How to Keep Employees Engaged: The 8.8 Trillion Dollar Question

Engagement isn’t a fixed concept. It’s a fragile construct.

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There is so much talk around where and when we work that we have lost the plot on what really matters to a business: impact and performance. In 2022, a year of largely hybrid work, before return-to-office mandates became de rigueur, Gallup reported that 23% of employees were thriving at work, which is the highest percentage since they began measuring engagement in 2009 (Gallup, 2023). Rather than focusing on work location, our attention should shift to employee engagement, or the “simultaneous investment of an individual’s physical, cognitive, and emotional energy in active, full work performance,” (Rich et al., 2010) which seems to hold the key to unlocking organizational performance.

To further the case for driving engagement vs. location, Gallup identified that being disengaged is 3.8 times more likely to lead to employee stress than work location (Gallup, 2023). Similar to well-being, employee engagement is not a solo sport (Fleming, 2024), with even the most enthusiastic proactive individuals becoming disenfranchised at times, and without proper guidance and recognition, most employees will continue to “quiet quit” — costing a recently postulated 8.8 trillion dollars (Gallup, 2023). Employee engagement happens when great leaders help to cultivate the employee’s connection, trust, and loyalty to an organization. Engagement is not a fixed concept, but rather a fragile construct that is dependent on day-to-day interactions with fellow employees and employers.

Here are some tips for employers seeking to strengthen engagement:

1. Invest in leaders: We’ve all heard the quote, “people don’t quit jobs, they quit leaders.” Work has changed more in the last four years than it did in the prior thirty. Leaders need time to learn how to lead in this highly technologically advanced, “always-on" culture. And our employee populations have changed dramatically too. Generation Z grew up on social media and the majority of today’s senior leaders were born when landlines were still a thing. If we don’t pause and invest in our leaders, engagement is going to continue to be a challenge long into the future. The 2023 McKinsey & Co. “State of Organizations” report shows that “only 25% of respondents say their organizations’ leaders are engaged, are passionate, and inspire employees to the best possible extent.” Modern employees are looking for coaching and development as well as empathetic, authentic, inspirational leadership (McKinsey, 2023).

2. Recognition goes a long way: Several pivotal studies on psychosocial safety in the workplace show recognition as a key success factor in driving employee engagement. By rewarding behaviors we hope to grow within organizational cultures we are creating a positive feedback loop for employees (Grawitch et al., 2015). In addition, by recognizing employees, leaders are fostering a culture of belonging and increasing a sense of purpose and trust, all of which enhance engagement (Grant & Gino, 2012). Just because individuals are being paid to work, doesn’t mean we shouldn’t find ways to celebrate their achievements. After all, what we reward gets repeated.

3. Autonomy is critical: In 2023 while researching flexible work and productivity it became evident that autonomy had a positive effect on productivity, employee engagement, job satisfaction, well-being, and creativity (Fleming, 2023). Grant and Ashford (2008) further confirm that autonomous work increases creativity which in turn can enhance individual purpose and engagement. Ryan and Deci (1985) proposed the “Self Determination Theory,” of motivation, which suggests that autonomy, along with competence, and relatedness are required for the “highest quality motivation.” So while rewards and recognition are mediating factors for extrinsic motivation and engagement, autonomy is a key intrinsic motivator to increase employee engagement.

4. Purpose and Mattering: Jay Shetty has shared that people seek two things, “safety and significance,” and both lead to employee engagement. In Tomorrowmind, Gabriella Rosen Kellerman cites a 2018 study performed by BetterUp Labs showing that, on average, individuals were willing to "give up 23% of their lifetime earnings to do work that feels more meaningful." A common pitfall is believing that an organization's overarching purpose is enough to engage employees, when individual purpose is much more closely tied to one’s core values than it is to the type of work they do. Johnson and Jiang (2016) prove that in addition to improving engagement, “meaningful work” also contributes to employees living better lives outside of work. When company and individual purpose are aligned then employee engagement will soar.

5. Career Growth and Development: A recent study confirms that with today’s competitive labor market, increasing compensation and benefits does little to bolster loyalty and engagement for knowledge workers. Rather, the criticality of supporting individual achievement and the ability to help prepare employees for long-term career growth to drive engagement (Jia-Jun & Hua-Sing, 2022). Modern knowledge workers seem to care deeply about caring leadership and cultures that foster growth and development (Jia-Jun & Hua-Sing, 2022). Organizations wanting to hire and retain the most engaged talent should strongly consider improving platforms for individual and organizational growth and development.

There are a litany of factors that have been shown to improve employee engagement and performance, including autonomy. Over-indexing on where people work appears to have a negative effect on both organizational commitment and productivity. While there is much more research to come on employee engagement in distributed work, organizations must remember that what we reward gets repeated. Recognition and promotion belong to the people who help achieve company outcomes in a way that enhances culture, not those who log the most hours in-office or at the bar after work.

Published on
February 28, 2024
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