Employee engagement: what it is, why it matters, and how to improve it

One of the biggest outcomes of the COVID-19 pandemic has been a shift to remote and hybrid work. At the height of early lockdowns, more than half of people in the US were working entirely from home. 

The evolving landscape meant that employers were often putting policies and technology into place in real time. Employees learned to adjust to those changes quickly. And while they have experienced the benefits of a flexible model, like a more relaxed dress code, working from home may reduce motivation and employee engagement—and the latter in particular has been shown to play a key role in an organization’s profitability, productivity, and overall success.

What is employee engagement?

Employee engagement is the measurement of how enthusiastic and connected workers are to their place of employment. It can fluctuate regularly, and an employee’s experience in the workplace primarily drives it. 

An employee who has a manager invested in their well-being, has regular conversations about professional development, and feels connected to colleagues is likely engaged. An employee with a manager who is task-oriented and uninterested in their overall development will likely not be an engaged member of their organization. 

Just how engaged are employees anyway? Gallup research found that nearly 85% of employees worldwide are not engaged or are actively disengaged at work. In the US, rates historically hover around 65%. 

The difference between employee engagement and employee satisfaction

A satisfied employee is not necessarily the same as an engaged one. Satisfied workers may show up happy, complete their work, and have few complaints about their organization, but they may not hesitate to exit if a perceived better offer comes along. In contrast, engaged employees perform to help their organization reach its goals and feel deeply connected to it.

Companies that focus on improving employee satisfaction versus engagement may not see the same return. Factors like work environment, compensation, and organizational structure contribute to how employees feel about their jobs, but they do not always lead to their long-term commitment or willingness to go above and beyond for their organization. 

Why is employee engagement important? 

There are a variety of reasons why organizations should invest in improving employee engagement:

• Increased employee performance: According to Gallup, robust employee engagement is a “strong predictor of performance during tough times such as economic recessions.”
• Increased business performance: Businesses with engaged employees have 21% higher profitability and 17% higher productivity. One study found that business units that score in the top half of employee engagement more than double their odds of success. Businesses in the 99th percentile of employee engagement have nearly 5 times the success rate of those in the first percentile.
• Higher employee retention: Insights from Workday illustrate that an employee’s engagement metrics will forewarn of their potential departure 9 months before they leave.
• Better customer experience: Research has shown that bettering the employee experience does the same for that of the customer. In fact, Harvard Business Review found that improvements in a company’s employee ratings on Glassdoor correlated to an increase in customer satisfaction scores.

How to improve employee engagement

Where employees spend their time for work can affect overall engagement, so companies are working to achieve a balance between remote, hybrid, and in-office work. This is especially important as organizations work to accommodate immediate flexibility and long-term employee buy-in. 

Uber’s Vice President of Workplace and Real Estate, Michael Huaco, shared insights on the continued value of being in offices: “There’s a real need if you think about human nature. People want to be together…. That’s where innovation really happens.”

Even as employees return to offices, many businesses are implementing more remote and hybrid options to maintain flexibility. In fact, 61% of CEOs surveyed by PwC believe low-density workplaces will be an enduring shift in the post-pandemic landscape.

Get our guide on flexibility in the workplace →

Keeping engagement high, no matter where employees work, will remain key. We turned to some of the leading employee engagement experts to see how they recommend ensuring that employees are engaged. Here are 5 of their top tips:

1. Align company values with employee values

Organizations that work beyond becoming leaders in their industries tend to see higher engagement among employees. Workers are more likely to feel connected when their companies contribute to social or environmental issues, like climate change and equity in the workplace.

Research from Qualtrics showed that employees are more likely to recommend their place of work to others if they feel the company’s values and mission are aligned with their own. Some are even willing to take salary cuts in order to work at businesses that they perceive as having better values.

2. Motivate employees by solving meaningful problems

How can business leaders keep remote employees motivated and engaged? Harvard Business Review suggests business leaders to task teams with the opportunity to experiment and create impactful work. 

While this may not be a quick fix, or even easily identifiable, it encourages leaders to ask employees what they feel the organization needs. Some starting questions include:

• How can we improve our customer experience? 
• What is broken that we can fix? 
• What is a meaningful change we can make, even when things are uncertain?
• Why are these problems important for us to focus on? 

This could include simpler fixes, like improving email communication with customers, or more enhanced updates, like adding a new product to fill a gap in your offerings.

3. Encourage strong relationships with colleagues

While employee engagement is often viewed as solely an HR initiative, managers and leaders throughout your organization should be actively involved. Gallup reports that “managers affect 70% of the variance in team engagement.” 

It’s important to encourage managers to take an even more proactive approach to employee engagement, asking questions about topics such as professional development, regular goal setting, and feedback. Managers are responsible for relationships with their employees, which greatly affects employees’ experiences and overall engagement level. 

This points to an opportunity for further investment in management training. It’s also an opportunity to encourage employees to get to know their leaders and one another. 

Even if people are not meeting in person, encourage managers to book time for virtual team-building activities. Something as simple as a team lunch, where employees can choose their favorite meal for delivery, can go a long way toward building relationships and driving collaboration.

4. Focus on holistic wellness

According to Accenture, wellness is a crucial component for keeping employees engaged—especially with younger generations of workers. Employees value their health, and businesses value healthy employees, so wellness programs can have a high return on investment. 

Accenture recommends focusing on stress-reduction technologies and cultivating a human-first culture. Adding health technology might mean providing access to a meditation app, wearables, or a stipend for healthy meals or a gym membership; a human-first culture is a larger initiative. 

From the top down, that means an empathetic workplace with the opportunity to send feedback upward. Good mental and physical health are key to keeping employees feeling safe and like engaged members of your workforce.

Download our insights on how to communicate employee wellness benefits → 

5. Create a culture of recognition 

It may seem obvious, but employees who feel like their work is recognized are more likely to reach their full potential and continue delivering for their organization. They’re also less likely to leave their organization. In fact, companies with embedded employee recognition programs had 31% less turnover than those that did not. For this reason, it’s important to cultivate an environment where people’s great work is acknowledged and celebrated. 

Awards, pay raises, and other physical perks are appreciated, but work recognition can be a low-cost, high-reward effort as well. A simple thank-you or a virtual pat on the back during a team meeting can go a long way in showing that managers and organizations as a whole value individuals and their accomplishments.

How to measure employee engagement

Employee engagement can be more difficult to track than satisfaction, but there are ways to do it effectively. Identifying measurable factors is the first step in turning data into action. Metrics like intent to stay, well-being, and inclusion are just some of the categories organizations are looking at when assessing their overall employee engagement scores.

Surveys are one method of regularly gauging employee engagement. They’re fairly quick and easy to implement with the ability to reach a large population. One drawback of surveys is that they don’t allow for in-person interaction. But they are helpful in establishing a baseline. Specific types include pulse surveys and Employee Net Promoter Score, which measures how likely an employee is to recommend their company to others.

You can also complement survey data with data gathered from one-to-one conversations between employees and managers or HR professionals. These can be formal during performance reviews or informal check-ins. In addition, exit interviews provide insight into why individuals are leaving their companies. Beyond this, metrics like turnover rate and average employee absenteeism are other ways to tally your organization’s engagement score.

More on increasing employee engagement 

No matter which strategies your company uses to up engagement, including employees in the discussion is paramount. Take the time to explore what people are looking for, whether that’s more flexible working environments or more wellness opportunities. Your people can provide the greatest insight into what it will take to keep them engaged and dedicated to your organization.

Learn how Uber for Business can help bolster your employee engagement efforts →