Getting Employee Engagement Right or Wrong: The Pros & Cons

According to Gallup, companies with engaged workforces outperform others by as much as 202%. It is statistics like these that have HR teams scrambling for the next best thing to improve engagement scores.

The belief is that engaged teams cause sales to skyrocket, productivity to peak, sick days to cease and the work-life dynamic to be more balanced. While these benefits might be exaggerative, they are not too far from the truth.

Employee engagement is about giving the team a shared sense of identity within the company and a route to achieving individual career aspirations. When these metrics are met and contributing to successful company performance, the benefits can be staggering. However, when a company fails, safety, absenteeism, and more are on the line.

Let’s look at how your company is impacted by the success of your employee engagement level.

The Pros of Getting Employee Engagement Right

Pro 1: Surging Profitability

The swing in profitability is possibly the most shocking engagement affected statistic. For workplaces with low productivity and poor management causing low engagement levels, an estimated $960 billion – $1.2 trillion of potential profits are lost each year. With 70% of engagement variances attributed to team leadership, taking a look inwards is of utmost importance. 

The average profitability discrepancy stands between 21 and 22% for those at either end of the engagement scale. Such high levels of profitability can be the difference between survival and closure in most volatile economies.

Pro 2: Increased Sales

Sales are enhanced by engagement through a number of different avenues. Firstly, and perhaps least of all, engaged teams are far more likely to recommend their workplace as a potential provider of products and services. Pride in their roles makes employees brand ambassadors within their networks. 

Secondly, your sales team improves. Outside of the fast-paced arena (even though engagement is still important here), sales staff are significant benefactors of a positively engaged working culture. External facing roles are the connection between employer and customer and in sales scenarios, the interests of both are at stake. A disengaged employee can be indifferent to outcomes but team members who enjoy full engagement do what they can to create a positive experience for the customer. Naturally, the enjoyable experience has a domino effect with sales, word of mouth, and transparent review sites.  

Pro 3: Supercharged Productivity

As exemplified by the previous benefits, positively engaged employees result in increased sales, profits, and improved overall productivity in the role. A Harvard study found employees are up to 21% more productive under healthy engagement structures. This is typically due to the self-identification of individuals with the success of the role. 

Proactive problem solving, eagerness to impress, and extended willingness to achieve concentrate the efforts of engaged associates. Engaged employees are also much more likely to stay late and work overtime to guarantee success. 

Pro 4: Improving Talent Acquisition

Digitized economies have fostered immense amounts of transparency in all walks of life. In the workplace, it can be suggested that hedge fund manager, Ray D’Alio, provided the origins. His concept of radical transparency has permeated employee culture in the quest for full and open honesty. This has led to platforms such as LinkedIn, Yelp and Glassdoor to give departing employees a voice on what it is like to work for previous employers. 

When engagement has been positive and genuine care is shown for the individual, it can be displayed openly on employer review sites. Former employees, free from influence, championing their previous company makes them a more attractive option for prospective talent.

The more engaged your people are, the more appealing you are as a company. Positive word of mouth reviews engage the applicant pool and inevitably lead to better new hires.

Pro 5: Enhanced Innovation

The monotony of getting up and going to work at a job you have little care for leaves scant invitation for creative spark and inspiration. Where employees feel detached from the success of their employer, they are rarely looking for opportunities to improve systems. Disengaged employees simply see themselves as a cog in the machine rather than a valued contributor. 

Where a team member sees themselves as a trusted part of a potential success story, they will go the extra mile and looks for ways to improve processes. Of course, innovation also means creating new product lines and services but most innovation actually occurs internally. Problem-solving, process improvements, system overhauls, and new employee practices are much more likely with an employee treating company and personal success as one

The Cons of Getting Employee Engagement Wrong


Gallup has found that only 51% of employees feel engaged with the remainder indifferent or disenfranchised. If you feel your team is less than engaged, change is certainly worth considering.

Con 1: Escalating Staff Turnover & Damaging Loyalty

In January 2020, the Bureau of Labor Statistics found the average employee tenure to be 4.1 years meaning a replacement for each role is required at least twice every ten years. 

Onboarding statistics suggest that replacing mid-range employees costs 20% of their salary in lost productivity, HR salary, and training. This means that the average company is looking at $24,000 of hiring fees per mid-level employee every decade. Unfortunately, this is the case for companies with a high employee churn rate (yearly staff turnover) as it takes an average of 42 days to replace employees.

Financially, loyalty is vital and nothing increases longevity quite like engagement. Employees that see themselves as part of the purpose are dissuaded from jumping ship. This leads to a 59% reduction in employee turnover drastically reducing onboarding costs. 

Con 2: Inflated Absenteeism

Could you take a guess at the cost of absenteeism to the US economy? $250+ billion 😱

Employees take an average of 5.2 sick days equating to $3600 each year but what about when those sick days hold up operations for others? The domino effect is considerable. However, Gallup has noted that absenteeism reduces by up to 41% in companies with high levels of engagement. This can be calculated at 2 extra work days of productivity per person you employ.

Now, we are not suggesting that absenteeism simply evaporates when employees are happier and more fulfilled at work. Far from it; but consider the main causes for skipping work. Stress, bullying and harassment, job hunting, mental health and disengagement rank high with physical illness and injury. By accepting the limitations of poor employee engagement, you develop the conditions for increased absenteeism. 

Con 3: Rising Safety and Workplace Incidents

Of all the impacts of employee engagement, health and safety rarely spring to mind first. However, the gap between the top and bottom quartile in the number of workplaces is enormous. In a survey of 1.8 million people in 230 companies, Gallup found the top 25% of engaged workforces had 70% fewer accidents than the bottom. 

Even in hospitals, poor engagement in nursing teams was the best predictor of mortality rates due to medical errors. Engagement topped the list ahead of low staff numbers and technological mishaps. That is to say, nurses who are no longer enthusiastic and inspired by their work are at fault for a higher percentage of accidental deaths than any other factor.

The emotional and purposeful commitment extends to consistently being present and switched on in your place of work. When the team is fully engaged, oversights, mistakes and erroneous behaviors are vastly reduced. If your company or healthcare facility encounters challenges with safety records, have you considered engagement rates to be a contributing factor? When was the last time you surveyed your team to truly understand the issues?

Conclusion

Employee engagement is the trending topic of human resource management right now. There are times when it is not always the optimal strategy to get the most out of your team but when it works best, there is a lot to be gained. 

Engagement empowers leadership to impact the workforce on a much more human level. By caring more on an interpersonal level sales, productivity, hiring, innovation, and retention improvements will usually follow. 

Let us know what benefits you’ve seen from your employee engagement efforts or even the drawbacks you have experienced from low levels of engagement!