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  • Writer's pictureBeacon Business Advisors

What is Employee Engagement and Why Is It Important?

Updated: Dec 20, 2023

A low cost, high return approach to improving productivity, profitability and customer satisfaction.

Whether you're a small business owner or a business manager, today you are likely focused on topics such as Employee Retention/Turnover, Absenteeism, Productivity rates and of course, Profitability.  When you add inflation and its impact on your customers purchasing power and your own businesses cost of products and services the current outlook can be discouraging.  The tools you have employed throughout the years such as investing to grow your business or cutting costs to stand still but protect it continue to be available.  However, each of these come at a cost.  Investing to grow requires additional capital investment and cutting costs to protect your business often leads to zero growth, lower customer satisfaction and higher employee turnover.  

Where can you look for low cost and effective initiatives and approaches that may provide measurable improvements? Employee Engagement.  Often overlooked by small business owners and managers, Employee Engagement can be an incredible value generator and dramatically improve all aspects of your business.  Businesses with engaged employees have:

  • Higher retention rates 

  • Lower absenteeism 

  • Better work quality

  • Report fewer safety issues 

  • Higher productivity

  • Higher rates of customer loyalty  

As a workforce becomes more engaged and satisfied, your business may experience higher sales and overall profitability.  A recent Gallup study concluded that a highly engaged workforce leads to 20% higher sales, and 21% higher profitability. (Gallup "State of the Global Workplace" 2022)

So what is “Employee Engagement”?  Employee Engagement is about more than happy employees.  Employee engagement is the level of enthusiasm and commitment a worker feels toward their job.  Engaged employees feel valued, care deeply about their work, are loyal and are dedicated to the success of the Company.  High levels of engagement leads to improved retention rates, higher productivity and better business outcomes/performance. (Survey Monkey)

Employee Engagement is not Employee Satisfaction.  Employee Satisfaction may include:

  • Pay

  • Workload

  • Resources

  • Office Perks

How can a small business owner or manager get a solid feel for Employee Engagement levels?  Survey your employees.  To start, you will find out a great deal about your Employee engagement levels by surveying your employees about factors such as:

  • Understanding of their current job responsibilities

  • Relationship with Supervisors

  • How they perceive current company leadership

  • Perception of opportunities for career advancement

  • Feelings about current work conditions

  • Psychological and emotional commitment to work

  • Amount of effort above the minimum requirement they are willing to commit to their work

  • Feelings of pride in the company

  • Willingness to recommend the company to friends and family

Engaged employees are invested in your businesses’ success, value, and goals.  They are employees whose feedback has been listened to and valued.  Salesforce found that employees who feel their voice is heard within an organization are 4.6x more likely to feel empowered to perform their best work.  The net result is improved employee well being and increased productivity! (SalesForce Research Survey 2019)

The first survey can then be followed by “regular checkup” surveys done monthly or quarterly.  These would be 5 - 10 questions focused on current employee objectives.  They can also be used to regularly evaluate changes made to improve engagement while providing ideas for new initiatives.  They build company culture and offer employees an opportunity to contribute and interact with the company as they work toward common goals.  They positively impact employee well being.

Additional surveys that are extremely useful for the Company and that increase Employee Engagement are Employee Experience surveys:

  • Recruitment surveys - how did the Company perform with your recruitment, follow up? application, etc.

  • Onboarding surveys - how did the Company perform?  Was all set on your first day?  How do we perform for new hires?

  • Training surveys - evaluate the effectiveness of training programs.  Example - How relevant is training to your role (Extremely relevant, Very, Somewhat, Not so, Not at all)?

  • Employee engagement survey - identify areas for improvement for Company.  Example - How inspired are you to meet your goals at work (Very, Inspired, Neutral, Somewhat, Not at all)? (Survey Monkey)

Employee Engagement is important to your company.  It can benefit your entire organization from employees, to managers and ownership.  It can bring improved customer service, productivity, employee retention and overall business profitability.  Your business will be easier to manage and the workplace will be a healthier and more enjoyable place for your employees.


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