June 26, 2023
20+ Employee Engagement Statistics That Matter in 2023
No matter your role inside business today, you’re probably feeling it. Stress and burnout levels are high and the overall engagement of many employees is alarmingly low.
The latest data on employee engagement from Gallup indicate just 32% of full- and part-time U.S. employees are engaged at work, while 18% are actively disengaged. All of this disengagement underscores why there’s been so much concern in recent months over employees “quietly quitting” at work, or simply going through the motions until they find a new gig.
In fact, disengaged employees cost the world $7.8 trillion in lost productivity, according to Gallup's 2022 report on the state of the global workplace. That’s equal to 11% of global GDP.
Even with the statistics on engagement so evident (more on that later), in many cases, top leaders are doing little meaningful work to reverse the trend. For some, the focus on making work engaging and motivating may seem like the “soft” part of business, something to address but not necessarily with a full-court press.
Yet the employee engagement data is very clear: employee engagement is a key driver of success for organizations today, which means engagement deserves far more attention than it gets.
What Is Employee Engagement?
Employee Engagement is an emotional connection employees have with their work. The emotional connection brings all kinds of benefits. It helps employees feel more excited to come to work because they are connected to their colleagues and leaders and feel they are doing work that’s meaningful and interesting. It also often results in something extra – extra time, extra energy, extra brainpower. Employees go above and beyond with discretionary effort because they’re motivated to do so.
Many of us have had the satisfaction of experiencing real engagement. There’s nothing better than looking forward to coming to work, spending time with colleagues and leaders that you respect and trust, and knowing that your work makes a difference.
What Does an Engaged Workforce Look Like?
Employees who are engaged tend to take some of the following daily actions:
- Extend extra time and effort to do exceptional work
- Make suggestions for improvements; act as innovative problem solvers
- Regularly offer help to colleagues facing a challenge
- Naturally recruit others to the company by sharing their own positive experience
- Demonstrate company values with conviction, show integrity in decision making
- Enjoy coming to work every day and feel grateful for the work experience
Why Does Employee Engagement Matter?
Top company leaders often point to engagement as a key contributor to a company’s success. Consider the reflections of three prominent leaders on engagement:
- “It goes without saying that no company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.” – Jack Welch, former CEO of GE
- “To win in the marketplace, you must first win in the workplace.” – Doug Conant, former CEO of Campbell’s Soup
- “Leadership is hard to define, and good leadership even harder. But if you can get people to follow you to the ends of the earth, you are a great leader.” – Indra Nooyi, former CEO of PepsiCo
Even though many leaders recognize engagement as critical, some miss the signs of employees who’ve checked out and begun to search for a new and better role. McKinsey researchers recently addressed this reality in a piece titled, “Help your employees find purpose – or watch them leave.” Researchers wrote, “Employees expect their jobs to bring significant purpose to their lives. Employers need to help to meet this need or be prepared to lose talent to companies that will.”
Over the past year, more CEOs have begun to report a growing concern over the lack of engagement from their teams. For the 2023 Engagement Trends Annual Report from the employer survey platform People Element, CEOs were asked about the “biggest challenge they faced throughout 2022.” The CEOs overwhelmingly referenced “talent” as a top concern. Specifically, “engagement of remote employees” was the 5th highest concern of CEOs questioned for the survey, which gathered feedback from employees from more than 200 organizations.
One of the big contributors to employee disengagement is the growing stress and mental health challenges employees face. According to stats in a 2021 report published in the Harvard Business Review, mental health challenges are now the norm among employees across all organizational levels. Researchers Kelly Greenwood and Julia Anas reported on their survey of more than 1,500 U.S. employees in full-time jobs, finding that 76% of respondents reported at least one symptom of a mental health condition in the past year, up from 59% in 2019.
The researchers emphasized how mental health concerns were impacting every level of employee. “Perhaps as a result of having to lead through this unprecedented era, our 2021 study showed that C-level and executive respondents were now actually more likely than others to report at least one mental health symptom. Let’s finally put the stigma to rest and admit that mental health challenges affect us all,” they wrote.
Employee Engagement Statistics that Show the Benefits of Engaged Teams
Research data points to many positive outcomes from highly engaged workforces, including the following highlights:
1. Engaged Teams Do Better on Key Performance Measures
Gallup’s latest employee engagement research found that business units and teams scoring in the top quartile in engagement had the following impressive differences in business outcomes when compared to the lowest quartile group:
- 81% less absenteeism
- 58% less patient safety incidents
- 18% less turnover in otherwise high-turnover organizations
- 43% less turnover in the low-turnover organizations
- 28% less theft reports
- 64% less safety incidents or accidents
- 41% less product defects
- 10% higher customer loyalty/engagement
- 18% higher productivity (sales)
- 23% higher profitability
Further, recent studies have found that when employees are involved in decision making, employees tend to be more innovative and engaged. In the Deloitte 2023 Global Human Capital Trends survey, organizations with higher worker involvement in designing and implementing organizational change were more likely to experience positive outcomes. Specifically, organizational leaders who said they co-create with their workers stated they were 1.8x more likely to have a highly engaged workforce, 2x more likely to be innovative, and 1.6x more likely than their peers to anticipate and respond to change effectively. That’s pretty powerful data.
2. Engaged Teams Are More Motivated, Want to Do Their Best
Employees who report feeling valued by their employer are much more likely to report they are motivated to do their very best for their employees. A survey conducted by the American Psychological Association with 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%). They are also more likely to report they would recommend their workplace to others (85% vs. 19%).
3. Engaged Teams Report Better Overall Healthcare Outcomes
In an article for the Harvard Business Review, researchers Emma Seppala and Kim Cameron reported on the high cost of stress and disengagement in the workforce. “Although there’s an assumption that stress and pressure push employees to perform more, better, and faster, what cutthroat organizations fail to recognize is the hidden costs incurred,” the authors wrote. They reported that healthcare expenditures at high-pressure companies are nearly 50% greater than at other organizations.
Proven Strategies for Improving Employee Engagement Today
While disengagement is a serious concern for many organizations, there is a bright side: there are proven ways to turn things around.
For example, Gallup's 2022 Exceptional Workplace Award winners averaged 70% employee engagement even during highly disruptive times. Among the top reasons cited for these organizations’ success are:
- Embracing flexible and hybrid work
- Maintaining strong connections between employees and managers
- Emphasizing collaboration and employee well-being
- Equipping managers with the skills and tools they need to have meaningful conversations with employees
- Clarifying expectations for employees, so they are not confused about their roles and responsibilities
Jim Harter, Gallup’s Chief Scientist for workplace management, argues that one of the most important things leaders can do to build engagement is to become better communicators. Harter has found that engagement is highest among employees who report consistent communication with their managers. He said employees crave regular contact with their boss, and not just about their daily work. They want bosses to take an interest in their personal lives as well.
In fact, according to Gallup research, 70% of the variance in team engagement is determined solely by the manager.
“To succeed in that responsibility, managers need to be equipped to have ongoing coaching conversations with employees,” Gallup’s researchers report. “Unfortunately, most managers don’t know how to make frequent conversations meaningful, so their actions are more likely to be interpreted as micromanaging without providing the right tools and direction.”
Employee Engagement is About Bringing Motivation Back to Work
One of the best answers for how to engage employees is to simply make work feel motivating. Often, that means connecting employees not only to a sense of purpose but also trying to more directly match employee talents with their work.
In a recent Harvard Business Review piece, Marcus Buckingham, head of people and performance research at the ADP Research Institute, shared insights from companies he’s extensively researched because of their success with engaging employees.
Buckingham said a key driver of success is talking more with employees about what they love to do. He cited one Mayo Clinic study found that if less than 20% of your work involves the things you love to do, you’re far more likely to experience physical and psychological burnout.
Buckingham, who authored the book, Love + Work: How to Find What You Love, Love What You Do, and Do It for the Rest of Your Life, also detailed the example of Lululemon, which encourages employees to set both career and personal goals. He attributed that focus to helping the company achieve 90-day retention and first-year employee engagement scores that are twice as high as industry averages.
Other exemplary programs for engagement that Buckingham admired include:
- Lifelong learning programs, which include direct payment for college degrees
- Student loan reimbursement programs
- Discretionary time to pursue personal projects
- Team-building trips connected to the company’s purpose (such as Patagonia hosting team-building hiking trips)
5 Key Company Strategies Behind Successful Employee Engagement Programs Today
In our work with clients of The Grossman Group, we’ve seen firsthand many examples of winning programs that help drive employee engagement. Here are some highlights of the key strategies that are working for our clients today:
Strategy 1: Getting Teams Connected to the Change
Whenever a company is experiencing massive change (which is the case with most large companies today), employees can often feel disconnected from why there’s so much tumult going on and what it’s designed to achieve, other than simply disrupting their comfortable status quo. Yet when leaders pay attention to helping ensure the internal communications team is part of the process and has a real seat at the table as the change is being discussed, there’s a much better chance of the change going smoothly.
For example, we worked with a large university to shore up its communications team during a time of change. The team then had the support of leadership to develop a plan for a highly successful Town Hall that brought together many more employees than the organization had ever before gathered for one meeting. Simultaneously, the university provided leadership training for top leaders, so they could carry forward the messages from the Town Hall with their teams on a regular basis. As a result, the entire leadership team was sharing a similar message about the direction of the university for the future. By singing from the same songbook, the organization was more unified and directed in its approach to the future.
Strategy 2: Building a Coherent Story During a Merger
Historically, one of the biggest stresses on employee engagement is a major change such as a merger, and these changes are obviously happening much more frequently in today’s business environment.
One of the best ways for leaders to address the pain points employees often feel during such a big time of transition is for leaders of the newly merged companies to have a unified “platform” of messages, a clear story about what the merger is truly about, and what it’s designed to accomplish.
That platform needs to be open about the challenges ahead and speak to the top questions on employees’ minds. Often, a prepared Frequently Asked Questions (FAQ) document, composed with the help of the communications team, can help leaders stay in tune with the top questions employees have.
When leaders of both organizations share a clear and coherent story about the strategy for future success, employees often feel more unified and engaged in the path forward.
Strategy 3: Cultivating Ambassadors
When a big change or new strategy is involved, it’s easy for employees to be naysayers and disengage. Change can be exhausting and it’s easy to simply resist or complain.
Yet when organizations can equip managers or other influential employees with the communication tools and training to share the context behind a change or new initiative, those ambassadors can have a major influence on the culture and help to engage teams more in understanding – and ultimately supporting – the new direction.
Strategy 4: Focusing on Inspired Meetings and Themes
Many employee communication events are bland and routine today. Leaders deliver emails written without much thought for the employee audience and what’s on their minds. The “What’s in it for me?” key question isn’t even considered. Organizations that take the time to truly listen to employees and what’s on their minds often do a much better job at inspiring and engaging them.
For example, we worked with a global healthcare organization to plan a Town Hall like nothing employees had experienced before. While the meeting was online and for an audience of thousands of employees across the globe, months of planning went into its organization. Inspirational keynote speakers were brought in, along with leaders who spoke to how the organization was helping transform the lives of patients around the world. Employees working on successful projects that made real impact on patients were also recognized and details were shared of what’s working and where improvements need to be made.
The result of this organized effort to communicate in a more personal way was immediate. Employees shared that the meeting was one of the most memorable and engaging experiences they ever had with the company. Many employees said they learned new insights about the mission of the organization and its impact on employees and patients. There’s no doubt this careful planning and well-executed communication effort made a major difference in connecting employees with the mission and purpose of the organization they served.
Strategy 5: Embrace Flexibility and Work-Life Balance
According to many research studies, working hours for college-educated professionals have been increasing over the past three decades. This means that many employees are feeling overworked and burned out.
Companies that embrace that reality by giving employees more autonomy and more paid time off clearly help retain those employees and boost overall engagement.
Some companies have even gotten extra creative in the effort to build a genuinely more healthy work-life balance. Employees can be rewarded with extra time off, greater flexibility in where they work, more cash bonuses or equity, and generally more flexible hours to help employees feel more in control of their time.
In a 2021 Harvard Business Review article, researchers pointed to the added benefits of more time off for workers today. “The need to reward employees with time is especially important now because the pandemic increased the length of the average workday (an increase of 48.5 minutes per day according to one study), reducing time for nonwork leisure activities,” the researchers reported.
The Bottom Line
Employee disengagement is undoubtedly a serious concern for employees today, yet there’s an incredible opportunity for all organizations to turn that reality around. It simply comes down to the most important aspect of any organization’s lifeblood – the employees. When more attention is paid to what’s on the minds of those employees, what they need to do their jobs better, and what truly motivates them, companies can take their organizations further ahead than they ever may have imagined.
As you reflect on these employee engagement stats, what do you think is the single best strategy for improving employee engagement?
Get insights that you can use to show your team they genuinely matter. When you do, those employees will be more engaged, producing stronger results for the business. Download your free copy of the eBook – A Persona of Today’s Employee – here.
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