Employee engagement is a major focus in modern PeopleOps for good reason — it affects productivity, employee retention, and profits. The data is undeniable:
The Latest Employee Engagement Statistics
- According to Harvard Business Review, 92% of executives believe that engaged employees drive higher company performance.
- 72% of respondents also believe engaged employees translate into an overall positive customer experience.
- Engagement has 3.8x as much influence on employee stress as work location.
- Disengaged workers have also been found to be 18% less productive.
- It is estimated that lack of employee engagement is costing US companies between $450 and $550 billion a year, putting major pressure on profitability.
- In their latest State of the Global Workplace Report, Gallup also estimates that low employee engagement costs the global economy US$7.8 trillion every year.
- According to Gallup, the authority on employee engagement, a mere 32% of US employees are engaged at work.
- On the other hand, 17% of US workers are “actively disengaged” - Gallup’s term to define employees who are “miserable at work”. More precisely, they describe the actively disengaged as employees who are “unhappy and unproductive at work and liable to spread negativity to coworkers.”
- Although 32% engagement sounds low, it is significantly higher than the median. Globally, just 21% of employees surveyed reported feeling engaged at work, while 19% reported being actively disengaged.
- Surprisingly, despite seeing the value of highly engaged employees, only 37% of executives surveyed for the Harvard Review (cited above) reported that employee engagement is a significant area of focus for their own organization.
We’ve studied multiple sources to better understand the enigma that is employee engagement. What we found was that:
- Employee engagement is difficult to measure due to te various definitions that exist.
- Companies can drive increased engagement by simply conveying purpose.
- Employee engagement has a dark side that can lead to counterproductivity.
Demystifying Employee Engagement
Statistics on What Employees Want
- 77% of employees believe that they do their best work when they are highly engaged.
- 76% believe their ability to be engaged is driven by a culture of engagement within the company.
- 74% of workers believe working in a company with a culture of engagement helps them deliver excellent customer service.
What comes to mind when you think about an engaged employee? Is it job satisfaction? Do you think of the person who shows up first and leaves the office last? Is it the one with the most innovative suggestions? Maybe you think of engagement as a head-down type of productivity — someone who is great at getting things done.
2022’s rise of quiet quitting has brought much of what we understand regarding employee engagement under scrutiny.
Quiet Quitting Statistics
- Gallup reports that, during the second quarter of 2022, the slice of the U.S. workforce that is engaged workers remained at 32%.
- However, the proportion of actively disengaged increased from an initially reported 17% to 18%.
- This 18% does not represent the quiet quitter. These are the so-called "loud quitters" who are vocal about dissatisfaction, and likely already looking for alternative employment opportunities. Quiet quitters fall between those who are actively engaged, and actively disengaged.
- Still, Gallup speculates that quiet quitters make up at least 50% of the U.S. workforce.
But Does Quiet Quitting Equate to Disengagement?
According to Blaise Radley of Workday, an engaged employee will “bring their full self to work and feel supported by their employer at each stage of their employee journey.”
Quiet quitting has similar connotations to other workplace phenomena like “coasting”, “work-to-rule” and the Chinese trends of “involution”, “tang ping” (lying flat), and more recently “Bai Lan” (let it rot). It is a reaction to the expected overperformance of “hustle culture” and ongoing burnout. Some experts believe quiet quitting is synonymous with employee disengagement, but a lot of voices disagree.
In a poll run by HR Chief, 57% of respondents said the term refers to setting healthy work-life boundaries, while 19% said the objective is to do as little work as possible. It is completely plausible that a person who does not sacrifice their free time to do extra unpaid work and does not take on work outside of their own directive is “bringing their full selves to work” and leaving on time to also bring their full selves home.
Research on productivity shows that being able to disconnect from their job is also what allows workers to perform optimally at work.
What is Employee Engagement?
The truth is, many definitions of employee engagement exist. What you count as engagement and how you measure engagement has a lot to do with your organization’s priorities.
Broadley speaking, employee engagement is a maintained personal investment and loyalty towards a company that goes beyond what is verbally required from the job. According to Quantum workplace, a highly engaged employee will “put in extra effort to help the organization succeed” and encourage colleagues to do the same.
In a LinkedIn poll we ran, the majority of voters said an engaged employee “thinks beyond their job title”. Interestingly, none of the responders opted for saying an engaged employee “puts in extra effort and hours”. The responses to the poll were as follows:
- The vast majority of responders (72%) said an engaged employee thinks beyond their job title, in terms of how their work affects the greater organizational goals.
- 16% of responders believe an engaged employee is content in their job and work, so not intending to move.
- A mere 8% of responders said an engaged employee does reliably great work.
- Only 4% believe an engaged worker necessarily puts in extra effort and hours beyond their job description.
Consequently one could argue that employee engagement is more correlated with an employee’s mentality towards their work than how much work they do or how much time they devote to it.
The key consideration here is that an engaged employee is so dedicated to their duties and their employer because they have a genuine emotional investment in the organization’s wellbeing. Not because of fear that they will get fired or overlooked for promotion if they don’t pull extra hours. Feeling this level of pressure would likely lead to employee burnout.
Statistics About Employee Engagement and Wellbeing
Cultivating a culture of employee engagement correlates heavily with employee wellbeing. Presenteeism, where employees come to work sick due to job insecurity or fear of appearing inefficient, is a major obstacle to engagement. So does a culture of overloading employees with work and unattainable standards of productivity.
Although encouraging employees to go home to get decent rest may not be the immediate thing that comes to mind when work is hectic, it may be the best thing for retained engagement.
Gallup includes surveys for engagement and overall wellbeing in their annual State of the Global Workplace Report. The 2022 edition reports that:
- Employees who are engaged at work, but not thriving in their personal life, have a 61% higher likelihood of ongoing burnout than those who are both engaged and thriving.
- The report found that, globally, only 9% of employees reported thriving in terms of personal wellbeing and also feeling engaged at work.
- 57% of workers across the world are neither engaged nor thriving in life.
- Worldwide, nearly a quarter of employees are sabotaging their health by working excessively long hours.
- Wellness is the counteraction here. 67% of companies with an established wellness culture are engaged with the organizational mission and goals.
- This is compared to only 31% where wellness is not embedded in the culture.
How Workplace Stress Diminishes Employee Engagement
80% of workers are stressed out by work, but a continuously overloaded employee cannot remain engaged. According to Access Perks, “Ignoring stress in employees, even if it comes from outside sources, is potentially fatal. Besides crushing your productivity, too much stress can create active disengagement and resentment. Those lead to turnover and in some cases, sabotage.”
Employees report the top reasons for work-related stress (which causes disengagement) as low salaries (56%), long hours (54%), and too little opportunity for career advancement (52%). This explains why the barrier stress puts on engagement is more evident in lower-level employees.
According to the American Psychological Association (APA), senior employees are more likely to be engaged and fully satisfied at work compared to their juniors.
A study conducted by Quantum Workplace in 2019 clearly shows the correlation between the physical, emotional, and financial wellness of employees, and their level of engagement. In all results, engagement is noticeably lower among employees with poor wellness.
The study shows that employees who reported very low physical, financial, and emotional wellness, also scored a median 46.3% for engagement favorability. This is compared to an average 94.3% engagement favorability scored by employees who reported very high levels of wellness.
Wendy Cartwright, former HR Director of the Olympic Delivery Authority, and Chair of The Engage for Success (E4S) says: “When organizations really pay attention to the factors that facilitate staff wellbeing, this can help to generate a feeling of connection with the organization and stronger employee engagement.”
Furthermore, survey results from the non-profit Health Enhancement Research Organisation (HERO) reveal more than 90% of business leaders say that promoting wellness can affect employee productivity and performance.
Statistics on How Employee Engagement Drives Performance
Above we argue that an engaged employee is not necessarily defined as one who stays late to do extra work. However, we can argue that employee engagement is a key component to ongoing productivity and organizational success. Especially taking these statistics into account:
- 72% of executives strongly agree that highly engaged employees create happy customers.
- When they compared organizations with high employee engagement to ones with low engagement, Gallup found high employee engagement drives customer engagement. The difference is a 10% higher customer loyalty score.
- The companies with high employee engagement also have 41% fewer product defects.
- Additionally, engaged employees are more resilient. Even through tough times like the recent pandemic and resulting recession, companies in traditionally high-turnover industries with an engaged workforce reported 43% fewer separations than those without.
- For companies in low-turnover industries, this figure is 18% lower if they have high employee engagement.
- How engaged your current employees are influences the quality of your future hiring potential. This is because 71% of employees use or have used referrals from an organization's current employees to learn about job opportunities.
Jim Hartner, the Chief Scientist at Gallup believes engaged employees have a higher sense of ownership towards their organization, and a higher sense of autonomy. He notes that these employees put in more discretionary effort to improve the company.
Statistics on How Employee Engagement Affects Profits
All said and done, companies should care about employee engagement because it matters to their bottom line.
- In their comparison between organizations with high and low employee engagement, Gallup found that high-engagement companies reported 23% higher profits.
- The same companies reported 28% less shrinkage - a company's allowance for loss due to wastage or theft.
- Employee engagement also improves retention, which means the cost of replacement is reduced. Reportedly, a highly engaged workforce sees 67% less turnover than one where engagement is low.
- According to calculations published pre-pandemic, the cost of an actively disengaged employee is roughly 34% of their salary. Doing the math is scary.
To calculate the cost of disengagement in your organization, take the number of people on your payroll, and multiply by 17% (the percentage of actively disengaged workers in the US). Now multiply the result by the average annual salary, and that number by 34%.
What you’ll see is salary outlay lost to disengagement.
How Remote Work Affects Employee Engagement
After the pandemic caused a mass migration of knowledge workers to remote work, companies have been pushing hard to return employees to the office. Contributing factors to this post-pandemic return include fear that productivity and engagement have suffered while workers were based at home.
Statistics on employee engagement and productivity indicate this is not the case.
Remote Work Engagement Statistics
- According to Quantum Workplace, on-site employees report the lowest engagement. Of surveyed workers, 72% claimed to be highly engaged.
- By comparison, 78% of fully remote workers reportedly have high engagement.
- The best employee engagement was reported by hybrid workers, with 81% of surveyed employees reporting that they were highly engaged.
- 77% of remote employees report increased productivity since they moved away from an in-office model.
- 79% of remote employees agreed that moving to remote work had a negligible effect on their day-to-day performance.
Remote Work Productivity Statistics
- In contrast to concerns that remote workers are less productive, their over-productivity reaches levels of concern. 17% of hybrid employees work over 50 hours a week.
- This statistic is followed by 11% of fully remote employees also working 50 hours per week or more, and only 8% of on-site employees putting in such long hours.
- A study by Stanford University found that remote workers regularly meet and exceed objectives. On average, remote workers score 13.5% higher productivity points compared to their office-based counterparts.
- The same study found these workers to be 9% more engaged, and 50% less likely to leave their employer for a new job.
Creating and Fostering an Engaged Workforce
Now that we’ve established the value of employee engagement, we need to look at ways of fostering engaged teams. There are two components to this:
- Tools that facilitate engagement tracking and provide actionable data, and
- Initiatives for creating a culture of engagement in the organization.
HR Tech to Promote Employee Engagement
Employee Engagement Software
While something as elusive as job satisfaction is difficult to quantify in a universally accepted manner, it is possible to create your own system of measuring engagement rate amongst workers. This should be based on your company’s values and a metric that your employees agree with.
Once you have a baseline standard of what engaged employees look like, you can measure where your employee engagement statistics fall on this scale on an ongoing basis. Tracking people analytics with engagement surveys on a departmental and individual level means you can catch barriers in employee engagement much sooner than if you waited for obvious signs of disengagement.
Employee engagement software allows leaders to keep their hand on the pulse of their organization and see what managers need more training, which teams have higher flight risk, and how key objectives are being met within the organization.
Employee Recognition Programs
Although most organizations start out with a manual culture of regulation, this soon becomes impractical and does not scale.
Employee rewards and recognition has evolved into one of the most important components of any company's employee experience, so it must be done right. Employee recognition software creates sustainable, easily accessible means of integrating recognition into the organizational culture.
Reward Gateway, a global authority on employee recognition, published research that undeniably links employee engagement to employee recognition. According to their 2023 Employee Engagement Trends Report, A full 60% of US employees want their employer to increase their investment in employee reward and recognition. The data also notes that 69% of employees feel their work wellbeing would improve if they were simply thanked more for their hard work.
We interviewed Alex Powell, Director of Client Cultural Insights at Reward Gateway, about this data, and the employee engagement barriers organizations must address in 2023. Her insights are profound. For starters, don't bother rewarding employees with spa vouchers when all they want is diapers and gas. Here is a recording of the 20-minute interview.
People Analytics Tools
People analytics, also known as HR analytics, involves collecting and analyzing people data to improve organizational decision-making. Software for capturing and monitoring people analytics helps you keep track of important engagement indicators, like absenteeism, employee retention and attrition.
Creating a Culture of Employee Engagement
Employee engagement is not something that can be forcibly instilled or attained overnight, and it is certainly not attainable through one solution. An effective performance review system is a good start - just 5% of HR leaders are satisfied with their current performance review system. Here are some statistical considerations for employers hoping to drive engagement in their organizations:
Monitoring and Managing Engagement
Employee engagement software allows companies to keep their hand on the pulse of their organization to see what managers need more training, which teams have higher flight risk, and how key objectives are being met within the organization.
Employee Experience is the Starting Point
- Research conducted by McKinsey shows that workers who report having a positive employee experience are 16 times more engaged at work than workers who report a poor experience.
- A culture of engagement positively affects employee retention. A positive employee experience makes it eight times more likely that the employee will want to stay at a company.
- The research shows that employees at companies with remarkably high employee experience scores are more inclined to surpass expectations, these employees are reported to have a 40% higher level of discretionary effort compared to the staff at other companies.
According to McKinsey, fostering a great employee experience starts with “a clear, honest appraisal of current employee needs, supported by data as well as by tools and assessments grounded in organizational science.”
The metrics that you’d look at to monitor employee experience are very much in line with how you’d determine engagement. While a lot of factors play a part in creating a positive employee experience (organizational culture, employee perks and benefits, and recognition to name a few), it boils down to the value a worker perceives is gained and contributed from working at your organization. In other words, their employee satisfaction, professional development, and career advancement opportunities carry as much weight as their work experiences within your organization.
Statistics on How Purpose Drives Employee Engagement
- McKinsey reports that 70% of employees find their sense of purpose is defined by their work — making purpose an organizational concern.
- When the study asked if people are living their purpose in their day-to-day work, 85% of executives and upper management said yes — that they are living their purpose at work.
- Only 15% of frontline managers and frontline employees agreed to this. In fact, nearly half of these employees disagreed with the statement. Evidently, there is a considerable purpose gap between frontline workers and upper management.
- A survey conducted by Deloitte found that 73% of employees who report working for a purpose-driven company also describe themselves as engaged
- In comparison, only 23% of respondents that don’t feel they work for a purpose-driven company are engaged.
Based on these findings, McKinsey writes: “People who live their purpose at work are more productive than people who don’t. They are also healthier, more resilient, and more likely to stay at the company. Moreover, when employees feel that their purpose is aligned with the organization’s purpose, the benefits expand to include stronger employee engagement, heightened loyalty, and a greater willingness to recommend the company to others.”
Addressing the reason for this proposed gap, the report puts the onus of relaying purpose on managers. It notes that, according to the feedback from frontline employees, shortsighted leadership conditions led them to feel disconnected from organizational purpose.
- Employees were ten times less likely than leaders to say that they’re granted opportunities to reflect on their purpose.
- They were also nine times less likely to say that they’d had the opportunity to work on purposeful projects granted by a manager.
- Communication between the ranks regarding purpose also falls short. Frontline workers in the study were three times less likely than leaders to say that they could see a connection between their daily work and the organization’s purpose.
Statistics on How a Culture of Employee Recognition Drives Engagement
Naturally, if employee engagement hinges on employees caring about the organization they work for, it is also determined by how much the organization cares about employees. Employee recognition statistics clearly show this:
- According to statistics published by Apollo Technical, implementing employee recognition increases employee engagement, productivity, and performance by 14%.
- Additionally, over 40% of American employees feel that if they were recognized more often at work, they would put more energy into their duties.
- 84% of employees found to be highly engaged were also recognized the last time they went above and beyond at work.
- This is compared to actively disengaged employees of whom a mere 25% received recognition.
- Companies with strong recognition programs see 31% lower turnover rates than companies who have no formal employee recognition in place.
- In another study, 37% of surveyed respondents believe more personal recognition, such as personalized recognition wordings for employees would encourage them to produce better work more often.
Though some employee recognition ideas are easily applied in the workplace, the ideal is to bake recognition into the corporate culture by implementing a formal recognition program or software tool. The best employee recognition programs go far beyond congratulating employees on their birthdays and work anniversaries. These tools also encourage meaningful peer-to-peer recognition and ongoing shoutouts.
Over-Engaged Workers - The Dark Side of Employee Engagement
While employee engagement is a sought-after state, there is a level of engagement that can be harmful to the worker and the organization in the long run. According to Timely, an overly high level of engagement can lead employees to have an unhealthy view of work where they never feel as though they have done enough to relax.
Over Engagement Statistics
- The article cites that over 50% of U.S. employees feel like they have to check their email after 11 pm to keep up with work.
- 47% of workers prioritize work over their health and continue to work when they feel unwell.
- A study by Yale found that, among highly engaged employees, 20% were seriously at risk of burnout.
These behaviors are not sustainable and, in the long run, lead to poorer performance, lack of work-life balance, and depleting health.
A study by the Chinese University of Hong Kong (CUHK) found that while high employee engagement does lead to increased job performance, it has a dark side
The researchers found that, when employees are highly engaged, they identify with their jobs to the point where, in psychological terms, work becomes their “extended self”. As a result, they feel they ‘own’ the job.
This sense of ownership incites high performance, proactive behavior, and a willingness for employees to go above and beyond their formal job requirements. In academia, this is known as organizational citizenship behavior. But this sense of ownership can easily become competitive overengagement where workers display territoriality in their jobs.
Territorial ownership becomes a barrier to information sharing and, at its worst, can incite unethical behavior and sabotage. For example, a worker may fail to share insight that can help their colleague succeed, simply because they feel it is “their” knowledge.
Additionally, territorial ownership can make an over-engaged employee feel like their personal space has been violated whenever process or managerial changes occur. This toxic response to a directive can create an unhappy company culture and strained work environment.
Unpacking the Organization's Take on Employee Engagement
Based on these employee engagement statistics, organizations must certainly strive to foster and uphold employee engagement for the sake of business success. But there are many questions to answer truthfully before we can do this. For example:
- How will we define employee engagement and embody this definition in our operations?
- As an organization, what do we understand to be a high enough level of employee engagement? What does this level of engagement look like?
- Are we expecting more commitment from our employees than they get from us?
- Are our efforts to foster employee engagement rewarding presenteeism behavior?
- What will we do when we see employee engagement leading to burnout?
How you answer these questions will already provide insight into the employee engagement strategies that would most benefit your workforce, organization, and profitability.