What Is Employee Engagement and Why Does It Matter?

Are your employees engaged with your communications?

Do employees care about their work? Do they enjoy working with their colleagues? Are they committed to moving an organization forward? A metric like employee engagement can help answer these questions.

What is employee engagement?

Gallup defines employee engagement as “the involvement and enthusiasm of employees in their work and the workplace.” According to Gallup’s 2024 data, employee engagement fell to its lowest in a decade, with only 31% of employees engaged.

Although employee engagement is complex (many factors determine whether or not an employee enjoys their job), at the most fundamental level, employee engagement measures an employee’s desire to do their work. It’s a litmus test of their enthusiasm.

What is employee disengagement?

If an employee isn’t engaged, they might be “disengaged” (not engaged) or “actively disengaged.” Disengaged employees are not mentally attached to or passionate about their work or employer. A step beyond disengagement is active disengagement. While disengaged employees may not contribute positively to an organization, they don’t actively work to hurt the organization. That’s where actively disengaged employees differ. These employees are unhappy, and they act out their unhappiness. They might even undermine their coworkers and bring down morale.

What is an employee engagement rate?

Does an employee find their work meaningful? Do they enjoy collaborating with their colleagues? Are they committed to the organization? An employee engagement rate is a quantitative measure that can help translate these subjective answers into a concrete metric. An employee engagement rate can help organizations make data-driven decisions to improve their workplace.

A wide range of factors determine employee engagement rates. The most common way of measuring employee engagement is to conduct a survey to assess different aspects of the employee experience. On a Likert scale, employees rate their agreement with statements like, “I have opportunities to develop professionally” and “I am recognized for my work.” Using those ratings, an organization can calculate individual engagement scores and determine the organization’s average employee engagement score (EES).

How does PoliteMail calculate communications engagement?

Engaging employees requires communication and motivation. Whether in-person or through email, engagement with communications leads to engagement with the business. PoliteMail’s Engagement Rate measures employee engagement with internal email communications. The PoliteMail engagement formula considers the amount of content sent relative to the time spent reading a message, also factoring in whether or not an action item is completed (e.g., the recipient clicks a hyperlink).

This zoomed-in level of engagement is a valuable measure of employee involvement in company communications and one of the three primary KPIs for internal comms. Employees who consistently read internal comms are more engaged than those who just occasionally skim them.

How does employee engagement relate to retention?

Employee retention refers to an organization’s ability to keep or retain its employees. What is the tenure of your employees? In January 2024, according to the Bureau of Labor Statistics, the median number of years that wage and salary workers had been with their current employer was 3.9, a national measure of employee retention.

Ultimately, employee engagement influences retention. Understandably, if employees care about their work responsibilities and enjoy working at a company, they’ll do what they can to stay with that employer. Conversely, if an employee is actively disengaged, they are more likely to search for another job.

Research repeatedly finds that employee engagement is a leading indicator of employee retention. A recent Paylocity study, based on a survey of 8500 anonymized workers, found that when employees strongly agreed with the statement “My work is challenging, stimulating, and rewarding,” 73% stayed for 5 years or more. However, employees who strongly disagreed only had a 39% chance of being retained. Considering the costs of hiring, onboarding, and training employees, this 34% increase adds up to a very meaningful number.

Why is employee engagement important?

Employee engagement is important because it impacts many business outcomes–everything from retention to innovation to customer satisfaction to financial performance. It’s a wide-reaching metric that touches every aspect of a business. It’s not an exaggeration to say that a company’s employee engagement score determines its success.