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Why you shouldn’t underestimate the importance of employee engagement

Employee engagement is a powerful tool, but it’s often undervalued. Demonstrating how it helps reach business goals and communicating this to stakeholders is key in order to strengthen its importance. This will not only bring attention to employee engagement but also spotlight the importance of how it can drive company success, leading it to move from being an afterthought to a main strategy, helping to change perspectives and channel resources to support engagement strategies.

However, our research for The State of Employee Engagement 2023/24 found a worrying trend: the number of organisations reporting a drop in employee engagement over the last year has gone up from 18% to 24%. This underlines the urgent need to tackle these issues and take steps to stop this decline.

In this article, we go through 5 reasons why employee engagement is key to the future of every organisation.

Employee turnover is expensive!

Our research highlighted that 89% of respondents find it increasingly difficult to retain talent, indicating a growing retention challenge. But what’s worse is that 33% of new hires choose to leave within the initial 90 days of joining. Any departure represents a substantial loss of invaluable knowledge, expertise and abilities, significantly amplifying the impact of employees exiting on an organisation’s operations and growth.

Employee turnover indeed carries a significant financial toll. According to the Society for Human Resource Management, replacing an employee can cost as much as six to nine months’ worth of their salary, therefore understanding the motives behind employees departing is paramount. Without uncovering these reasons, retaining talent becomes an uphill battle with little success.

Engaged employees lead to happier customers

There’s a strong correlation between employee wellbeing and customer satisfaction. A happier and more engaged workforce isn’t just a positive internal metric; it directly influences an organisation’s ability to provide enhanced customer satisfaction. This association is particularly prominent in industries where employees interact closely with customers, such as retail, tourism, restaurants, healthcare and financial services.

For CEOs aiming to foster a customer-centric strategy, the lesson is clear: elevating employee morale is a foundational step. The premise is simple but impactful, by prioritising the wellbeing and engagement of employees, organisations lay the groundwork for a customer-first approach that resonates and delivers value.

Engaged employees make it easier to recruit and retain

Engaged employees play an important role in both recruitment and retention efforts within an organisation. Surprisingly, 90% of respondents in our survey found recruitment to be a challenge. The reasons stem from a scarcity of skilled candidates and salary expectations driven up by competitors trying to hire them.

However, engaged employees are powerful advocates who often have connections to skilled individuals, which can simplify finding new talent. Listening to employees and connecting them with your organisation’s mission is a potent strategy for boosting retention levels.

Engaged employees are more productive

77% of respondents from our survey highlight that productivity and performance aren’t getting any better. The connection between employee engagement and productivity is evident in the numbers. In the UK, productivity, measured as output per worker, grew by 2.3% between 1974 and 2008. But from 2008 to 2020, that growth plummeted to just 0.5%.

Research from Gallup also illustrates the connection between employee engagement and productivity, showing that organisations with highly engaged workforces tend to be 17% more productive.

Engaged employees power revenue and sales

Further research from Gallup indicates that engaged employees can make your organisation 23% more profitable. This connection between engaged employees and financial success demonstrates the significant impact of employee engagement on an organisation’s bottom line, which often translates into more efficient workflows and innovative problem-solving, contributing to overall productivity and revenue generation.

Engaged frontline and deskless workers, particularly, play a pivotal role. They possess a vested interest in the company’s success, willingly going the extra mile. This commitment resonates with customers, who benefit from exceptional experiences. Satisfied customers not only return for more but also become brand advocates, sharing positive experiences with friends and family, thereby driving both repeat and new business.


This article contains a snippet from The Business Case for Employee Engagement eBook where we explore essential strategies for HR leaders to secure internal buy-in for investing in employee engagement initiatives for deskless organisations.

Download the eBook here as we dive deeper into HR’s four biggest priorities. To view all our other eBooks, click here.


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