Why it pays off to invest in employee engagement

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Companies and organizations are constantly striving to gain various competitive advantages. Many focus on reducing costs, increasing productivity, or implementing new technologies, but one of the most important competitive advantages is: employee engagement. To invest in employee engagement is not just about various ‘feel-good’ initiatives; it is about investing in activities that provide tangible benefits for both employee engagement and business results. In this blog post, we will explore why it pays off to invest in employee engagement and the returns on these investments.

Engaged employees are more productive and deliver higher value to the organization

Engaged employees are more productive and work harder to achieve organizational goals. When employees are engaged in their work, they are also more motivated to perform at their best. According to a Gallup study, teams with high employee engagement experience a 21% increase in productivity compared to disengaged teams. Engaged employees are also more likely to contribute innovative ideas, take ownership of their work, and collaborate effectively with colleagues. By investing in employee engagement, organizations can unlock significant potential for increased productivity and efficiency.

Engaged employees are more likely to stay and grow in their workplace, leading to reduced turnover

High employee turnover can be costly for companies in terms of recruitment, training, and lost productivity. Disengaged employees are more likely to seek opportunities elsewhere, leading to increased turnover. On the other hand, organizations that prioritize and invest in employee engagement can significantly reduce turnover and retain those they want to keep. According to a study by the Corporate Leadership Council, engaged employees are 87% less likely to leave their organizations than disengaged colleagues. By investing in employee engagement, organizations can reduce turnover and its associated costs.

Engaged employees result in more satisfied customers

The link between employee engagement and customer satisfaction is undeniable. Engaged employees are more likely to provide outstanding customer service and build positive relationships with customers. A study by the Temkin Group revealed that companies with highly engaged employees outperformed their competitors by an average of 20% in terms of customer experience ratings. Engaged employees are knowledgeable and attentive. They take personal ownership to ensure customer satisfaction and are willing to go the extra mile. They believe in what they sell. In short, they create outstanding customer experiences. They generate a “Wow!” factor that makes customers buy more, spend more, and come back for more. By investing in employee engagement, organizations not only improve internal productivity but also have a direct impact on the customer experience, leading to increased customer satisfaction and, of course, improved business results.

Engaged employees contribute innovative ideas and creative thinking

Innovation is a crucial driver of success in today’s rapidly changing world. Engaged employees are more likely to contribute innovative ideas and think creatively to solve challenges. By investing in initiatives that increase employee engagement, organizations are investing in a culture that fosters innovation and creativity, thus gaining a competitive advantage within their industry.

Investing in employee engagement helps create a positive organizational culture that attracts top talent

Investing in employee engagement helps create a positive organizational culture that attracts top talent and promotes employee well-being. A strong culture built on trust, open communication, and a shared sense of purpose cultivates an inclusive work environment where employees truly thrive. Engaged employees are more likely to align with the company’s values, leading to higher employee engagement, better teamwork, and increased motivation among employees. Additionally, a positive organizational culture acts as a magnet for attracting the best talent. Job seekers increasingly prioritize companies with a strong and supportive culture that genuinely invests in employee engagement.

Engaged employees sound like incredible individuals. Who wouldn’t want more of them? But here’s the catch: Engagement is not something that solely resides within the individual; rather, it is an experience created by organizations, managers, and team members.

Employee engagement is not something that naturally occurs. Every organization engages some employees, but most organizations struggle to engage the majority of them.

Engagement cannot be achieved through financial incentives alone. Higher pay may be the “easy way” to attract, retain, and motivate employees, but it doesn’t create intrinsic motivation and is not a long-term engagement solution. Moreover, your competitors can raise their salaries at any time and lure away employees who are solely motivated by compensation.

To invest in employee engagement (link in Swedish) is a strategic decision that yields measurable effects for both employees and organizations. Improved productivity, reduced turnover, enhanced customer satisfaction, increased innovation, and a positive organizational culture are just a few of the benefits that come with investing in employee engagement.


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