How To Improve Employee Engagement

One of the biggest challenges employers face today is a lack of engagement among their employees. This issue hit a nine-year high in 2022 in the U.S., with approximately three-fourths of employees reporting feeling disengaged.

Employee disengagement can lead to a number of problems for the employer such as low morale, decreased productivity and a higher rate of absenteeism. Most importantly, it can lead to employee turnover and financial loss.  According to new McKinsey research, employee disengagement and attrition could cost a median-size S&P 500 company between $228 million and $355 million a year in lost productivity.

McKinsey examined the growing problem of employee disengagement, the reasons behind it, and what employers can do to engage and motivate employees for greater satisfaction and productivity. 

Satisfaction – More than half of the surveyed employees reported being dissatisfied at work. The study broke down employees into six different groupings based on their satisfaction levels. The largest group (40 percent) was described as "execute business-as-usual activities, can go above and beyond, help peers, and perform activities that promote organization". The smallest group (4.5 percent) in the survey was considered "to have sustained well-being and performance, practice work-life balance, and have positive impact on team morale". McKinsey recommends companies can start addressing the problem by giving employees an anonymous test to identify where they fall on the satisfaction spectrum. 

Reasons for disengagement – The McKinsey study identified six reasons for employee disengagement, which included factors such as inadequate compensation, lack of meaningful work, and unsupportive co- workers. By identifying these factors and prioritizing how to combat the reasons for dissatisfaction, employers can take the first steps to solving the problem.

Quiet quitters – The term "quiet quitter" has gained popularity in recent years, referring to dissatisfied workers who stay at a company and underperform.  McKinsey cited a study in which over a three-year period, 20 percent of the workers surveyed in the UK said they would like to leave their employer but did not actually do so. This group was considerably less satisfied than other employees, with implications for attendance, productivity, innovation, and wellbeing. To combat this trend, employers can offer growth opportunities and professional development, incentivize and reward employees, and support a greater work-life balance.

Finding a purpose – Many employees expect their jobs to bring a significant sense of purpose in their lives. Companies that do not provide this sentiment are more likely to have their workers leave. Having an authentic corporate purpose can improve employee engagement and productivity. Employees whose sense of purpose is aligned with their companies' are five times more likely than their peers to feel fulfilled at work.

Empathetic leadership – With the increase of hybrid and remote office settings and digital communication, the workplace now has less personal interaction. In an effort to optimize efficiency, employers may become less sympathetic to the needs of their workers. But when companies create an atmosphere of compassion and empathy, people feel emotionally connected to their colleagues  and leaders, they work harder, faster, and more creatively. They also report greater mental health, morale and a desire to stay at their organization.

The full McKinsey report can be found here.