Employee Engagement: A Quick Guide for Leaders

Did you know that 70% of the variance in the level of engagement from one employee to the next can be attributed to who their direct leader is? While many believe employee engagement is an HR issue, leaders play a significant role in influencing and improving employee engagement.

Based on decades of research, it has been repeatedly proven that engaged employees produce better results for their teams and the companies they work for. So, if you want any chance at achieving your mandate, you must have a team of engaged employees.

That’s why we’ve dedicated this article to leaders, those who lead teams in functional areas outside of human resources, to help them better understand employee engagement and the influence they have on it. You’ll learn what employee engagement is, why it’s important, and ways leaders can improve it.

Jump to:

• What is Employee Engagement?
• Why is Employee Engagement Important?
• How to Improve Employee Engagement?

What is Employee Engagement?

Employee engagement is the level of employee commitment toward their work and the organization they work for. When engagement is high,  employees have a deep sense of connection, dedication, and motivation to contribute their best efforts.

How engaged employees are can be seen and felt in the workplace in how they interact with each other and customers, the words they use to describe their work life, their willingness to take ownership of tasks, and contribute ideas and solutions. Simply, it is the difference between going the extra mile or just putting in the time and only doing what’s required.

Why is Employee Engagement Important?

The level of engagement of employees influences almost every metric directly or indirectly across an organization. For leaders, achieving your goals will be nearly impossible if your team members lack engagement. From motivation to productivity and performance, engagement is critical to a team’s success and business metrics.

The impact of employee engagement can be found across key performance indicators, as was discovered when one study compared employee engagement levels across teams against key business metrics. They found that the top engaged teams vs. the bottom engaged teams had:

• 81% decrease in absenteeism
• 18% decrease in turnover for high-turnover companies
• 43% decrease in turnover for low-turnover companies
• 28% decrease in theft
• 64% decrease in safety incidents
• 41% decrease in quality defects
• 10% increase in customer loyalty
• 18% increase in sales
• 23% increase in profitability

Supporting the impact engagement has on business metrics, a recent 2023 study found a correlation between a company’s stock price and whether their employees were in the top or bottom 10% for engagement. Evaluating more than 3 million employees at 226 large global companies traded on the U.S. stock market, they uncovered that companies with high employee engagement performed twice as well as their peer organizations with low engagement. Adding even more importance for an engaged workforce, those companies with the highest levels of engagement outperformed the S&P 500 at the end of the year.

While there may be initiatives that your organization is pursuing to bolster employee engagement, that doesn’t mean leaders are off the hook. As one article said, “The greatest cause of a workplace engagement program's failure is this: Employee engagement is widely considered ‘an HR thing.’ It is not owned by leaders, expected of managers, nor understood by front-line employees.”

Direct leaders have a critical role in influencing engagement, so If you’re looking to boost your team’s commitment, start by actioning these five engagement tips for leaders.

1. Focus on Yourself First
2. Continually Reinforce the "Why"
3. Provide Development
4. Recognize Achievements
5. Create a Safe and Positive Team Environment

Focus on Yourself First

As noted earlier, 70% of the variance in employee engagement can be attributed to their direct leaders. Learning the skills to be a good leader, where you feel prepared to lead your team and provide the support they need, builds their confidence and trust in you as their leader. Attending a leadership training program will equip you with the knowledge to be an effective leader while also learning the pitfalls to avoid that may inadvertently cause employees to become disengaged.

Continually Reinforce the “Why”

Employees want to feel that their time at work has a purpose and that they’re contributing to something larger than themselves. They want their work to be meaningful and align with the company’s values and purpose, and when there is this connection, employee engagement increases.

However, it can be challenging for employees to see how their actions contribute to that purpose when they're thick in the day-to-day operations. Direct leaders have the unique opportunity to continually communicate and reinforce why the team does what it does by helping employees see the direct correlation of their efforts to the company’s purpose, vision, and goal achievement.

Provide Development 

Employees want the leader they work for to take an interest in their career and help them develop. Having career conversations, providing continuous coaching and feedback, and creating personal development plans are all activities leaders can and should do to help bolster their team’s engagement. Employees want their leaders to take an active interest in them and their careers, as it was uncovered that employees are 2x more likely to be disengaged if their direct leader ignores them.

Conversely, taking an interest in each employee and providing coaching and feedback to help them develop and grow, it was found that 80% of employees agreed that opportunities to learn at work would make them more engaged.

Recognize Achievements

Recognition and engagement go hand in hand. A simple thank you, or Slack shoutout can go a long way in acknowledging an employee’s efforts and accomplishments and boosting engagement. This was shown when HubSpot found that 69% of employees agreed they’d work harder if they were better appreciated at work, and 78% agreed that recognition motivated them in their jobs.

Create a Safe and Positive Team Environment

Your team’s culture, that is, the way they think, act, and interact with each other, can significantly impact their engagement. A recent survey by The Muse uncovered that employees who describe their work environment as “disrespectful, non-inclusive, unethical or cutthroat” were less likely to be engaged with work and more likely to leave the job. Moreover, when this negative environment is present, these employees blame their leaders and direct managers first and foremost.

It’s up to leaders to create a positive team culture where employees feel safe to share their ideas, feelings, and feedback without ridicule and have a sense of belonging and inclusion. Doing so creates a team environment where employees enjoy their work and the people they work with and are willing to go the extra mile as they want to see their team succeed.