Table of Contents

The benefits of employee engagement are numerous. However, so many people focus on discussing the qualitative outcomes of higher engagement: employees are more satisfied at work, they believe in the company’s mission statement, and so on. Those outcomes of engagement are important, and they have a demonstrable impact on individual performance. However, there are also many material benefits of employee engagement that are highly valuable to the company. Below are our top nine benefits of employee engagement.

1. An engaged team has less turnover

First and foremost, employee engagement efforts drive lower turnover and higher retention. According to the State of the American Workplace report, highly engaged teams can experience up to 59% less turnover than disengaged teams. The costs of replacing an employee are significant. Replacing an employee you failed to retain results in lost time and money. Increasing team engagement can prevent that cost, which can easily reach the five- or six-figure range once you account for lost opportunity, compensation deltas, recruiting, and training.

2. Engaged teams are more productive

When people are motivated, they become more effective at their jobs. They are driven, focused, and productive. The State of the American Workplace report shows a 17% increase in productivity for highly-engaged employees.

3. Engaged companies are more profitable

You can also expect up to 21% higher profitability from high-engagement companies. The aforementioned productivity improvements and increased retention results in more sustainable and profitable growth.

4. Highly engaged companies grow faster

This profitability lends engaged companies to faster growth than disengaged companies. A Cornell University study found that companies which offer workplace autonomy—a key contributor to employee engagement—grow at four times the rate of control-oriented companies. This can be explained in part by our earlier mention of increased profitability as well as additional benefits outlined in the State of the American Workplace report, such as a 28% reduction in shrinkage and a 20% increase in sales.

5. Engaged employees are great recruiters

Engaged employees are more likely to recommend great people they know to join them at work. Employee referrals for job candidates is a top sourcing method for recruiters. A Jobvite study found that 40% of new hires are sourced by current employees. They also found that job candidates who are referred by current employees will move through the hiring process more quickly than other candidates. That makes sense: your highly engaged employees would only refer people they trust to do a great job, right?

6. Engagement efforts increase trust

Employees want to feel good about the company they work for, especially their direct managers. Management is cited as one of the leading causes for employees to seek other employment, so increasing trust helps fuel the aforementioned benefit of employee engagement: decreased turnover and higher retention. Additionally, when your people trust you, they will offer you candid feedback you may not otherwise hear. If they realize that you are seeking the best ideas and best path forward for the team, they will give you their thoughts and advice on what should happen next. They may even give you a pass if you make a bad call every once in a while. This type of engagement makes for a more resilient company, as leadership considers the best ideas to solve the problems they face.

7. Engaged employees have great ideas

A result of that increased trust is the introduction of more valuable ideas. Engaged employees are more likely to speak up when they have observations or ideas that may impact the performance or sustainability of the company. As a company leader, you seek to hire the best and the brightest for your team. Once you have them, demonstrating your receptiveness to their thoughts and ideas will create the positive reinforcement that may one day give you innovative and profitable ideas worth implementing across the company.

8. Engaged employees are more loyal

When employees are highly engaged, they are less likely to leave your company for a new job. Engaged employees are more likely to feel that they have adequate compensation and desirable advancement opportunities within their current company. 83% of employees describe career advancement as either important or very important to them. However, only 54% of employees are satisfied with their opportunity for advancement with their current employer. By presenting advancement opportunities, your people will be more likely to remain with the company for significant parts of their career.

9. Engaged employees show up to work

When you are engaged at work, you are more likely to show up for work. Highly engaged companies experience a 41% reduction in absenteeism when compared to low-engagement companies. This worker reliability increases predictability of work, which is highly important for customer satisfaction when those employees are in customer-facing roles.

Increase team engagement, for free

Now that you’ve read about the top nine benefits of employee engagement, are you interested in learning how to better engage your employees? Create your free account for Insight and gain access to our leadership playbook. The playbook has dozens of ideas for motivating your team and increasing employee engagement. You can also send surveys to your team to measure their current level of engagement, and then receive personalized action plans that tell you how to support your employees based on what they need most.