5 Ways Employee Engagement Gives You a Competitive Edge

Overuse has pushed the term “employee engagement” into the realm buzzwords – a vast, empty expanse of concepts that are devoid of any real meaning. Consequently, business owners and entrepreneurs are starting to turn a blind eye to something that has concrete benefits. Employee engagement tangibly improves business success.

Diverse team stacking hands in unity over a table with laptops, showcasing teamwork.

Engagement means that employees not only feel an emotional connection to their work and employer. They also derive a sense fulfillment and well-being from their job duties. This causes employees to demonstrate:

  • A connection with an organization’s long-term goals and how their job fits into the bigger
  • A personal commitment to the company and its mission
  • Better relationships with colleagues
  • An active investment in continual skills development and staying on top of industry changes

While making employees happier at work is fundamentally valuable to any organization, this is not the only benefit of employee engagement. One Harvard Business Review study found that 70 percent of business owners think employee engagement drives organizational success. Specifically, it’s clear that engaging employees delivers distinct competitive advantages in at least five critical ways.

1. Increased Productivity

When employees feel actively engaged, stress levels plummet, enabling them to focus and accomplish more. This contributes to higher energy levels and productivity. When work is rewarding, it motivates employees on a deeper level to improve output and improve success rates. Some of the ways you can help foster engagement include:

  • Providing challenging and fulfilling work
  • Exhibiting workplace fairness
  • Offering training and advancement opportunities
  • Sharing decision and outcome responsibilities

2. Greater Customer Satisfaction

Employee engagement also enhances customer loyalty. In turn, this leads to more repeat purchases and positive word-of-mouth-marketing. Customers of one department store reported they felt much higher customer satisfaction when engaged employees assisted them.

3. Safer Work Environment

Studies suggest that engaged employees have far fewer safety incidents and violations. Consequently, organizations benefit from less lost time, more consistent attendance, and fewer injury costs. Safer companies have higher productivity since there are less operation disruptions, leading to higher profitability.

4. Less Turnover

One Fortune 100 company cut employee turnover rate from 14.5 percent to about 4 percent due to higher employee engagement. It also cute absenteeism in half.  High turnover and absenteeism both drive up labor costs and results in less productivity. Meanwhile, longer tenures and decreased absenteeism help maintain operational momentum.

Engaged workers aren’t looking to jump ship like disengaged employees are. As with any other good investment, the returns grow over time and the value of the investment increases. This also holds true with human capital investments.

Higher company loyalty also provides deeper institutional memory and greater employee investment in the company’s success.

5. Higher Profits

High employee engagement vastly improves profit margins. Higher productivity, lower costs and greater customer satisfaction all contribute to an inherently healthier bottom line, giving you the ultimate edge over competitors who don’t value employee engagement.


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