the strength of the mental and emotional connection employees feel toward their place of work.

Because engaged employees are more connected to their workplaces, they’re more aware of their surroundings. Research has shown that 70% fewer safety incidents occur in highly engaged workplaces. Instead of worrying about whether there's room for advancement or whether their boss likes them, engaged employees can focus on the task at hand.


2. Better employee health.

Engaged employees are:

  • Less likely to be obese
  • Less likely to suffer from chronic disease
  • More likely to eat healthier
  • More likely to exercise 

Why? Engaged workplaces tend to show more respect for employees’ needs, encouraging employees to appropriately care for their health. Think policies like flexible schedules, fresh fruits and veggies in the break room, and company-sponsored road races. Healthy employees provide numerous benefits for an organization, most notably, a better bottom line.


3. Happier employees.

Highly engaged organizations don’t have to resort to mechanisms like peer pressure, termination, or other high-stress behaviors to motivate employees. Instead, these organizations use practices like employee recognition, one-on-one meetings, and 360 feedback to drive performance.

Without bosses barking threats at them, employees are happier, and happy employees save their employers money. The American Psychological Association estimates that more than $500 billion is lost every year due to workplace stress.


4. Greater employee satisfaction.

Employee satisfaction is different than employee engagement. Employee satisfaction measures a minimum level, while engagement tries to get everyone to achieve greater. However, this difference doesn't mean employee satisfaction shouldn't be a goal.

Thirteen percent of Americans are somewhat dissatisfied or very dissatisfied with their current job. And you can bet that wouldn’t be the case if those employees were engaged.


5. Better home life.

Engaged employees have happier home lives, according to a Kansas State study. Satoris Culbertson, one of the researchers on this study states:

“[…] individuals who were engaged in positive experiences at work and who shared those experiences with significant others perceived themselves as better able to deal with issues at home, became better companions, and became more effective overall in the home environment.”

In other words, engaged employees are beneficial to more than just your workplace; they are beneficial to their families, too. They don't complain about their job to a significant other, have the energy to play with the kids after work, and generally contribute to a positive home atmosphere.


6. Lower absenteeism.

Engaged employees are invested in their job and care about the success of their team. It makes sense, then, that they would show up to work. Engaged employees are firmly committed to their organization's mission, and they're going to arrive every day with the intention make sure it gets done. In fact, highly engaged workplaces saw 81% lower absenteeism.

Taking the occasional day off can be a sign that employees are engaged. They feel secure in their role, and they're confident one missed day won't affect the work to be accomplished. However, you should be concerned about engagement levels when patterns of absenteeism begin to develop. 


7. Higher retention.

When employees can’t utilize their strengths, don’t feel challenged, or don’t enjoy their work (all hallmarks of low engagement), they’re more likely to leave their current employer. Engaged employees, on the other hand, don't have a reason to look elsewhere for work. 


Download the Ebook: Top 5 Predictors of Employee Turnover


8. Greater employee loyalty.

As younger generations enter the workforce, the definition of employee loyalty is changing. What once was defined as long-term dedication to a company's goals, now looks more like a tit-for-tat interaction. And that's not the only scary news: 46% of employees would accept another job offer if the opportunity arose.

Just because an employee isn't looking for a new job doesn't mean they won't leave you if something better comes along. But, when employees are engaged, they stick around. Employees don't leave when they care about the success of the organization and they are appropriately challenged by their work.


9. Better customer service.

Despite the ever increasing tech- and self-service shopping experiences, customer service is more important than ever. When employees are engaged, customers are more likely to be well-served.

Engaged employees care deeply about their jobs, and thus, the customers. And that’s good news for your business: 7 out of 10 consumers will spend 13% more money with a company that provides excellent customer experience.


10. Better quality.

Follow the advice of In Search of Excellence author Tom Peters:

"Techniques don't produce quality products and services, people do. People who care, people who are treated as creatively contributing individuals."

Engaged employees are functioning on all cylinders, which means they’re less likely to make mistakes and more likely to achieve excellence. In a recent study, highly engaged organizations saw 40% fewer quality defects


11. Greater productivity.

Employers are trying all sorts of wacky things to increase employee productivity—from wearable activity devices to a jungle of office plants. But they're missing the solution that is staring them right in the face: employee engagement.

Research shows that engaged employees are 17% more productive than their peers. Engaged employees are more likely to work diligently and expend discretionary effort in their jobs, supercharging productivity and innovation.

Today, businesses need innovation to stay agile and successful—but to increase innovation, your managers need to act as coaches. Yet, one in five employees is not confident their manager will provide regular, constructive feedback. Prioritizing consistent, real-time feedback will help challenge your employees to develop new and better ideas, solutions, and products—all leading to increased productivity.


12. Higher sales.

Better customer service + better productivity + better quality? You guessed it: better sales. Highly engaged organizations see an average of 20% higher sales than their disengaged counterparts. Recent research suggests that the same manager behaviors that drive engagement also simultaneously drive business results; check out the study and sample behaviors here


13. Higher profitability.

What organization doesn’t want a little extra cash in their pockets? The latest research shows that highly engaged organizations have 23% higher profitability than their peers. When your organization has periods of high profitability, make sure to reinvest in employee engagement tech and activities. This will preserve the profitability growth and keep you on a steady, upward trajectory.


14. Higher stock price.

You may know this concept as the Engagement-Profit Chain: basically, that the discretionary effort of engaged employees starts a series of events that chain reaction.

"Engaged Employees lead to

   higher service, quality, and productivity, which leads to…

       higher customer satisfaction, which leads to…

           increased sales [...], which leads to…

               higher levels of profit, which leads to…

                   higher shareholder returns (i.e., stock price)."

Take it from Campbell’s Soup CEO Doug Conant:

“To win in the marketplace…you must first win in the workplace. I’m obsessed with keeping employee engagement front and center.”

From 1999 to 2009, a decade that saw the S&P 500 stocks lose 10 percent of their value, Campbell’s Soup stock increased by 30%.



Employee engagement is proven to drive employee, team, and business success. Ramp up your approach with our ebook: 7 Employee Engagement Strategies Backed By Research.

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Published May 7, 2020 | Written By Natalie Wickham