What does employee engagement mean and why does it matter?

Aug 5, 2019 | Good Management

Is- employee engagement’ just another management-speak buzzword – an HR fad that isn’t relevant at the sharp end of running a small business? Or is it something real and valuable that small business owners and managers should consider, understand and invest in?

What is it?

There are various detailed theoretical definitions, developed from concepts around behaviour and motivation. But boiled down to basics,- employee engagement’ is the extent to which your team members feel connected to their work, to the organisation and to what the organisation’s purpose is.

Why does it matter?

At a very high level, if an employee is- engaged’ with your small business, and feels connected to what you are doing, you can see this will impact their motivation. But it goes deeper than that, and can have a fundamental impact on individual performance and organisational performance in many ways, including your bottom line.
Engaged employees feel pride and loyalty towards the business they work in. Customer service levels are higher, staff motivation levels lead to higher productivity and better quality of work.
Good levels of employee engagement also lead to reduced sickness absence, fewer conflicts in the workplace, reductions in the numbers of grievances, and lower employee turnover, retaining knowledge and expertise and reducing how much time and money is spent on recruitment.
The fact that employee engagement can achieve all this means that the amount of management time spent dealing with these various employee problems is significantly reduced, which can only be a good thing for management stress levels and motivation as well.
As well as reducing various negatives, good employee engagement levels also lead to increased levels of innovation in the workplace, which can lead to fundamental changes and improvements in your business.
So it’s partly around the fact that a disengaged workforce brings with it various difficult and expensive challenges, and partly around the positive impact of a highly engaged workforce.

What’s the evidence?

There are plenty of studies which have looked into this issue, including from Government departments, private consultancies and from academic institutions. This body of research clearly indicates that there is a link between employee engagement and the various positive outcomes that business owners might be looking for.
From the point of view of generating a solid business case, there are multiple studies showing that those private sector companies who have higher levels of employee engagement also have stronger financial performance than those who don’t.
It’s clearly sensible for any small business to consider looking into its employee engagement levels, and identifying how to improve them – it’s not just about making everyone happy, it’s about making your business more financially successful as well. If you want some advice on measuring and improving employee engagement in your small business, do get in touch.