HR & New Work

10 min read

Team during brainstorming
Team during brainstorming

A comprehensive guide to employee engagement for your company's success

Your comprehensive overview of employee engagement: benefits, measures, solutions and examples. And how it impacts your bottom line.

A quick look at Gallup’s State of the Global Workplace Report reveals some alarming statistics. Nearly six in ten employees globally are ‘quiet quitting’, and more than 50% of workers are actively looking for a new role. That picture is particularly bleak in the UK, with nearly 90% of UK employees reportedly disengaged from their jobs. At the same time, other research shows that engaged employees contribute to increased productivity, loyalty and, ultimately, company profitability. 

So, it's clear that employee engagement, or employee motivation, is critical not only to employee well-being, but also to a company's financial success. But what exactly does "engagement" mean in this context? What factors influence it, and how can companies effectively promote it? 

In this article, we’ll get to the bottom of these questions, supported by relevant statistics and research that shed light on the topic from various angles. You’ll soon find out why it’s really worth paying special attention to this topic.

Definition: What is employee engagement?

Employee engagement describes an employee's emotional and intellectual commitment to their company. It's not only about employees performing their daily tasks but also about building a deeper bond with their work and their employer. 

Engaged employees are motivated, proactively contribute, and go above and beyond what is expected to ensure the company's success. High levels of employee engagement are valuable to companies because they often correlate with lower staff turnover rates, higher employee satisfaction, and improved business results.

Why is this topic so important? The benefits of employee engagement

Every day at Flip, we see the positive impact of investing in employee engagement. Our customers tell us how their work environments flourish, how communication among colleagues is more rounded, how feedback cultures are strengthened, and how employees actively contribute suggestions and initiatives that often lead to lucrative improvements.

Market research institutes and employee engagement experts back up these positive individual reports with solid facts and figures. Here is an overview of the proven benefits of engaged employees:

  1. Less burnout: According to a study by the Yale Center for Emotional Intelligence, engaged employees are less at risk of burnout overall. Work-related stress and burnout are currently costing the UK economy £28bn a year, resulting in an average of 23.3m sick days per year. This hinders those affected not only in their jobs but also in their private lives. 
  2. Happy personal life: A study by Kansas State University found that engaged employees are happier in their personal lives. A fulfilling work environment positively influences family life and overall well-being.
  3. Better career opportunities: Committed employees have better chances of promotion and career opportunities. 
  4. Fewer days absent: The Gallup polling institute found that engaged employees have 81% fewer days absent. This saves companies considerable costs and ensures smooth operations.
  5. Higher productivity: According to the same Gallup study, engaged employees are 17% more productive. Not only do they perform better, but they also contribute to more efficient processes by suggesting improvements.
  6. Increased profitability: Companies with high employee engagement have up to three times higher profit margins compared to companies with low engagement. They also have 21% higher profitability.
  7. Simplified recruiting: Engaged employees are less likely to leave the company. They also contribute to recruiting by recommending qualified candidates. According to the Corporate Leadership Council, 30-50% of all positions are filled through employee referrals, which is not only more cost-efficient but also more effective because these new employees tend to stay with the company longer.

In short, when employees enjoy their work, are motivated and identify with the company, everyone benefits: colleagues, managers, and the employees themselves.

→ More about the benefits of employee engagement

→ Find more interesting statistics on employee engagement here

How can employee engagement be increased?

Given these benefits, the next question is obvious. What drives employee engagement? Is it money, flexibility, recognition, or something else entirely? The truth, as is so often the case, is multi-faceted. 

While well-intentioned individual measures such as fitness programmes, team events, and table football can certainly increase engagement, they are often ineffective without a holistic strategy in the background. This involves both understanding the baseline situation and planning measures that cover various engagement factors. Instead of selective improvements, you must create a holistic approach to create more motivated and happier employees in the long term. 

Next, we’ll explain exactly how you develop this long-term approach with an employee engagement strategy for success.

6 engagement factors to increase employee engagement

Different strokes for different folks. What motivates and excites one person about their work, another may not even notice. And because companies need to cater to more than just one person, planned engagement measures should address the following six engagement factors so there's something for everyone:

The six factors in employee engagement
  1. Meaning and significance: Employees seek companies that act responsibly and communicate values. Millennials, in particular — soon to be the largest segment of the working population — feel disillusioned with employers and are quitting faster than previous generations, according to a Deloitte study. If your company has a deeper purpose than maximising profits, it will positively affect employee engagement.
  2. Autonomy: Encourage the autonomy of your employees. This includes involvement in decision-making processes and the ability to set priorities and shape their own workflow. The more autonomy and control employees have, the higher their commitment.
  3. Competence: Use the individual talents and competencies of your employees. People are more motivated when they feel competent and can express their skills at work. You can support this through targeted training and task allocation.
  4. Well-being and appreciation: Recognition and appreciation are essential. This includes regular feedback, praise, development opportunities, and building positive relationships within the team. Studies show that recognition is often more important than financial incentives.
  5. General conditions: A good work-life balance and an appropriate workload are crucial for engagement. Employees who can organise their work flexibly and perceive their workload as fair are significantly more committed.
  6. Compensation: Fair compensation is actually less of a commitment factor than a basic requirement. However, it’s not only important that employees can support themselves with their wages. Salary can also serve as a sign of appreciation. Compensation should be perceived as fair in relation to the work performed and in comparison to colleagues.

→ More on this topic: Increase employee engagement with 6 principles

Possible measures to increase employee engagement

Famous thought leaders like David Zinger and organisations like Gallup and Cisco have developed models for employee engagement measures based on years of research. They can provide a framework for planning initiatives tailored to your unique situation, your company, and your employees.

In general, the key to increasing engagement is implementing measures in different categories and involving employees in the process. Therefore, the following ideas are not a checklist, but should serve simply as inspiration:

Measures for corporate vision and meaningful work

  • Design open spaces for employees to work on "Passion Projects" that support both their individual interests and the company mission.
  • Initiate open dialogues through regular "Ask me anything" sessions with members of the company's leadership.
  • Create opportunities for teams to directly experience how their work makes a positive difference by sharing success stories and customer feedback.
  • Encourage employees to share their personal success stories where their contributions have made a lasting difference in the organisation.

Measures to promote employee autonomy

  • Involve employees in decisions that affect their work and the company. This can include brainstorming sessions, surveys, or regular team meetings.
  • Train your leaders to delegate tasks and reward employee initiative or proactivity. 
  • Provide your employees with the necessary resources, including technology, information and support from colleagues or supervisors. If you don't know what resources your employees want, start with a survey.

Measures to promote competencies and career opportunities

  • Promote individual career paths through a job development programme with clearly defined career paths.
  • Combine experienced workers with less experienced employees through a tailored mentoring system.
  • Create a resource system that enables team leaders to define and pursue individual training goals together with their teams.

Measures for appreciation and well-being

  • Create a cross-team council to plan and implement inspiring team-building activities.
  • Incorporate a buddy system to foster cross-cultural and cross-team networking and integration.
  • Develop an in-house networking platform where employees can share their thoughts, exchange ideas and make professional connections.
  • Enable a safe space for feedback through regular, one-on-one conversations between managers and team members over lunch.

Measures for better framework conditions 

  • Implement a programme promoting (mental) health, for example, by facilitating and (co-)financing access to health services. 
  • Implement programmes around part-time leadership or job sharing so that employees can manage their own work-life balance more flexibly.

Measures for fair compensation 

  • Depending on the corporate culture, it can make sense to disclose salaries. This way, employees know that the same work is also remunerated in the same way. 
  • Reward outstanding performance financially, for example, in the form of bonus payments. 
  • Adjust salaries for long periods of service so that new employees are not at an extreme disadvantage compared to long-term employees.

→ For more ideas, see our article 31 Measures for better employee engagement

Are there any successful practical examples for promoting employee engagement?

Can you think of companies that you immediately associate with particularly motivated and loyal employees? Perhaps Apple, Tesla or Patagonia? These three examples alone show that a wide variety of business models can rally an enormously engaged workforce behind them if you implement a few key measures particularly well. 

The following companies are taking especially innovative approaches to inspiring their workforce and increasing their engagement.

Patagonia: Environmental protection and social responsibility

The outdoor clothing company is known for its commitment to creating a better world for tomorrow. Patagonia actively supports its employees in living these values by, for example, granting paid leave to environmental activists among its employees to participate in protests or actions. 

The company also offers an outstanding childcare programme and ensures that its products are manufactured ethically and sustainably. Such measures ensure high employee retention and satisfaction, as employees know they are working for a company that shares their values and provides them with opportunities to actively advocate for their beliefs.

Apple Retail: A unique corporate culture

Apple is known not only for its innovative products, but also for its strong corporate culture. The company's retail division invests heavily in training its employees and offers them above-average salaries and stock options. 

But what really sets Apple apart is the clear mission and culture that is instilled in every employee. By creating an environment where employees see themselves as part of something bigger, Apple fosters not only engagement, but also loyalty.

EUROPART: Direct feedback without intermediaries (Flip customer)
EUROPART, one of the leading partners for commercial vehicle workshops and trade, has identified the involvement of employees in decision-making as a key to success. 

With the introduction of the Flip employee app, the company was able to build a direct communication bridge between the grassroots and management levels. The tool gives employees the opportunity to share their ideas and suggestions in a straightforward manner. Their impressive result — with 98% of suggestions implemented — illustrates how valuable it is for a company to listen to its employees and respond to their suggestions.

toom Baumarkt: Mobilised internal communication (Flip customer)

In today's digitised world, toom Baumarkt has recognised the value of a centralised communication platform and created "toomunity", an internal app for all employees. 

But this app goes beyond pure communication. It provides employees with target group-specific information and enables them to provide feedback in real-time. In combination with flexible working models and training opportunities, toom has created an environment where employees feel valued and informed.

REWE Group: Involving all employees — whether at their desk or on the floor (Flip customer).

As one of the largest grocery retailers in Germany, REWE Group has recognised the value of work-life balance and employee satisfaction. Through flexible work models, fair compensation, and health offers, REWE shows that they take the well-being of their employees seriously. 

With the employee app, the company goes one step further and offers a platform where all employees can share their opinions and receive feedback via their smartphones. The message to all employees is clear: REWE values the voice of each individual and is ready to respond to the needs of its employees.

→ Employee engagement in retail: Here's how well-known brands go about it

What are the solutions and tools for employee engagement?

Employee engagement solutions are tools, platforms, and strategies that help companies measure, analyse, and improve engagement.

Some common forms of employee engagement solutions are:

  • Feedback tools and surveys: These include regular employee surveys, pulse surveys, and other tools that capture feedback in real-time.
  • Communication tools: Modern intranet solutions, employee apps, or other communication platforms allow employees to connect with management and share ideas with each other — even outside of work (e.g., there may be special interest groups, event planners, or community forums).
  • Recognition and reward programmes: Platforms that allow managers and colleagues to recognise and reward the work and successes of employees.
  • Learning and development tools: E-learning platforms, webinars, or workshops can promote engagement through ongoing education and professional development.
  • Health and wellness programmes: Solutions that focus on employees' physical, mental and emotional well-being, such as fitness programmes, mentoring, or stress management courses.
  • Gamification tools: By integrating gaming mechanics into work tasks, these tools can increase employee motivation and engagement.
  • Analytics and reporting tools: These solutions measure and analyse employee engagement, identify optimisation potential, and enable companies to make data-driven decisions. Often, corresponding functionalities are integrated into internal communication tools.

Conclusion on the topic of employee engagement

Employee engagement is essential for all companies. Engaged employees experience less burnout, have higher life satisfaction, fewer absences, and are more productive. Companies with high employee engagement even achieve up to three times higher profit margins. While individual measures such as team events can increase engagement in the short term, a holistic strategy leads to more sustainable results. Factors such as meaningfulness of work, autonomy, competence, and appreciation should be taken into account.

Communication is a critical element in employee engagement. Open communication promotes employees' identification with their employer and facilitates a continuous exchange of corporate goals and changes. Practical examples such as EUROPART and REWE Group show the success of tools that support this direct digital communication. 

In short, to reap the benefits of employee engagement, companies cannot just implement selective measures, but must pursue a long-term, communicative, and holistic strategy.

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