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Employee Engagement Statistics for 2024

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Consider it a glass-half-full situation. On one hand, you can look at the positive: 70% of employees are engaged in the best-performing companies in the U.S. About two out of every three employees feel good about their work. 

But in the companies Gallup did not consider “best practice” organizations for their poll, the glass looks more than half-empty. Only 33% of employees are engaged across the U.S. 

It’s easy to say that employee engagement ebbs and flows, that it doesn’t truly matter if employees are feeling cooperative at work or scrolling through their phones and waiting until 5 p.m. But engagement directly impacts the bottom line. Engaged employees mean a more productive workforce, which in turn leads to profitability gains of 21%. Glass half empty? That means your disengaged workforce can lead to lower profitability—and that’s before exploring other problems like a high employee turnover rate.

It adds up. According to Gallup’s State of the Global Workplace 2022 report, disengaged workers were responsible for shaving $2.8 trillion off the U.S. GDP.

Employee engagement is clearly a drain on your company’s time, morale, and resources. But let’s put this into context. What stats show the connection between lack of engagement and lack of revenue? What stats show that a turnaround in employee engagement creates tangible results in morale and reduced employee churn? The proof, as they say, is in the pudding. Here are the stats you’ll need to know.

Why does employee engagement matter so much?

Think of employee engagement as the fundamental measure of your company culture. A strong culture leads to success, while a weak one leads to a high number of employees mentally checking out and leaving en masse. 

But let’s get specific. Gallup’s meta-analysis “further confirmed the well-established connection between employee engagement and 11 performance outcomes,” including:

  • Customer loyalty and engagement: Great employee engagement leads to great customer service—which is reflected in how your employees treat customers. Gallup saw a 10% correlation between customer loyalty and engagement.
  • Profitability: The more engaged your employees are, the more invested they feel in your success. Though the state we quoted above said 21% improved profitability with engaged employees, Gallup saw a few extra ticks—23%.
  • Productivity: Engaged employees are focused and ready to concentrate at work—not to mention bring the motivation that makes them more productive. Gallup’s estimated improvement in sales productivity was 18% for engaged employees.
  • Improved turnover rates: If you have engaged employees, they’re less likely to leave, incurring the costs of recruitment and onboarding new employees. For low-turnover organizations, 43% improvements in turnover resulted from having more engaged employees. Organizations with high turnover rates saw 18% improvement.
  • Safety incidents: Lack of concentration can lead to safety hazards, especially in high-risk industries. Engaged employees help reduce safety incidents and accidents by 64%.
  • Theft: If employees don’t feel valued, they may even start to take value from your company at greater rates. Theft can go down as much as 28% when employees feel engaged.
  • Absenteeism: An absent employee can throw a wrench in any project. Engaged employees are less motivated to check out for a day. In fact, absenteeism can go down 81% if employees feel engaged.
  • Patient safety: Especially important in healthcare, engaged employees lead to better patient interactions, improving their safety. Thanks to decreased mortality and falls through employee engagement, you can expect a 58% improvement in patient safety incidents if your results reflect the statistics.
  • Quality: If you make products, engaged employees are more likely to spot defects, according to Gallup. Expect a 41% improvement in quality—or reduction in defects—according to the Gallup numbers.
  • Wellbeing: It’s not just about your company. Engaged employees also thrive more as individuals. As the Harvard Business Review points out, researchers showed that poor engagement leads to increased feelings of stress and pressure. And this lack of work-life balance adds up to hidden costs. According to HBR, “[researchers] reported that healthcare expenditures at high-pressure companies are nearly 50% greater than at other organizations.”
  • Organizational “citizenship”: Define this as participation within your company. Do employees feel like they’re a “citizen” of your established company culture?

It all stems from that basic variable: the engagement of the employee. An employee who feels connected to their work is more likely to pay attention. They’re more likely to want to come to work. They’re more likely to focus on work quality when they’re present. And as Gallup demonstrates, these improvements all show up in the numbers.

What’s the bottom line? When Gallup looked at 49 publicly traded companies, they found that companies with “a critical mass of engaged employees” outperformed their competition on the stock market.

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The impact of employee engagement—or lack thereof

More profitability, better company performance—these are easy reasons to root for employee engagement. But we should look closer to the root causes. Why exactly does engagement translate to the bottom line?

Simply put, employee engagement helps determine whether employees are detached from, or “less satisfied with,” their organization’s missions, says Gallup. This impacts the kind of work employees provide on a fundamental level. If they feel unattached to their role, they’ll feel unattached to your company’s central goals. 

The ideal employee is typically one who connects to that mission. As Simon Senek, author of Leaders Eat Last, once said:

“When people are financially invested, they want a return. When people are emotionally invested, they want to contribute.”

The happier your employees are, the more they contribute simply by feeling engaged by the work they do. For example, happy employees tend to stick around, which invests them further into the core mission of your company. This isn’t only a great way to ensure your employees are happy, but makes management easier. 

After all, having a good employee retention rate is a key challenge for managers. Over 63% of companies say retaining employees is harder than hiring them. On the other hand? 87% of employees are less likely to leave their current job if that job engages them.

The trends impacting employee engagement

What’s the stereotypical “story” of an employee and employer relationship from the days of yore? It was simple. Get hired at the job. Climb the corporate ladder for 35 years, rewarded with promotions along the way. Then you’d retire.

But that’s simply not how it works these days. The 2008 Great Financial Crisis had a lingering effect on the millennial generation’s psyche: for many, the mass layoffs meant any sense of loyalty went out the window.  Millennials don’t except much loyalty from a company. In consequence, they don’t promise much in return. It’s resulted in something of a standoff: the standards are higher for employee-employer relationships and how engaging they feel.

Let’s explore some of the psychological trends behind this need for increased engagement:

  • Millennials are ready to quit. In fact, 80% of millennials say it’s okay to quit a job if the job is simply not what they expected. This leads to a lot of job-hopping. Millennials don’t feel any particular loyalty to each new employer, which means they’re always looking for something bigger and better—if they can find it.
  • The COVID pandemic changed how people feel about engagement. Want to know an odd fact? The peak level of employee engagement for employees under 35 years old was 40% in 2020—the height of the COVID pandemic. A great number of employees changed their standards for how they should work. Coming into the office was no longer the norm for promoting engagement. Employees can feel just as engaged when they work at their own pace—often from remote settings.
  • Employees don’t have to look for new jobs to jump ship. Maybe you figure that your current employee engagement is “enough.” Why bother with new employee engagement initiatives if everyone seems relatively satisfied? Simple: because employees are ready to jump ship and increase your churn if they get the right offer. In fact, 73% of employees are ready to jump at the right offer, even if they’re not actively looking for a new position.

How to get employees to feel engaged again

It’s a stark picture. When employees aren’t engaged, there are costs—both hidden and obvious—across your entire organization. So what are you supposed to do to increase engagement, decrease voluntary turnover, and retain the best talent? Fortunately, the employee engagement statistics also paint a picture for diagnosing and addressing your lagging engagement:

  • Clarify employee roles. “The most fundamental engagement element is knowing what is expected of you,” writes Gallup. Their meta-analysis across over 100,000 teams found links between role clarity and outcomes like “productivity, employee retention, safety, customer engagement, and employee wellbeing.” Think of clear, well-defined employee roles as the shortcut to better engagement. And there are benefits beyond high engagement. Clear roles also help you support high-performing employees.
  • Show employees you value them. A survey by the American Psychological Association and Harris Interactive found that “employed adults who feel valued by their employer are significantly more likely to report being motivated to do their very best for their employer (93% vs. 33%).” To improve that feeling, you have to actively communicate what you value about your employees—and point out what they’re doing right.
  • Figure out what employees like to do. A Harvard Business Review piece pointed out that the more companies talked with their employees about what they loved to do, the better their results. They cited a study by the Mayo Clinic which said that if less than 20% of an employee’s work involves what they love to do, they’re much more likely to suffer from burnout.
  • Offer more flexible working options. As the pandemic showed, employee engagement among young people was highest when people were working from home. It shouldn’t surprise you, then, that “When organizations shift from this environment to one of radical flexibility where employees have choice over where, when and how much they work, 55% of employees were high performers,” according to Gartner
  • Create employee recognition programs. People want to be recognized for their work. If they do put in more engagement, do you reward it? If not, why engage at all? 37% of employees think recognition is the most vital factor for their success and motivation at work. 
  • Engagement surveys and corporate initiatives. You can’t just throw darts at the wall and see what sticks. You should see what’s driving your specific organization’s lack of engagement. And that’s where surveys come in.

Beyond the numbers: getting employees more engaged at work

Employee engagement isn’t just about feeling good. As we’ve demonstrated above, good employee engagement will improve profitability, productivity, safety, and employee wellbeing. It’s the ultimate win-win at work. But it starts with knowing your statistics.

Are you ready to run an employee engagement survey and see the sore spots you can improve the most? We encourage you to reach out to Peoplelytics and book a demo for our employee engagement survey platform today.

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