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3 Reasons Why Employee Engagement Matters (and 4 Tips to Enhance It)

The Great Resignation challenges HR professionals to find new ways to engage and retain employees. That’s a tall order, especially while engagement in the U.S. is caught in its biggest slump in over a decade.

According to Gallup’s 2022 State of the Global Workplace report, only 21% of employees say they’re actively engaged. On top of this, a mere 1 in 3 workers claim they’re thriving in their overall well-being. The study marks a noticeable stall in engagement and wellness.

Championing engagement and happiness is crucial to the long-term health of an employee experience and a business. Luckily, HR leaders are uniquely poised to overcome this hurdle. Let’s explore:

  • the changing happiness and engagement landscape
  • how happiness helps organizations
  • practical ways HR can assist

With this knowledge, you’ll have the means to form your own employee engagement strategies.

Concerning shifts in employee engagement

Today, employees know exactly what they need. They also have higher expectations for how those needs are met and exceeded.

But why are employees more disengaged now than before? Jenn Lim, co-founder and CEO of the consulting firm Delivering Happiness, said in a recent podcast engagement is likely impacted by:

  • pandemic stress
  • economic changes
  • social justice concerns
  • global unrest

These factors compound the regular stress many employees feel daily. Lim also suspects some workers endure unchecked unhappiness — possibly for years!

Unhappiness doesn’t lie dormant for long; employees shift their focus to personal fulfillment as they look at other opportunities. At the same time, disengagement and disinterest with their current role tends to rise.

A recent survey from business intelligence company Morning Consult and Paycom reveals sharp differences between the perspectives of happy and unhappy employees. The most severe gaps involve:

  • self-fulfillment
  • company culture
  • manager and HR support

For example, only 28% of unhappy employees claim they’re satisfied with their level of self-fulfillment and enjoyment. But a staggering 88% of happy employees say they’re satisfied in the same areas.

Happiness plays a clear part in an employee’s long-term engagement, but how does it affect an entire organization?

Engagement and happiness elevate businesses

Put simply, engaged, happy employees are secure employees. Let’s examine three ways this translates to a healthier company:


Retaining can be tough for any business. The Morning Consult research reveals 50% of employees are open to new positions, while 39% of unhappy employees are actively looking for a new job. In fact, 1 in 5 employees who recently changed jobs are still searching.

HR professionals are no doubt familiar with this challenge and its associated cost. Every piece of the onboarding and offboarding processes add up; in fact, Gallup estimates replacing an employee costs one-half to twice as much as their annual salary. Happy and engaged workers help businesses avoid this pricey pitfall.


Happy employees help organizations thrive. A six-month study from Oxford University in 2019 found happy workers to be 13% more productive on average. Not only did satisfied employees work faster and at a higher volume, they also formed better relationships with clients.""

A similar trend holds when comparing companies of the same industry. According to a 2020 study from Gallup, when employees are happy and attached to their work, their businesses experience spikes of 14% to 18% in productivity across multiple areas. Happiness is the fuel behind an organization’s most valuable resource: its employees!


Higher retention and productivity are great, but does employee happiness have a clear impact on a business’s bottom line? According to Gallup’s 2022 report, businesses with engaged, happy workers enjoy a 23% higher profit than those with a poor employee experience.

Ensuring employee happiness doesn’t mean an organization has to make compromises elsewhere. In fact, prioritizing engagement is a spark to enhance operations across the board.

Practices to enhance employee engagement

Any push in the workplace needs to be backed by a sound strategy. Here are four ways to help build yours for employee engagement and happiness:

1. Assess and improve culture

Happy employees can’t exist in a place they don’t want to be. According to Harvard Business Review, the level of purpose an employee finds in their work directly influences their overall well-being. The closer a company’s culture aligns with the beliefs and motivations of its employees, the more likely they’ll want to stay.

But what makes a company’s culture great? “A great organizational culture is one that lives and breathes its purpose and values,” Lim said.

She also emphasized the need for clear, direct communication and alignment across all areas of a business. Having that allows agile organizations to make continual enhancements to their employee experience.

2. Invest in wellness

Workers need to know their employer cares for their mental and physical health. A 2020 Gallup study found 76% of employees feel burnout at least sometimes, and 28% say they feel it constantly.

Several methods exist to offset burnout and holistically enhance wellness, but what works for one workforce might not for another. Finding the right mix of benefits and programs may take time, but any push in a happier, healthier direction for employees is worth making.

3. Develop great leaders

Managers are often an employee’s closest point of contact. As such, they have a heavy impact on engagement and happiness. According to Gallup, leadership has the means to manage these five factors leading to burnout:

  • unfair treatment
  • unmanageable workloads
  • unclear communication
  • lack of support
  • unreasonable deadlines

In a 2019 Gallup study, more than half of voluntarily exiting employees claimed that within the three months before they left, a supervisor never spoke with them about their happiness. ""Simply encouraging managers to talk to their staff helps build a needed sense of belonging and trust among their employees.

4. Invest in the right HR tech

Tedious manual and paper-based tasks hold back even the most exceptional talent. And when HR professionals are burdened with constant data entry and potential inaccuracy, they have less time to focus on delivering great employee engagement programs.

In a OnePoll survey commissioned by Paycom, employees overwhelmingly said quick, easy access to their own data is among the most important functions HR tech should provide. When employees are entrusted with managing their own data, they reciprocate that trust back into their organization.

For more insight from Lim about engaging the workplace, listen to our podcast, When Work and Life Connect: Rethinking Purpose, Engagement and Happiness. And explore Paycom’s easy-to-use app for HR and payroll to see how it’s synonymous with happy employees.

DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.