Why Is Employee Engagement Important?

May 11 2023
5 min read
Why Is Employee Engagement Important?

When employee engagement issues start getting talked about on mainstream TV, you know there’s something serious going on. The pandemic was only the beginning of the great engagement challenge, as a massive round of voluntary separations turned into widespread layoffs. What’s happening here, and what can you do about it?

Even Dr. Phil Talks About Employee Engagement

We’ve all heard about Act Your Wage TikTok videos. They were one of the many indicators that showed how engagement issues like the Great Resignation were making headlines. Dr. Phil also discussed Quiet Quitting during one of his shows. And, if you think that these problems are so 2022, think again. The voluntary separation rate might be down, but is still higher than it was in 2002, which was the last time it approached this level. 

At the same time, all the big names are laying off workers. Google, Microsoft, and Amazon recently fired 6%, 5%, and 3% of their employees respectively. But how is that an engagement problem? When employees sense an upcoming round of layoffs, their feelings about job security evaporate, and they start to look for new work, just in case. This causes them to be more distracted–and of course, less engaged in their work. Plus, it’s often the top performers who can find new jobs the fastest, so during a period of layoffs, some of the most valuable employees are suddenly gone.   

The 3 Levels of Engagement, and What They Mean for Productivity

According to Gallup, 32% of employees are engaged, 51% are disengaged, and 17% are actively disengaged. Each type of worker has a different effect on the organization. Obviously, an engaged employee is important because their behavior is extremely beneficial to a company. However, the flip side of this argument is that a lack of engagement is also a critical factor, but in negative ways, as we explain below. 

Engaged Employees

These are the workers who have an emotional connection to their job, coworkers, and organization. Every engagement program aims at producing as many of these kinds of employees as possible due to their many organizational benefits:


Companies with engaged employees outperform those with poor engagement rates by more than 200%. You can expect these types of employees to be eager to do their job well and ready to take instructions from managers.    


Organizations that build employee engagement to prevent turnover can see more than a 40% rise in retention rates among their most engaged people. This provides many advantages to a company, like holding on to valuable skills and organizational knowledge.


The sense of being connected to a job gives people a sense of purpose. Plus, they are often aware that not everyone feels as they do about work. For reasons like these, enthusiastic employees sometimes make their feelings about work public as about 1/3rd of them are voluntary advocates for their companies on social media.  


Nothing pleases a manager more than an employee who acts independently but still effectively. An engaged worker takes responsibility, and the effect on stakeholders can be significant. For example, engaged workers who are involved in client service inspire a 10% increase in customer loyalty.  

Disengaged Employees

When you hear about “quiet quitting,” this is who we are talking about. They tend to believe that hard work won’t pay off for them. A disengaged employee has a perfunctory attitude towards their job, and won’t, for example, read work-related emails once they leave the office for the day. On the other hand, they want to avoid being fired, so they do the absolute minimum to keep their job.  

Even though they perform a function, disengaged employees have a real cost effect on a business, estimated at 18% of their annual salary. They also exert many negative pressures on the company:

  • Managers need to scramble and find other people to be responsible for the tasks that they refuse to do 
  • Because they are not dependable, disengaged employees force managers to plan around them in case, for example, they don’t show up for work during an important project 
  • Engaged employees grumble about always needing to take over from them; in the long run, this might translate to increased salary demands from engaged employees

Actively Disengaged Employees

According to Gallup, actively disengaged employees “are resentful that their needs aren’t being met.” This is a step down from the lack of interest of disengaged employees. For instance, actively disengaged workers might:

  • Act critically and disrespectfully
  • Sabotage projects
  • Show generally antisocial behavior in the workplace

Actively disengaged employees are a universal problem, and they also have a global cost in terms of lost productivity, estimated at $7.8 trillion per year. Another factor is that they don’t tend to last long, and this adds employee replacement costs to the list of disadvantages. Finally, actively disengaged employees damage the performance of more dedicated workers through their attitude and absences. 

Stem the Disengagement Tide with Growthspace 

Learning and development programs are almost a cure-all. They boost employee engagement and retention while empowering the organization with the latest skills. But effective L&D means more than cracking open a textbook.

For skills training to really work, it needs to be highly personalized. Chances are that there are as many professional goals in your company as there are employees. Growthspace lets HR/L&D managers deliver customized training to employees of all types and in any size of organization. What’s more is that the Growthspace platform makes running such a complex program simple and seamless. Take your learning to the next level with Growthspace.

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