Employee engagement has been all over the HR radar for the past several years, turning the measurement of engagement into a multi-million dollar industry. But what exactly is employee engagement? Why is building engagement so important? How can engaging employees improve your business?
Defining Employee Engagement
Engaged employees share a strong desire to be part of the value that an organization creates. These employees feel a strong emotional bond to the organization that employs them and choose to exert discretionary effort to provide better outcomes for the customer and the organization. Engaged employees are committed to improving and have a desire to own and improve their personal engagement.
At Avatar Solutions, we believe there are three levels of employee engagement: Actively Engaged, Ambivalent, and Actively Disengaged. Actively Engaged employees always go above and beyond in the work they do and are highly committed to the mission, vision, and values of the organization. Ambivalent employees tend to work just as hard as they need to get by, and are not likely to volunteer for extra assignments or have strong spirit or enthusiasm. Actively Disengaged employees bring a negative energy to the workplace, do not focus on creating positive outcomes, and can be a drain on their organization. According to Avatar Solutions’ National Normative Database, comprised of 3.3 million employees from 2,400 organizations, only 29 percent of employees are Actively Engaged, while 59 percent fall into the Ambivalent category and 12 percent can be categorized as Actively Disengaged.
Engagement’s Impact on Customer Satisfaction
Employee engagement has a significant impact on customer satisfaction. Engaged employees are motivated by an environment that always focuses on creating a positive customer experience, and are 3.5 times more likely to believe employees at their organization genuinely care about the customer. In fact, there is a correlation between customer satisfaction and employee engagement to the .85 coefficient. This correlation does not suggest causation, but instead shows that as employee engagement improves, customer satisfaction tends to improve as well, and vice versa.
Employee Engagement and Quality of Work
Engaged employees also tend to work harder and produce higher quality work than disengaged employees. Avatar Solutions’ research has found that engagement is also positively correlated with performance ratings, meaning that engaged employees tend to receive a higher performance rating. These high performing employees make up the backbone of any organization they work for.
Improve Employee Retention through Engagement
Turnover is a huge drain on employers and the economy, with the U.S. Bureau of Labor Statistics reporting that 1.5 to 2 million employees voluntarily chose to leave their jobs each month. Each employee who resigns tends to cost between 16 to 20 percent of his or her annual salary to replace. By focusing on engagement, organizations are much more likely to retain their top employees and therefore save money. Engaged employees are 3.5 times more likely to stay with their employer and are four times more satisfied with their jobs.
Building Engagement in Your Organization
Now that we know how important building employee engagement is, how can you build it at your organization? We will be launching a new blog series on how to increase employee engagement. Check back soon for tips, best practices, and a focus on the individual key drivers of engagement.
 Lucas, Suzanne. “How much does it cost companies to replace employees?” http://www.cbsnews.com/8301-505125_162-57552899/how-much-does-it-cost-companies-to-lose-employees/ (accessed April 11, 2013).