Engagement Isn’t the End Variable

At our annual Connections conference in Orlando last week, Lighthouse Research Principal Analyst Ben Eubanks talked to us about employee engagement. Most know that diminished engagement has reached a crisis point – only 30 percent of workers are engaged. Eighty-nine percent of Glassdoor users are either actively looking for new jobs or would consider better opportunities. And 93 percent of workers that took a new job did so outside their current organizations.

According to Eubanks, our mistake as HR professionals lies in thinking that our leaders are focused on engagement as a unique outcome. But engagement is typically not the end variable. Rather, CEOs want to move the needle on productivity, customer satisfaction, retention, and revenue. The key is to understand how employee engagement impacts all of these things.

For example, per IBM, employees who score highly on the experience index, which is correlated with engagement, gave 40 percentage points more discretionary effort and were therefore far more productive. Per Aon Hewitt, teams of engaged employees saw an additional 25 percent growth in Net Promoter Scores. The Corporate Leadership Council found that engaged employees have the potential to reduce staff turnover up to 87 percent, while Hay Group discovered that engaged workforces lead to 2.5% annual revenue growth.

In building a business case to focus on engagement, you must make an effort to use the same language as your leaders. Eubanks suggested that you gather data on these metrics (productivity, customer satisfaction, retention, revenue, etc.) as they currently exist in your business. Plot them against your employee engagement data and note any connections or correlations. What are your strongest conclusions? For instance, is there a team that’s driving the greatest business value that you need to focus on engaging and retaining?

When it comes to increasing engagement itself, far too often HR professionals think that it’s simply a matter of fixing one area that’s broken – like sourcing, recruiting, training, or diversity. But lack of engagement tends to be an overarching problem that’s best fixed through global cultural changes. For one thing, we must focus on the manager/employee link, since according to Gallup, 70 percent of engagement variance is manager-driven. For another, we must promote employee growth the development as well as diversity and inclusion. Perceived lack of development is the #1 reason people leave their jobs, and employees are twice as likely to be engaged if a workplace embraces individual differences.

Organizations would be better served to focus on the holistic employee experience as a means to achieve positive business outcomes throughout the entire employee life cycle vs. a single moment in time where engagement is measured.

Download Employee Experience in 2025 to discover insightful ideas to transform employee experiences.