13 Key Benefits of Employee Engagement for Boosting Organizational Success

February 22, 2024

Fostering employee engagement benefits both employers and employees. Let's delve into the significance of this connection and the positive outcomes your organization can achieve through an actively engaged workforce.

A frequent distinction between companies that flourish and those that falter is their level of employee engagement. 

Employee engagement is crucial for long-term business success. Its benefits go beyond enthusiasm. Studies consistently show that engaged teams outperform others in key business outcomes. 

Let’s dive into the many concrete benefits of this strategic priority (other than seeing smiles on your workers’ faces). 

Why is Employee Engagement Important? 

Sixty-seven percent of job seekers are considering leaving their employer within the next year.  

The main reason? Bad management or toxic culture — two common causes for disengaged employees

Are your workers merely going through the motions, putting in minimal effort? Or are they actively taking the initiative to propel both their careers and the company's objectives forward?  

At its core, employee engagement seeks to enhance motivation, productivity, and overall job satisfaction. And when employees are engaged, we see a more positive work environment and improved organizational success. 

What’s more, employee engagement plays an important role in keeping your workers on board for the long-haul. 

Clearly, we all want the second scenario.  

Engaged yet? Read on as we dig into 13 tangible employee engagement benefits. 

Top 13 Employee Engagement Benefits 

If you still have doubts (or need to persuade someone else), here are 13 advantages to persuade anyone about the impact of employee engagement. 

1. Reduced Employee Turnover 

Imagine clocking in at 8 a.m. from home, working eight hours, and never meaningfully communicating with a co-worker. You turn in your assignments, clock out, and never get feedback. 

This is a recipe for employee disengagement, quiet quitting, and eventual resignation, making for soaring employee turnover

What’s more, when we examine common reasons for why employees quit, they’re often linked to byproducts of lower engagement levels.

Reason for Employee Turnover Percentage
Career development 22% 
Growth and development 21%
Work-life balance 12% 
Management behavior

2. Lower Absenteeism 

There’s always that one work colleague who seems to be sick every week. The excuses for absence range from “the kitchen is flooded” to “my hamster has died.”  

Whether the reasons are legitimate or not, the fact is that disengaged employees are unhappy employees. And if work makes you unhappy, it’s the last place you want to be.  

Keeping your employees engaged helps nip this problem in the bud. In fact, according to a Gallup study, top- and bottom-quartile business units and teams with engaged employees saw an 81% difference in absenteeism.  

This difference has a real impact on productivity and overall outcomes. 

3. Less Stress 

Your inbox is bursting at the seams, you’ve got a dozen deadlines looming, and the phone just won’t stop ringing. Sound familiar? 

We’ve all been there. With work comes stress. It’s unavoidable. From breathing exercises to taking minutes from our desks, we’ve all got different ways of handling it. 

But, in addition to how we manage our stress as individuals, there’s a strong reciprocal relationship between our well-being and who signs our checks. Being engaged with our work and feeling supported goes a long way in combating the stressors we feel. 

According to Gallup analysis, employee engagement has a 3.8 times greater impact on stress than work location. Job satisfaction is more closely tied to the relationships individuals have with their team and manager than whether they work remotely or on-site. 

Feng shui plants are all well and good, but few things top feeling valued and heard for easing job pressures. Employee wellness programs are an effective example of how to combat employee burnout in the workplace. 

4. Increased Productivity 

“Find a job you enjoy doing, and you will never have to work a day in your life.” Okay, maybe that quote is a little hokey, but it still rings true. 

We all know how good it feels to really get your teeth into something. When you enjoy your job, it feels less like a chore, and you’re likely to be more productive as a result. This is good for you and your company, which reaps the rewards of your renewed effort. 

One of the benefits of an engaged workforce is that they report 14% to 18% more productivity compared to disengaged ones. So, there's a massive incentive for companies to keep their people engaged and happy. 

5. Improved Customer Service 

Enthusiasm is infectious. One of the advantages of employee engagement is that your staff will show more commitment to a business, and it’s almost impossible for this not to spill over onto the customers.  

If employees feel valued, they’ll be more aligned with a company’s goals and mission and will naturally provide better levels of customer service. 

Not convinced? Organizations with an engaged workforce see 10% higher customer loyalty scores

So, by keeping employee satisfaction levels high, companies will likely see better customer experiences and, in the long term, an increase in customer loyalty rates. 

Learn More: Elevating Employee Engagement for Better Customer Experience

6. More Effective Leadership 

Who doesn’t want a charismatic, approachable team leader who has a clear vision for the company? Well, the influence of employee engagement often starts at the top and cascades down.  

According to Forbes, 76% of employees who have empathetic managers are very engaged at work. This highlights that when managers are highly engaged, their positive connection with the company can disproportionately affect overall performance. 

Pro Tip: Invest in Managers for Higher Engagement

People leave managers, not companies, as the saying goes. To attract and retain top talent, highlight excellent managers in your employer value proposition. Prioritize specific managerial skills in hiring and provide ongoing training and development for managers throughout their careers.

7. Safety Improvements 

It’s one thing to send an email with the wrong attachment or to submit the wrong HR form. However, making a mistake in a more labor-intensive workplace like an auto repair shop or a factory can have devastating consequences. 

Keeping employees within these industries engaged is just as crucial as doing so in an office environment. When employees are engaged, they tend to be less complacent while on the job. This means they're more focused and attentive to their work, which helps them avoid accidents. 

Gallup research finds that businesses with engaged employees see a 58% difference in the number of patient safety incidents (mortality and falls).  

If the friendly mechanic who always comes to your rescue when your engine light comes on is happy at work, they're also more likely to spot potential safety issues before they become big problems — whether with your car or on the entire workplace premises. 

How Employee Engagement Leads to Safety

Engaged employees are focused employees — and that means fewer accidents.

But this isn't just a lucky coincidence. When employees receive strong support and communication from leadership, they feel empowered about how to stay safe.

This empowerment raises them from mere passive participants in their work to ones that are actively vigilant and proactive. Engaged employees are less likely to overlook potential hazards, thereby fostering a culture of safety that benefits everyone involved. 

Communication ➜ Empowerment ➜ Engagement ➜ Safety 

8. Greater Employee Commitment

Engaged employees not only get more done but also show a real commitment to the future of their workplace. They're likely to put effort into things that might not be easy to measure but really matter — like helping new colleagues and finding more efficient ways to work.

Employees who are disengaged are prone to making costly mistakes at work. When staff lack a sense of commitment to the organization and their roles, they may be disinclined to put in the extra effort needed to ensure the quality and accuracy of their work.

9. Higher Revenue and Profitability

Unless you’re a stand-up comedian or a freelancer, most of us are part of a wider team no matter what we do.

Ultimately, we’re all pulling in the same direction, but how far we go — i.e., how profitable the companies we work for are — depends much on how motivated we are to achieve the collective aim.

This isn’t just a theory. Studies show that highly engaged employees result in a 23% increase in profitability.

Better employee engagement leads to better-performing businesses. Lower turnover, happier employees, and higher revenue? Employee engagement is a win-win proposition!


More Innovation and Creativity

Fostering innovation and encouraging employees to share ideas is another way to cultivate an engaged workforce.

Capitalize on the expertise of specialists by bringing them together for collaborative projects and investing time in innovation to give your team a sense of belonging and accomplishment.

Beyond building engagement, this approach can also be resource-efficient as employees may develop better ideas than external sources. Approach your employees with creativity, and they're likely to respond with enthusiasm and creative solutions to any task assigned.

11. Mutual Respect

Mutual respect is a two-way street. Managers cultivate respect by valuing their staff and allowing them the freedom to carry out their tasks without excessive micromanagement. In the same way, employees should feel free to ask questions without hesitation. 

This respect dynamic is even more important for workers distant from their direct managers, including remote and frontline workers. By demonstrating trust in these employees and providing flexibility, employers foster loyalty and engagement.

12. Higher Stock Prices

We know, it sounds like a stretch. But studies have shown that the positive impact of high engagement can extend to shareholders as well.

Gallup reports that among publicly traded companies, those with the highest engagement demonstrate a remarkable 147% higher earnings per share than their less-engaged counterparts.

13. Stronger Employer Brand

Engaged employees not only attract customers but also serve as a potent recruitment asset. Content employees share positive messages about their company within their networks, influencing job seekers with high engagement levels to form a favorable employer brand.

In this way, engaged employees become a powerful tool for boosting revenues and positioning the company for sustained success over the long term.

Boost Engagement At Your Company With Paylocity’s Employee Experience Platform

Now that you're familiar with the significance of employee engagement, you might be wondering how your business can reap the benefits. You don’t need to do it all on your own — the right solution at your side can make engaging with your workforce easier than ever.

Paylocity’s all-in-one HR and Payroll platform is built to foster a culture of engagement with features such as: 

  • Employee Voice: Automatically collect feedback via surveys to quickly measure and analyze employee engagement.  
  • Community: streamline employee communication and foster a culture of engagement with features like chat, discussion boards, and file sharing.
  • Recognition and Rewards: Make it easy for employees to recognize each other and motivate employees with cash rewards.  

Request a demo today, and let us help you drive communication, collaboration, and connection in your organization.


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