November 15, 2023
March 1, 2024

Does Employee Engagement Really Increase Productivity?

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Leaders know that productivity is the goal of any company. Many initiatives are created and implemented to try and improve productivity, with varying degrees of success. But with engagement levels at a historic low of 32%, obviously we still have work to do.

So where does employee engagement come in? Engagement has been a buzzword for years now, but does it actually improve employee productivity? According to a study by Gallup, the answer is yes: companies with high levels of engaged employees have 18% higher productivity.

But you want to know more than just some numbers in a study, right? In this post we hope to dive deeper. We’ll go over:

  • What employee engagement is
  • How to measure and improve it
  • The impact of leaders on engagement
  • The consequences of disengagement
  • The relationship between engagement and productivity

What You Need to Know About Employee Engagement

You’ve heard most of this before, but let’s go over some high-level information on employee engagement to cover the basics.

What Is Employee Engagement?

Employee engagement is the level of mental and emotional investment an employee has for their work and their company. Engaged employees are self-motivated, collaborative, responsible, and hard working. They handle challenges well and often go above and beyond what’s expected of them.

Here are some quick benefits of engaged employees:

  • 18% higher productivity
  • 10% higher customer satisfaction
  • 23% higher profitability
  • 43% lower turnover
  • 81% less absenteeism
  • 143% better performance vs competitors

What’s the Role of Leadership in Employee Engagement?

Leaders, from executives to managers, have a huge impact on employee engagement. In fact, leaders account for 70% of variance in employee engagement scores, and the single highest driver of engagement is whether employees feel that their leaders care about them.

If leaders aren’t emotionally intelligent, empathetic, trusting, supportive, or engaged themselves, employees are much more likely to be disengaged.

What’s the Impact of Employee Disengagement?

You saw the benefits of employee engagement listed above—now consider when employees are the opposite of engaged. When employees don’t care about their work, don’t collaborate, don’t go above and beyond, and aren’t responsible…well, let’s just say that productivity definitely doesn’t go up.

Disengagement costs companies $7.8 trillion in lost productivity, and disengaged employees make mistakes 60% more often. Also, 76% of disengaged employees are looking for new jobs.

How Employee Engagement Affects Productivity

Engagement is foundational to business success because engaged employees are dynamic, responsible, and focused—here are some ways that those attributes translate to increased productivity. 

Employees Who Are More Present

Engagement lowers absenteeism and turnover, leading to organizations full of employees who are consistently present at work. This leads to more work getting done at a higher level, which naturally increases productivity—not to mention the money savings of having a low turnover rate!

Employees Who Innovate

Engaged employees are naturally more likely to put effort into their work. Instead of sinking into the monotony of daily work and putting in the bare minimum effort, engaged employees will strive to approach their tasks in unique and improved ways.

Employees Who Are Satisfied

When someone is engaged in their work, they enjoy the time they spend on it more. And when someone is happier and more satisfied with their work, they’re going to put more effort into it, leading to higher productivity.

Employees Who Care

When employees are engaged, they care about their work; they care about the success of the company and the impact of what they each do. When employees don’t care, productivity is the last thing on their mind—but when they do care, productivity goes up.

How to Measure Employee Engagement?

The best thing you can do to measure how engaged your employees are is to look at these key indicators:

  • Do your employees leave good reviews of the company on Glassdoor, Indeed, LinkedIn, etc.?
  • Do employees often refer their friends or family to open positions?
  • Is your turnover rate higher or lower than average?
  • Is work often done ahead of schedule at a stellar quality?
  • Do employees create and take part in a culture of fun and collaboration?
  • Are employees reliable, punctual, and trustworthy?

These quick tests can help you see how engaged your workforce is on a broad scale, but if you’d like to get a more detailed view of your engagement, here are some strategies:

  1. Implement stay and exit interviews. These interviews help you get a good idea of why some employees stay and why some leave. This type of honest feedback can give you a great idea of how engaged employees are.
  2. Send employee engagement surveys. Send out anonymous surveys on a regular cadence to employees. Gauge employee engagement and use results you receive to try to improve the employee experience.
  3. Utilize leadership. As we already covered, leadership plays a big part in employee engagement. Make sure leaders know how to support, recognize, and care for employees to help improve engagement levels.

Examples of Employee Engagement Initiatives

Engagement may seem too nebulous to be able to improve, but there are ways you can make noticeable improvements. Here are some ideas:

  • Implement manager-to-employee and peer-to-peer recognition. Include both online and offline recognition, such as thank you cards, social shoutouts, holiday gifts, and birthday celebrations.
  • Ensure that employees understand their roles and know what’s expected of them. Ask employees what their role description is now and have them write down what new responsibilities they’d like to learn.
  • Create value-driven work for everyone. Make sure that every employee, from the bottom to the top, knows how their work contributes to the mission and goals of the company. Employees have to have value-driven work in order to be engaged.
  • Implement more flexibility and trust. Trust that employees will stay productive even if they have the freedom to choose when and where they work.

Customize your engagement initiatives based on your own company’s needs. In summary, though, make work rewarding, support employee wellness, and recognize everyone’s efforts, and you’ll see engagement increase.

Engagement—the Key to a Productive Workforce

Employee engagement needs to be a priority for every business in 2023 and beyond. With these strategies, hopefully you know why engagement is important, how to measure and improve it, and how your business will get more productive as a result.