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Engagement impacts business outcomes in a fundamental way
admin | August 24th, 2017, 8:19 am

By sitting down and writing business plans by yourself with a ground breaking strategy is not enough to drive growth. You need people. Good people to support your goals. People who buy in your thoughts and work whole heartedly to execute the plan.

You may have lot of people asking the question, Why is employee engagement important to a company’s success? Clearly, the pulse of the organization needs to be beating in sync with the management. The Vision-Mission statements need to be reprinted from the print to the daily work ethics and principle of every single employee. You might also like to read Changing Landscape of Employee Recognition

Why is employee engagement important to a company’s success?

Back in 2013, Research from Harvard Business School and the Balanced Scorecard Collaborative, now part of The Palladium Group based in Boston, found that 95 percent of a typical workforce in US doesn’t understand its organization’s strategy. They work merely to earn their living and secure their future. But if they don’t understand your strategy, how would they contribute positively to the organization’s needs? And most importantly, how would they know the right direction and take the right decisions?

GALLUP, in a study in 2016, gave us a deeper insight to the engagement levels across the world.

  • A staggering 87% of employees worldwide are not engaged. Many companies are experiencing a crisis of engagement and aren’t aware of it.
  • 32% of employees in the U.S. are engaged — meaning they are involved in, enthusiastic about and committed to their work and workplace.
  • Worldwide, only 13% of employees working for an organization are engaged.

Recently, AON Hewitt in their 2017 Trends in Global Employee Engagement survey report defines employee engagement as “the level of an employee’s psychological investment in their organization.” As per their study, a disengaged employee costs 10,000 USD annually in profitability to a company. This is indeed a huge figure. Demotivated employees not only contribute much lesser than expected, wasting valuable time and space, they also influence other employees to a certain extent. It creates a self-sustaining momentum which tends to move downward and becomes difficult to reverse unless effective steps are taken to motivate and inspire the workforce on a daily basis.

What the study also measured is the motivation level based on the following three factors: Say, Stay, and Strive. Employees were asked:

  • If they Say positive things about their organization and act as advocates
  • If they intend to Stay at their organization for a long time
  • If they are motivated to Strive to give their best efforts to help the organization succeed

It tries to understand the psychological environment within which an employee works and what he thinks and feels about his company and its leaders.

Another study, conducted by Gallup in 2012 and published in 2013, relates the engagement levels directly to business outcomes. Although the numbers and figures may vary as on today, the fact remains to be noted that employee engagement is a key driver for growth.

The figure below represents impact areas identified under the following categories:

  • Customer satisfaction ratings
  • Productivity
  • Profitability
  • Lower absenteeism
  • Low employee turnover
  • Fewer safety incidents
  • Lower quality defects


What inspires employees to engage with the organization depends mostly on the trust, visibility and credibility given to each other at work. Colleagues help boost each other’s morale. They can uplift and uphold the spirit of the organization. It’s important to recognize each other’s efforts the moment it’s executed. “BRAVO” is the word!!!

I hope we were able to to answer the question, Why is employee engagement important to a company’s success?

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