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Keeping employees engaged is in the best interest of every small business owner. But often, that’s easier said than done. Figuring out what employees want is vital to keeping them happy. Let’s look at some fascinating employment engagement statistics that can help you improve employee engagement, productivity, and retention.

The Importance of Employee Engagement

It pays to ensure your employees are happy and engaged. Otherwise, you risk the loss of revenue, poor productivity, and bad customer reviews. It can also mean you lose your talent to competition, which is especially hard in the current business climate.

When motivated, employees go the extra mile for your business and help you gain more customers. At a time when employee attrition is on the rise, it is particularly important for you to focus on boosting employee engagement. Here are some employee engagement statistics that prove how a lack of engagement leads to a decline in performance.

The Connection Between Engagement and Performance

1. 69% of employees would perform better if they were more appreciated

Recognizing the efforts of your employees goes a long way in boosting their morale and productivity. And there are some simple things you can try to show them you value their contributions. A note of appreciation and a thoughtful gesture can help you boost employee engagement.

2. Highly engaged business units are 21% more profitable

According to a recent study, businesses with highly engaged employees were more profitable. It’s not difficult to understand why. When employees are happy, they go out of their way to contribute towards company growth.

Data shows engaged employees outperform their colleagues. So from a profitability perspective, it makes sense to keep employees engaged.

Employee Retention and Turnover Rates

3. One-third of employees are leaving jobs because of boredom

Most employees today want a job that excites them and aligns with their expectations and values. An absence of both means employees feel like they are working in a boring company. Most employees would quit their boring jobs and find something more meaningful and fulfilling.

4. Only 12% of employees are leaving jobs for money

When it comes to their job, money is not the biggest reason to look out for another opportunity. Most employees will happily stay in a company with a positive work culture.

For millennials and Gen Zs in particular, other factors play a much bigger role. This is a great insight for small businesses that do not have the budget to retain engaged employees. By focusing on other relevant aspects, they can boost employee engagement.

5. Highly engaged businesses achieve 59% less turnover

And that’s crucial in the current market landscape, where employees quickly leave jobs when they are unhappy. Training and onboarding new employees is challenging for small businesses. That’s why it’s way more profitable to minimize employee turnover.

6. It costs 6 to 9 months’ salary on average to replace an employee

The average cost of losing an employee is thousands of dollars. This doesn’t even cover the time to find the suitable replacement.

Employee Engagement Statistics: Measuring Engagement Levels

7. 87% of employees are less likely to leave a job if they are engaged

So, what’s influencing employee engagement? There’s not just one factor. Employees weigh all aspects of working in a company. What’s the company culture? What’s their role in the company? Who are their co-workers? These are all important factors for employees.

8. 73% of employees are considering to quitting their jobs

Lack of engagement at work is influencing people to start looking outside. The engagement statistics clearly show that productive employees feeling demoralized at work do not want to wait in the wings for things to fall into place. They would rather find another job.

Engaged, Disengaged, and Actively Disengaged Employees

9. 85% of employees are not engaged at work

Shockingly enough, employee disengagement is a prevalent theme across industries. 85% of disengaged employees are either unengaged or actively disengaged. Companies are not looking at employee engagement statistics and creating a solid strategy to boost employee morale.

10. Disengaged employees cost companies up to $500 billion annually

Not surprisingly, therefore, companies are losing a lot of money every year. Demotivated or unengaged employees often stay under the radar and if their concerns are not addressed, they tend to take part in quiet quitting.

11. 50% of employees say they are neither engaged nor disengaged

Actively disengaged employees are bad news for any organization. Such employees are disloyal and disgruntled because most their expectations are not met. In recent years, the number of actively disengaged employees has risen sharply. When companies monitor employee engagement, looking for such employees and finding ways to address their concerns is essential.

Factors Influencing Employee Engagement

12. 35% of millennials value people and culture fit

For most millennial and young employees, good company culture is essential. They look for positive aspects of a healthy work environment that’s good for their mental well-being.

13. 87% of employees expect their employers to help them achieve work life balance

A growing number of employees today understand the importance of drawing a line between their job and personal life. So options such as work from home and flexible work hours have come to be expected from employers.

14. Only 29% of employees are happy with career development opportunities

For many employees, not finding a clear career path is a challenge. This is particularly true for those working in flat organizations.

15. 56% of employees value personalized and streamlined professional improvement systems

Engaged employees know where their careers are headed in the same organization. And that’s a key factor that keeps them motivated. As an employer, you should consider creating more opportunities for growth to retain talent.

Best Practices for Fostering Highly Engaged Employees

Creating a solid company culture that focuses on employee engagement as part of its business strategy is not as difficult as it may sound. A growing number of businesses are devising new policies that can improve employee satisfaction. Let’s look at some of the best practices to boost employee engagement rates.

Effective Communication and Collaboration

16. 39% of employees think people in their organization do not collaborate enough

Collaboration and teamwork play a crucial part in creating the right company culture. An absence of collaborative teamwork can lead to employees feeling disengaged from the rest of the company.

17. 33% of employees say a lack of open communication has the most negative impact on employee morale

When employees don’t get the information they need or find it difficult to voice their opinions, they start losing confidence in the company. Lack of communication between employees and their bosses is another aspect that needs to be addressed. When managers communicate openly, it makes things easier for the employees.

18. Effective communication boosts team productivity by 20-25%

Interestingly employee engagement statistics show effective communication is not only great for lifting an employee’s performance, but also in improving the overall team’s productivity. That’s because when a team communicates often and clearly, it achieves faster results and gains solutions to problems.

Employee Recognition and Feedback

19. 37% of employees say recognition is the most important factor in their work engagement

Every employee wants to feel valued. So recognizing and appreciating their work is crucial to building employee morale. Recognition can take many different forms. For example, you may assign more important tasks to the employees who continuously outperform to prove their competence.

20. 85% of employees feel they’re more motivated when management updates them regularly

Creating a truly open work environment necessitates clear communication. And that involves breaking down silos and answering questions. The whole idea is to make the employees feel comfortable when they have questions for the higher ups.

Challenges in Boosting Employee Engagement

Of course, boosting employee engagement is no walk in the park, especially in post-pandemic work where everyone prefers flexible work opportunities. On top of that, businesses today must adapt themselves to meet the expectations of a diverse workforce that has different set of priorities. Let’s explore in more detail.

Generational Differences in Employee Engagement

21. 80% of millennials think it’s okay to quit a new job if it’s not what they expected

Sticking to a bad job just because it’s new doesn’t resonate with most millennial employees. They would rather quit and find another job that meets their expectations.

22. Gen Z employees place having fun (72%) over making money (56%)

The key to engaging these young employees is creating an open and happy workplace that focuses on mental wellbeing. To attract Gen Z employees, creating an informal workplace where things are more easygoing is important. Doing away with strict rules about collaboration, for example, can be a great idea.

23. 76% of Gen X employees say they are most productive during traditional office hours

Contrast this with millennials and Gen Z employees who see flexible work hours as the most efficient way to boost productivity. For an organization focused on employee retention, it’s not always easy to find the middle ground that works for everyone. If engagement statistics are to go by, organizations need to listen to every employee and create a more holistic work environment that meets everyone’s expectations.

Remote Work and Employee Engagement

24. 70% of employees say it’s often difficult to contribute to a conversation through video calls

This is especially true when you have team meetings and connectivity is not that great. Moreover, in large meetings many employees may not feel comfortable sharing their opinions. Reaching out to such employees and ensuring they feel comfortable is important.

25. 64% of managers say they don’t have the appropriate tools to manage remote workers

From managers’ perspective, remote work has made monitoring employees and their engagement at work more challenging.

26. 49% of remote workers feel invisible to leadership

Another challenge of managing remote workers is networking and gaining visibility in the organization. This is becoming even more challenging as companies start adopting the hybrid model. Remote employees who are never in office will find it difficult to gain visibility, which may impact their ability to find future job opportunities in the organization.

The Future of Employee Engagement

With the world rapidly evolving, employee engagement too is going through its own share of changes. And that’s a good thing. Businesses and employees cannot expect processes and company cultures to stay the same when employees and their realities are shifting. Let’s look at some of the potential trends that will have an impact on employee engagement in the future.

Emerging Employee Engagement Trends

27. 89% of employees working in companies with wellness programs are engaged and happy

With the majority of employees being positive about wellness programs in their companies, more employees are likely to introduce these programs to encourage work life balance.

28. 76% of millennials and 69% of Gen Z employees expect flexibility in working options

For most employees today, flexibility equals work life balance. It is in fact, one of the key factors that determines where they work. So, more companies will have to find a way to provide flexibility to their employees.

29. 74% of employees expect remote work to become the standard

During the pandemic, employees and businesses saw that working remotely is not a crazy idea to maintain productivity. Given that the cost of living is continuing to rise, more employees would want to work remotely to manage expenses.

30. Collaboration technologies enable businesses to increase productivity by up to 400%

Cloud technology had already made it possible to work remotely from anywhere in the world. Since remote work seems like it’s here to stay, cloud adoption will only increase. This is useful for human resources professionals, in particular, as they continue to support a number of remote employees.

The Role of Innovation in Employee Engagement

31. 80% of employees feel learning a new skill would make them more engaged at work

Considering professional growth is a key priority for employees, a number of online tools and innovative platforms have emerged in the market. Take e-learning for example. Many companies are getting employees enrolled in programs that can help them progress in their careers. Through these innovative tools, businesses will continue improving employee engagement.

32. When employees are given the right tools and resources to work from home, engagement doubles

Many businesses are offering work from home packages to employees to help them work smoothly. Some are also reimbursing workers for internet so they can work easily from their own homes.

FAQ: Employee Engagement Statistics

Why is employee engagement important for businesses?

According to stats, employee engagement boosts productivity by 14%, customer ratings by 10% and sales by 18%.

At a time when businesses are trying to recover from the pandemic, losing valuable employees is not an option. This is particularly true because replacing them takes a lot of time and costs money.

What factors influence employee engagement levels?

Some of the key factors that influence employee engagement levels include job satisfaction level, company culture, work environment and career development opportunities. Data suggests 37% of employees prioritize recognition as a key factor determining their engagement level.

What are the best practices for fostering highly engaged employees?

To increase the number of engaged employees, employers must first review their corporate culture. A key factor behind employee disengagement is the feeling of not being heard. In highly engaged business units, transparency, open discussions and collaboration are greatly valued.

What challenges do organizations face in boosting employee engagement?

Typically, organizations find it difficult to balance their act while catering to the expectations of various employees at different levels and age groups. For example, what works for a millennial may not work too well for a Gen X employee. Another challenge is the rapidly changing work environment. To improve employee retention, organizations must adapt.

What is the future of employee engagement and its potential impact on the workplace?

In the future, employee engagement will continue to focus on maintaining work life balance. Thanks to new technology, working remotely will become even more easier. But this will also present some new challenges as you work toward building a successful small business team. The question is are companies truly ready to embrace the flexible work model? In many cases, this is pretty straightforward. In other industries, this may require a mindset shift.

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