chapter 1

employee engagement — and why it matters

What is employee engagement, exactly? How is it measured — and why does it matter?

 

If you've ever had these questions yourself, you've come to the right place for answers.

 

In this comprehensive ebook, we'll walk you through the complete ecosystem of employee engagement. By the end, you'll understand how to spot nascent employee engagement problems (before they're disrupting business outcomes), how to measure employee engagement (and frame it in terms of bottom-line impact) plus what benchmarks to look for (as you're about making improvements). 

 

Along the way, of course, we'll delve into a number of related concepts, illustrating them with specific, real-world examples wherever possible. And in the final chapter, we'll empower you with actionable next steps so that you can put all of your new knowledge into practice. 

 

Your employee engagement journey begins right now.

 

what you'll learn:

CheckList_Yellowhow to spot employee engagement problems


CheckList_Yellowhow to measure employee engagement


CheckList_Yellowkey benchmarks to meet as you improve

chapter 2

signs you have an employee engagement problem

Employee engagement has two distinct meanings: In the first, employee engagement refers to a holistic measure of the level of emotional investment employees feel toward day-to-day work and their employers. In the second, it refers to the set of policies and practices organizations implement to create a workplace culture where employees are invested and passionate about their work.

 

That sounds straightforward enough. But how can you tell if your engagement strategies are actually working — or, in any case, how well they're working? Here are four telltale signs that more needs to be done. 

 

communication keeps breaking down 

Fluid back-and-forth communication is the lifeblood of most successful organizations. So if dialogue between team members suddenly tapers off, or conversation begins to seem like a one-way street, it may be an early warning sign that employees are disengaging. 

 

If you see this happening at your organization, you'll need to pin down the root cause. Has there been a change in priorities, assignments or team leaders? How well are day-to-day objectives aligned with the bigger-picture business strategy and vision? Do employees feel that their input is heard and valued by other stakeholders?

 

When communication among team members appears to be dropping off, it's imperative for managers to intervene as early as possible, because the issue isn't going to fix itself — and conditions will likely worsen rapidly if left unchecked.  

 

lack of communication can be costly:
the average annual losses for businesses where communication practices were poor was $62.4M.

 

productivity or quality are in decline

Having the right metrics in place is the only way you can get a read on the overall health of your business. So when teams suddenly start coming up short on KPIs or SLAs — and then come up short again and again — it's a safe bet something must be wrong. But what, exactly?

 

Any recent changes to the way your business operates are a likely culprit. It's easy for new managers, for instance, to cause inadvertent and unforeseen changes in the way that direct reports experience work on a day-to-day basis. Alternately, the change in productivity or quality could reflect interpersonal issues among staff or a dissatisfaction with recent changes to your workspace, both of which you and your HR partner could address. Whatever the case may be, it's critical to take steps to get out ahead of issues like these, which very often correlate with declining employee engagement.

 

rocket engagment starts at the top:
teams with highly engaged managers were found to be 59% more likely to be engaged themselves.

employees are shirking work

We all manage to sleep through the alarm clock once in a while, or get backed up by traffic or have to leave early from work for an appointment. It happens. But disengaged employees are far more likely to make a habit of shirking work — and, by paying close attention to when employees are clocking in and clocking out, you'll be able to effectively anticipate and address problems with engagement.

 

This patten of behavior can also spill over to sick days and PTO. If you're seeing declining productivity or quality of work with a specific employee, and that employee is also running up sicks days and PTO, it's a good idea to check in as soon as possible.

 

rocket monitor absences closely to identify employees who are in danger of disengaging.

turnover is climbing

Does it seem like employees are running for the exits in droves? Are top performers leaving for greener pastures? Do your new hires only last a few months? If so, you've clearly got an underlying engagement problem — of which your retention problem is a symptom.

 

Indeed, employee engagement and retention frequently go hand in hand. But there's at least one easy way you can start plugging the hole: Conduct exit interviews with all departing employees. That way, you can pinpoint exactly why people are leaving your organization and start to implement changes to get out ahead of the issue. 

 

rocket don’t let turnover spiral out of control:
the average cost for replacing an employee is 21% of their annual salary.

key takeaways

Now that you know some of the most common signs that employees are less-than-fully engaged, you should begin to have some sense of whether or not this is a problem. And to make that assessment easier for you, in chapter four we'll be providing you with key engagement benchmarks — that way, you can see, objectively, how you stack up. 

 

But first, though, let's look at how employee engagement connects to ROI. This information, which frames engagement in terms of bottom-line outcomes, should help you make the business case for proactively addressing engagement internally.

chapter 3

connecting employee engagement to ROI

In business, ideas — even seemingly great ones — seldom get off the ground unless they can demonstrate ROI. We'll walk you through some of the ways that employee engagement can be connected to the bottom line. 

 

engagement directly impacts revenue   

We all know that highly engaged workforces are more pleasant places to be — and we take it on principle that they're also more productive, more collaborative and so on. But what's the bottom-line equivalent of all that? Or to put it another way, how can we quantify engagement in terms of business impact?

 

improving employee engagement improves business:

59percent_chart 20percent_chart 17percent_chart
59% less
turnover
20% more
sales
17% more productivity

Directly, it turns out. Indeed, research shows that businesses with high levels of employee engagement have 59 percent less turnover, 20 percent more sales and 17 percent more productivity than counterparts with less well-engaged workforces. And that difference amounts to a significant competitive edge. 

 

engagement in the context of organizational growth 

We've seen that engagement has demonstrated impact on bottom-line metrics like sales and productivity, but what about year-over-year organizational growth? 

 

One study segmented companies into two buckets — those with high employee engagement, and those with less employee engagement — then tracked year-over-year fluctuations in their share prices on the stock market.

 

The results? Companies with highly engaged workforces saw 7.3 percent greater year-over-year share price growth versus companies with less engaged workforces. It also tentatively suggests that engagement levels don't just correlate with overall business performance, but might even be used to forecast or predict it. 

 

In other words, if you have a largely disengaged workforce right now, the forecast for next quarter's earnings might be gloomy. 

 

businesses with highly engaged teams enjoyed 7.3% year-over-year share price growth versus companies where engagement was low. 

 

engagement and turnover

When employee engagement and turnover get out of hand, a viscous cycle sometimes sets in, with disengagement driving turnover and turnover reciprocally driving disengagement. That's a frightful tailspin you can't afford.

 

The good news is that by getting ahead of engagement today, you'll likely be able to reduce turnover in turn. For example, one study found that organizations that ranked in the bottom quarter for engagement scores suffered 41 percent higher levels of turnover.

 

It's another reason why you need to proactively address whatever employee engagement your company is facing today. 

 

employee turnover graphic businesses with the lowest levels of employee engagement suffered 41% more turnover.

key takeaways

Drawing a line between something as squishy — or seemingly subjective — as employees' relative engagement levels and tangible business outcomes might seem tricky, considering all of the factors involved. But it's an essential step if you're going to effectively make the business case for addressing engagement with stakeholders internally. 

 

Hopefully, with these learnings fresh in your mind, you feel confident about how to frame employee engagement as a challenge facing your organization — and can explain to other stakeholders how and why a different approach will pay dividends over the short- and long-run.  

 

In chapter four, we're going to wade even deeper into the numbers, zeroing in on some key benchmarks around employee engagement. These should help you not only get a read on the state of engagement at your company today, but also prioritize when it comes time to make improvements. 

chapter 4

benchmarks

In this chapter, we'll dive into some of the metrics and numbers that are directly associated with employee engagement. These benchmarks, which draw on Randstad's deep domain expertise and diverse experience with clients across industries, are designed to give you insights into the state of employee engagement at your company today. 

 

active engagement 

This is the most obvious place to start. According to the latest Gallup annual engagement survey, the percentage of U.S. employees who are actively engaged increased in the past year. The number now stands at 34 percent, which is the highest it has been since Gallup began reporting on engagement in 2000.

 

At the same time, if only slightly more than a third of all employees are engaged, is that really cause for celebration? Perhaps more troubling still is the fact that 16.5 percent of all employees are classified as "actively disengaged." Meanwhile, the majority of workers (53%) remain simply "not engaged," according to Gallup.

 

Engagement and retention are intimately linked, so whenever one becomes an issue, the other is likely in the mix as well. But whatever approach you're currently taking to measure engagement at your organization, if more than a third of your employees don't qualify as "actively engaged," you're skating on very thin ice. 

 

a majority of employees are not engaged at work:
not engaged employees graphactively disengaged employees graph

 

don't overlook physical factors

How else can we quantify engagement — for example, are there other measurable factors that contribute to highly engaged (or disengaged) workforces?

 

Technology is one such factor, of course. But you also shouldn't overlook the importance of physical infrastructure like well-designed office space and comfortable seating to employee engagement and satisfaction. These things matter a great deal. 

 

How much? Consider the following results of a recent Randstad survey that asked employees to identify the factors influencing their on-the-job satisfaction. 

factors of job satisfaction graph

Poll your workforce to see how well you're living up to employee expectations on each one of these items. If you find you're falling short on any one of these benchmarks, it's time to step up your game. 

 

having a voice

Do employees at your company feel comfortable expressing their ideas and opinions? If not, team members are likely less than optimally engaged. After all, employees who actively engage in conversation are more likely to be engaged — period. 

 

This is a surprisingly persistent problem at many companies today. According to Randstad's research, just over half (57%) of employees feel confident expressing opinions during meetings. Conversely, more than 40 percent of workers lack the confidence to speak their minds. 

 

You can use a simple, anonymous survey or poll to understand the state of worker self-confidence at your organization today. Hopefully, the number you'll come back with is somewhere north of 57 percent. And in the event that workers don't feel confident about speaking up, consider introducing new policies. For example, requiring input from all participants in a meeting before the meeting can conclude might help address that. 

 

microphone illustration over 40% of workers say they don’t feel confident expressing their opinions in meetings.

examine your workplace culture

No less directly than office furniture, day-to-day workplace culture, too, touches the way that employees feel about your company. As such, it's a critical lever when it comes to engagement. 

 

Unfortunately, if you take a high-level view of workplace culture at companies around the U.S., the picture it paints isn't exactly rosy. For example, only 23 percent of employees agree or strongly agree that they are satisfied with the culture of their workplaces, according to a large-scale study

 

What's the percentage at your own company? If less than one in four employees are satisfied with your existing workplace culture — ouch. This should be a focus area for improvement. 

 

work on your workplace:
only 23% of employees agreed that they’re satisfied with the culture of their workplaces.

 

key takeaways 

Keep these benchmarks top of mind as you assess the maturity of your existing employee engagement strategies. Beyond calling attention to potential areas for improvement, these benchmarks should also serve as yardsticks by which you can measure and track progress going forward. 

 

But at the end of the day, finding the right approach to employee engagement amounts to an ongoing journey, with no permanent or final destination. However, because this is such a critical metric, even minor improvements can translate to substantial gains for businesses. 

 

If you're ready to pull all that you've learned so far together and put it into practice, sail ahead to chapter five — the final chapter in this ebook — where we'll show you how to do exactly that. 

chapter 5

next steps

At this point, you should have a fairly well-developed understanding of employee engagement — from pain points to bottom-line impact, benchmarks and more. Now it's time to take action. 

 

As you read through these next steps, keep in mind that they're only suggested starting places — ad hoc fixes that can help you move the needle on engagement. However, if the engagement problem at your company is systemic, you'll need to take a more systemic approach. 

 

evolve the way you measure performance

Employee expectations around internal performance review processes are rapidly changing. And for any company struggling to improve employee engagement, that's a really good thing.

 

Why? Employees want the entire process to become more fluid. Instead of stuffy annual sit-downs, think ongoing daily interaction characterized by constant feedback. This change, in turn, will eventually render the old promotion model, characterized by relatively few promotions and rigidly structured timelines, obsolete.

 

Of course, holistically adopting such an approach at your company is going to require a good deal of investment in terms of time and energy. You'll need to get all stakeholders aligned, for starters. And you'll probably need to roll out some form of training for managers and direct reports alike.

 

But the upshot is that by doing so you should not only be able to keep employees more engaged, but gain keen insights into where, when and why engagement issues are arising at your organization. And that, in turn, should fuel further improvement. 

 

sidestep annual performance review sit-downs and switch to a constant feedback model based on ongoing daily interactions.

 

reconsider working arrangements 

There are many misconceptions about world of work today, and one of them is that young professionals will be reluctant to work for employers that don't allow for flexible working arrangements. In fact, Randstad's research suggests more or less the exact opposite: A full 65 percent of employees between the age of 18 and 24 say that they prefer working in traditional office environments.

 

So don't assume that every millennial and Gen Z member of your team prefers digital interactions to personal ones. That's a mistake that could easily drive disengagement.

 

And while it's a good idea to give your employees some flexibility around working arrangements — and to allow them to work remotely part of the time — you might also consider mandating that all employees work from the office a certain number of days each week. Randstad's research, indeed, indicates that there might be distinct benefits to be gained by doing so, like greater collaboration, increased productivity and more. 

 

rethink the qualities of effective leaders

An engaged and effective workforce starts from the top — with great leaders who motivate, inspire and empower team members to perform at their very best every day. So the question is: What specific qualities should you be looking for in those leaders? 

 

In Workplace 2025: The Post-Digital Frontier, a Randstad study compiling the responses of nearly 3,000 employees across the U.S., four competencies emerged as the essential attributes of effective leaders:

 

super hero graphic CheckList_Yellowhaving the ability to keep people connected and engaged 
CheckList_Yellowbeing more agile and digitally savvy 
CheckList_Yellowdriving a culture of innovation, learning and continuous improvement 
CheckList_Yellowbeing adept at risk-taking 

Does this sound like a familiar portrait of the leaders currently in place at your company today? If so, great! Your engagement issue obviously doesn't stem from on high. But if not, attracting and hiring new leadership should be an urgent organizational priority. 

 

consider teaming up with a strategic partner

Strategic partners can deliver significant value to organizations facing a wide-range of different workforce pain points, from employee engagement to retention and workforce management, and more.

 

To really make headway on engagement, you should consider joining forces with a strategic partner that can not only help you land top talent, but provide you with an end-to-end blueprint for improvement. Whether that means resources and guidance on creating better work environments, support building out training and upskilling initiatives or professional development maps for all of your team members, strategic partners can transform the way you're currently approaching and taking action on all things engagement — and that should yield clear ROI.

 

a staffing partner can help you find top talent, then provide you with tailored employee engagement strategies to help you get the most out of your people.

 

final takeaways

To keep top performers engaged, many leading companies are  recognizing they need to do more. You aren't alone in thinking it may be time to retool your approach.

 

Armed with the insights and advice from this ebook, you should be ready to institute a number of changes. Whether broad in scope or narrowly targeted, these improvements hold the potential to deliver far-reaching business impact.

 

By implementing the practices outlined in this ebook, you should be all set to take action, build consensus with key internal stakeholders, ally with strategic partners — and ultimately realize a best-in-class workforce.

 

Like the proverbial thousand-mile journey, it all starts with a single step. 

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