Employee engagement has stalled – and that’s a problem

Highly engaged employees are happier, more productive, and stay in their jobs for longer. But after a decade of progress, COVID-19 has seen engagement levels plateau.

To get the ball rolling once again, employers need to understand who their employees are, and how to keep them engaged. Doing so successfully benefits everyone involved.

Understanding ‘employee engagement’

It’s a challenging time for business. The worst of the pandemic may be over, but its impacts remain in the shape of a stagnant economy and tightening labour market.

For employers, maintaining an effective recruitment and retention strategy has never been more vital. In this context, ‘employee engagement’ is increasingly relevant.

According to the Gallup organisation, the concept of employee engagement can be described as an employee’s ‘involvement and enthusiasm’ (opens a new window) for their work and workplace.

Highly engaged employees are those who hold favourable opinions of their work. They may demonstrate passion for their profession, and feel a personal resonance with their workplace and its culture. This in turn will enable them to go above and beyond in their work.

At the other end of the scale, disengaged employees hold a negative opinion of their work. Their lack of engagement may manifest in a lack of commitment to their role, or an unwillingness to fulfil their responsibilities.

Low engagement hurts employers

But if the description of a highly engaged employee sounds like a fantasy, it is ­– at least for most people.

According to Gallup, just 21% of employees globally are engaged in the workplace (opens a new window). Although this figure has risen over the last decade, progress has stalled since the onset of COVID-19, having peaked at 22% in 2019.

The flatlining in global employee engagement levels has a significant, and detrimental impact on the global economy. Employees who are not engaged or actively disengaged from work have been estimated to cost the global economy US$7.8 trillion (opens a new window) – equivalent to 11% of GDP globally.

For individual companies, the consequences are equally significant. Another study by Gallup, conducted in 2020, explored the correlation between engagement at work and 11 organisational outcomes (opens a new window), including customer loyalty, profitability, productivity, turnover, safety incidents, and absenteeism. It found a substantial correlation across all outcomes.

Among the findings were a 23% increase in productivity for companies with high engagement, compared to those with low engagement. Meanwhile, high engagement saw absenteeism drop by 81%, and workplace accidents fall by 66%.

With engagement levels stalling, more and more employers can expect to see their performance across these outcomes decline.

Improving engagement levels

Low engagement is a problem, but it isn’t without remedy. Employers hoping to engage these employees must deliver a working experience that is tailored to those employees’ needs – either in relation to the work an employee undertakes directly, or to the broader characteristics of the workplace.

Increasingly, this means a multi-generational workforce, soon dominated by millennials and so-called ‘Gen Z (opens a new window)’. Unlike their predecessors, these cohorts are more heavily affected by the cost-of-living crisis, and are making flexibility and remote work an increasing priority.

They also place greater emphasis on ethical and environmental considerations. Pay remains important, but will be weighed against other factors, such as how well a company aligns with their individual values.

Despite these trends, it’s also important to bear in mind that each workplace is different. To gain a true understanding of how best to engage their employees, employers must first be confident in knowing who their employees are.

To achieve this, employers may want to invest in measures to capture employee data more effectively (opens a new window). Once successful, this can be leveraged to shape and deliver a targeted range of initiatives designed to maximise employee engagement.

Actions to drive engagement may include:

  • Giving employees clear and achievable goals as part of their daily work, providing encouragement and visualising progress

  • Offering mentoring or peer-to-peer learning opportunities

  • Encouraging continuous learning and other forms of personal development, including those outside of the workplace

  • Ensuring employees receive praise and recognition for demonstrating good work and commitment, such as ‘employee of the month’ or similar programmes

  • Facilitating flexible working where possible, including providing employees with necessary tools and equipment to effectively carry out remote work

  • Organising events and activities at team- and company-wide levels to develop bonds and build rapport within the workplace

  • Encouraging leaders to establish meaningful connections with employees, such as by taking an interest in their lives, listening to their opinions, and balancing professionalism with friendliness

  • Demonstrating a strong understanding of mental wellbeing, including providing employees with appropriate forums for discussing issues, and sharing emotions and vulnerabilities

  • Being committed to equality, diversity, and inclusion, including fair pay

  • Ensuring opportunities for internal career progression exist and are accessible to all employees

For further information, please contact:

Lucie Gosling-Myers, Client Development Manager, Lockton People Solutions

T: +44 7721 327 427

E: lucie.gosling-myers@lockton.com (opens a new window)