6 Reasons Why Employee Engagement is Essential for Business Success

December 2, 2022
Engaged employees working together around a laptop

Employee engagement means developing a workplace where employees feel valued, motivated, and productive. Strong employee engagement is an important aspect of any successful business. However, in today's workplace too many employees are feeling disengaged in the workplace, which leads to low morale, productivity, and high turnover. In a Gallup report on the State of the Global Workplace, only 21% of employees report feeling engaged at work, with most saying that they don't find their work meaningful. The same report found that "low engagement alone costs the global economy $7.8 trillion".

Creating a positive workforce is an increasingly important objective for business owners and executives. When employees are engaged and motivated, they are more likely to put greater effort in their work, leading to improved results. Companies that invest in creating a culture of employee engagement can reap numerous benefits such as increased productivity, better customer service, higher profits, improved safety, better collaboration and more.

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6 Reasons Why Employee Engagement is Essential for Business Success

Here are 6 reasons why employee engagement is essential for business success and strategies for how to create an engaging work environment:

1. Higher Productivity

Engaged employees are more productive and bring higher quality work output than less engaged employees. According to Gallup's most recent employee engagement meta-analysis, teams that scored in the top quartile on employee engagement had 18% higher sales productivity.

The correlation between engaged employees and productivity is critical to long-term business success. When employees are engaged they are more motivated, creative, and innovative in how they go about their work. This is because they feel a greater sense of connection with the work they do and responsibility for their duties. Engaged employees are better at finding opportunities to improve efficiency and productivity because they collaborate more with other team members, and are more likely to go the extra mile in putting greater effort into tasks and projects.

2. Lower Turnover Rates

Engaged employees are less likely to leave their current position. According to Gallup, teams with employee engagement in the top quartile have up to 43% lower turnover rates than all other teams.

When employees feel valued and appreciated by their employer, they are more likely to stay with a company longer, which leads to better retention of key personnel and their knowledge and skills. Companies that invest in employee engagement tend to have more employees with tenures of a decade or more, feel more invested in their work, and are in job positions that best align with their skills and interests. These critical factors not only lead to lower turnover rates, but also reduces costs associated with employee turnover such as the cost of recruiting and onboarding new employees.

3. Improved Customer Experience

Engaged employees are more likely to provide better customer service and increase satisfaction. A joint study by Culture Amp and Zendesk found that companies with employee engagement scores above their benchmark scored 10% higher on customer satisfaction than companies below the benchmark. The same study also found that companies with high employee engagement scores had 2 to 3 times more top performers whose customer service scores were 16% higher on average than low-performers.

When customers interact with engaged employees, it creates a more positive experience from beginning to end. Engaged employees are more likely to go above and beyond in meeting customer needs, providing knowledgeable advice, and addressing customer complaints with empathy. Engaged employees also have a greater sense of ownership for their work, leading to improved problem-solving skills and better decision-making. All these factors contribute to higher customer satisfaction rates and loyalty which ultimately leads to more business success.

4. Increased Profits

Engaged employees are essential for business success because they can drive increased profits and revenue. According to Gallup, employee engagement is directly correlated to the bottom line, the profitability of companies that have a highly engaged workforce outperforms their peers by 23%.

Engaged employees are more productive and innovative, leading to better problem-solving and decision-making. This approach to work leads to increased efficiency, higher productivity coupled with higher work quality, and improved customer service. All of these factors lead to higher profits and revenue growth for businesses.

Moreover, employee engagement leads to increased employee loyalty which leads to better retention rates. This allows companies to benefit from the knowledge and skills employees have acquired over the years, instead of needing to constantly recruit and train new personnel. Businesses are then able to lower employee turnover costs which lead to higher profits over time.

5. Improved Safety

Employee engagement also has a positive impact on employee safety. Engaged employees are more likely to pay attention to safety protocols, follow the rules and regulations, and take necessary precautions to avoid hazards in the workplace. According to a paper from Harvard T.H. Chan School of Public Health, "engaged workers are more aware of their surroundings and best practices around safety, and are more likely to take steps to protect their co-workers."

The safety and well-being of employees at work are important objectives for all companies. When employees feel appreciated for their work and that their opinions are valued, they take safety protocols more seriously. Engaged employees are also more likely to speak up if they feel that safety protocols are not being followed, which is a great source of input to improving workplace safety.

6. Improved Culture

Employee engagement creates a positive and inspiring working environment. When employees feel valued, it fosters open communication between colleagues and creates an atmosphere of trust and respect. It also encourages collaboration as team members are more likely to offer their ideas and take on tasks knowing that their contributions will be appreciated.

A culture of employee engagement also allows employees to identify with their work and the company as a whole. They feel that they are part of something bigger than themselves which can help them stay motivated, inspired and productive at work. This leads to higher employee satisfaction which further drives a more positive corporate culture.

Having a culture of employee engagement also helps businesses attract and recruit top talent. When potential job seekers see that a company values their employee's opinions and contributions, they are more likely to want a role in that business. This can create a competitive advantage when it comes to hiring the best people because top performers want to work in stable work environments where their contributions are valued.

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Strategies For Creating an Engaging Workplace Environment

Now that you know why employee engagement is essential for business success, how can you go about improving it? There are several strategies that businesses can use to improve employee engagement, including:

A. Invest in Employee Training and Development

Invest in employee training and development programs that make sure employees are up-to-date with the latest trends and skills necessary in their industry to perform well on the job. When companies invest in the career development of their employees this makes them feel more valued. This gives employees a sense of purpose and motivation, which drives their engagement forward and makes it more likely that they are invested in the success of the company.

B. Regularly Recognize and Reward Employees

Recognizing and rewarding employees for their hard work is an effective way to show employee appreciation. Companies can set up reward systems such as employee of the month awards or recognition programs to let employees know that they are valued and appreciated. Rewarding employees for their efforts will encourage them to continue putting in their best performance, which drives higher engagement and overall satisfaction with the company.

C. Foster Open Communication and Encourage Feedback

Open communication between employees and management is essential for employee engagement. Create an environment where employees feel comfortable voicing their opinions and providing feedback. This helps management understand how employees are feeling and what issues need to be addressed, which improves employee engagement.

D. Promote Flexible Working Arrangements

Offering flexible working arrangements is a great way to demonstrate employee appreciation. The covid-19 pandemic has created a new opportunity for companies to re-imagine the workplace and create new working arrangements. Flexible schedules, such as the ability to work from home or have compressed work weeks, can help employees manage their lives better while still contributing to the success of the business. Promoting these arrangements demonstrates to employees that employers are interested in their well-being and encourages employee engagement.

E. Create Opportunities For Socialization and Team Building

Creating opportunities for employee socialization and team building is a great way to foster employee engagement. This could include hosting virtual team building events, scheduling social activities, or encouraging more casual conversations. There are plenty of great social and team building activities that your team will find fun and exciting. The goal is to establish personal connections between employees to create strong working relationships that can help build trust and camaraderie in the workplace, leading to greater employee engagement.

Female employees having fun


Employee engagement is essential for business success. It can lead to increased profits, better employee retention rates, improved employee safety, and a stronger work culture. All of these factors can help businesses stay competitive in the market and perform well over time.

Employee engagement is not just about recognizing employee achievements or sending out surveys; it's about creating an environment where employees feel valued and appreciated for their contributions. It's about creating a culture of trust and respect that encourages collaboration, innovation, and employee engagement.

Engaging employees is not always easy but it's worth the effort in the end. By creating an employee engagement culture, businesses can create a highly motivated and productive workforce and be in a better position to reap the rewards of success.

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