Benefits of investing in employee engagement

Employee engagement strategies are rising up the employee retention agenda with good reason, says David McCormack, CEO of outsourced payroll solutions and worker benefits provider HIVE360.

Employee engagement is essential for sustained success and affects customer satisfaction, productivity and sales levels, along with future planning capabilities.

Employees’ low interest in work can be linked to several people issues that can limit a business’ efficiency, sustainability, and productivity – from absenteeism and poor performance to employee burnout and wellbeing struggles.

It is vital companies of all sizes take engagement seriously, especially if retention rates aren’t improving.

Employee engagement levels in the UK are one of the worst in Europe with fewer than one in 10 UK employees feeling enthusiastic about their job. Just 9% of UK workers surveyed for Gallup’s ‘State of the global workforce’ report felt enthused by their work and workplace in 2022, well below the European average of 14%.

In 2018, employee engagement was considered the biggest challenge by 41% of HR Directors. Whilst we know that engaged employees create results, many employers might not actually understand what employee engagement is and how it is important in retention schemes.

A report by Deloitte found that 85% of leaders say employee engagement is a strategic priority, while other research finds that 37% of engaged employees are either open to, or looking for new opportunities, compared to 73% of actively disengaged employees*.

What is employee engagement?

By definition, employee engagement is the level of commitment and loyalty employees have to their company’s culture and success. It is the strength of the mental and emotional connection employees feel towards their work, their teams and company, and the involvement and enthusiasm of employees in both their work and workplace.

For example, a study by Gallup** found that employee engagement affects almost every important aspect of a company, including profitability, revenue, customer experience and employee turnover, and that engaged workers who are not thriving in their lives are much more vulnerable and add risk to their employer’s organisation.

Employee engagement can be measured by how employees see and rate the most crucial elements of workplace culture, including understanding performance expectation, recognition and praise, support for professional development and opinions, and relationships with colleagues and managers. Measuring and managing engagement in an organisation is critical to the success of its employees and the organisation as a whole.

Why invest in employee engagement?

Engaged employees make for better employee retention, and have higher wellbeing, lower absenteeism and higher productivity.

Low engagement doesn’t only cost employees their wellbeing, but can cost the business too. One study estimates the average cost to the UK of disengaged employees as high as £70 billion per year in lost productivity, and more than £5 trillion+ worldwide.

  • Engaged employees take less than half the number of sick days than disengaged employees.
  • Engaged companies experience 17% higher productivity, 20% higher sales, and 21% higher profitability.
  • Organisations with highly engaged employees give shareholders 22% higher returns.
  • Increased engagement has the potential to add around ÂŁ26 billion to UK GSP.

Why is employee retention important?

Having established that engaged employees are significantly more likely to stay, just what are the business benefits of this?

From savings on recruitment costs to increased productivity, keeping your people, who are at the heart of every organisation, has many benefits, including:

‱ Higher productivity: Employee retention and wellbeing go hand in hand; when staff members feel valued and supported, they’re usually happier to come to work. On the other hand, poor employee retention and constantly hiring new staff reduces productivity, necessitating time training and onboarding, instead of focusing on driving the business forward.
‱ Positive work environment: A positive attitude towards employee retention shows staff they are essential to the business. Employers foster a positive working environment that encourages people to thrive. Staff should go to work feeling valued and important, and concentrating on employee retention will support this narrative and help staff enjoy work, in turn boosting morale and improving employee engagement.

Employee engagement tools

HIVE360 enables businesses to improve employee engagement and wellbeing with its unique approach to payroll outsourcing and employee wellbeing and support. It is a specialist outsourced PAYE payroll, employee benefits and engagement company, which ensures full HMRC, RTI, GLAA and IR35 compliance, together with providing expert, compliant and reliable PAYE payroll support and comprehensive employment administration for businesses, recruiters and recruitment agencies, their workforce and candidates.

HIVE360 provides its customisable employee benefits and wellbeing package via the unique Engage Employee Benefits app as standard to businesses that outsource payroll and employment administration to the company. Available in 120 languages, Engage includes My Health, My Money, My Discounts, and My Work features and has an average of 100,000-plus user sessions each month, with average levels of user engagement of around 85%.  For more information, visit:


* Employee Engagement: It’s Time to Go ‘All In’ | Dale Carnegie Training

** Thriving Employees Create a Thriving Business (