5 Reasons Why Employee Engagement is Important to Management

by Daniel Hannig

Employee engagement is a theme that makes the rounds of every conversation regarding talent development, productivity and company culture. But what makes it so important to managers? What are the benefits of an engaged workforce in the eyes of management?

Want to learn more about this topic? Download our Employee Engagement ebook Download PDF

Before we dive into a more detailed answer, let me first ask you these five questions:

  1. Do you struggle with bringing innovative solutions into your organization? 2. Does employee turnover affect your team’s workflow? 3. Do your 1:1s with team members revolve around topics such as low productivity and lack of motivation? 4. Do you care about your own development as a leader? 5. Do you feel your own motivation has gotten stale?

If you answered “Yes” to any or all of these questions, then you should already know that there’s something in it for you to care about employee engagement.

It’s important because: More engagement leads to innovation

Innovation as a competitive advantage is not a new idea. It has been well documented and tested in all fields since Josef Schumpeter’s breakthrough research back in the 1940s. However, to keep innovating ahead of the competition is a daily challenge for any organization in this fast-paced global economy. It’s no easy task, but it’s one that leaders are expected to face everyday.

You do not have to face it alone though.

If you believe new ideas can come from anyone, it’s the engaged employees who will likely put their brainpower to come up with them in the first place. There are numerous studies showing the direct correlation between employee engagement and organizational innovation. The engaged employee, a.k.a the Builder Employee, feels a stronger sense of ownership which in turn translates into performing tasks beyond their duties. It is also known through said studies that Builder Employees think of their work more creatively, which is another booster for innovation.

Managers leading such engaged individuals have a much higher likelihood of bringing about successful innovations than one who is employing a disengaged staff and tries to innovate on his own.

It’s important because: Engaged employees have no reason to leave

Employee turnover is expensive. For the manager, there is the time spent finding, recruiting and onboarding a new person until he or she is at peak performance, among other costs. For the team, it may affect their own engagement and workflow.

Some studies have suggested an estimation of up to 213% of that employee’s yearly salary. Even if the exact figure varies for each organization, we know the costs of losing a skilled talent are high. And while there may be several ways to reduce turnover, taking initiatives to increase employee engagement can be a very effective method to address the issue.

Think about it for a moment. Engaged employees show a higher level of commitment and ownership to their jobs and are more satisfied with their work environment. Why would they leave then?

As a manager, the benefits of an increasingly engaged team also extends to other less motivated teammates, as a lower turnover tends to boost their morale as well. It might even reduce hiring costs, as engaged employees are more likely to recommend their friends to apply for positions in your company.

It’s important because: An engaged employee is a more productive one

It is in every manager’s best interests to keep their team performing their tasks and delivering their projects timely and with high quality. A disengaged staff tends to take 30% more sick days, suffer more accidents at work and be less productive in general.

How much is that lower productivity costing you? Well, one study comparing Earnings per Share (EPS) among 49 companies identified that those which displayed higher employee engagement outperformed the others with 147% higher EPS. They have also exhibited a faster recovery during times of financial turmoil.

Another, perhaps more pernicious, way disengaged employees may affect you as a manager is they require more management to perform – which in turn translates into more of your time being spent away from strategic matters. Engaged employees are self-managers.

It’s important because: It pushes you to become a better leader

In order to cultivate motivated employees managers are expected to create the right environment and establish a range of good leadership practices. Indeed, a study shows the attitude and actions of the immediate team lead can enhance employee engagement or create an atmosphere where they become disengaged.

These good practices involve, for example, communicating clear expectations for their work. You want to be able to give people clear objectives they can work towards. Another important factor is ensuring the team has access to the right resources to perform well. A good leader should do everything in his/her power to facilitate the team’s work by sharing with them the information they need and giving them access to the proper tools to do their jobs.

To engage an employee it’s also necessary to give them timely feedback about their work but also be open to receiving feedback and taking it to heart. We could go on but you should understand by now that good leadership is a key driver to employee engagement and have some indicators on what to work on.

Above all else, however, it has been found that caring managers are one key element for employee engagement. These are leaders that see people not as assets to be managed but as individuals who can bring value by themselves. They build strong relationships with their teams and lead in a “person-centered” way, fostering an environment in which employees can perform at their peak.

It’s important because: Learning how to engage others will help you become more engaged

If you are struggling to be highly motivated yourself, then learning about how to develop it in others might help you get out of that zone.

Although on this post we discussed the reasons why Employee Engagement is important to management and a little bit about the manager’s role in developing it, motivation is highly intrinsic.

That being said, by tuning into your own intrinsic motivation, identifying what are your key drivers and why you do what you do; it not only becomes easier for you to relate to others and help them find those things in themselves, but you will set yourself on a path to be more engaged.

Employee Engagement is a big topic not only for HR but for the entire organization. For managers, as we could see, there are direct implications on your bottom line. And lastly, when people are engaged it benefits everyone, including themselves.


Budgeting for Employee Engagement

Do you find budgeting for employee engagement challenging? Well, you are not alone. As an HR professional, you regularly need to evaluate where your company’s HR spending has generated the most success, and where you can afford to save. While many human resource experts have preached the importance of creating a workplace environment where employees are motivated, fulfilled, and healthy, one question always lingers: Where do we find the money?

Read more

20 Ideas for Rethinking Employee Performance Reviews

The employee performance review is a rite of passage at every job. It’s an accepted convention that once a year, you will meet with your boss one-on-one to discuss the quality of your work in the past year. Your strengths and weaknesses will be covered and your salary may be renegotiated. But is this the best way to inform employees of their progress? Can one annual conversation really do the job?

Read more

Employee Engagement Begins with your Company’s Core Values

In any community, shared values are what bring people together. They let members know what’s right, what’s wrong, and what outcomes people should prioritize over others. Shared values keep people moving toward the same goal. In a way, they are the foundation of any relationship–I trust that you will behave in this way because we both believe behaving that way isn’t right. It’s true too for workplaces. While codified corporate values might seem a little cheesy now (remember the “flair” in Office Space?

Read more