Employee engagement

Why It Pays to Invest in Employee Engagement

Andy Lucich
November 10, 2022
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Uncertainty in the current U.S. economy, from rising inflation to slowing economic activity, presents myriad challenges to employers. With tightened budgets and a general fear of the unknown, companies should put a concerted effort into investing in technologies that will drive high productivity and profits.

And guess what? Employee engagement and recognition are at the forefront of this conversation. 💚

Read more to understand the real costs associated with employee disengagement, the ROI of employee recognition and engagement, and the top three areas to focus on when it comes to improving it.

The cost of employee disengagement

Here's a number that should catch your attention: globally, businesses lose up to $7.8 trillion in lost productivity due to employee disengagement. When employees aren't motivated, the amount of time and effort they're willing to invest in their day-to-day work declines—negatively impacting all areas of your business.

The study above details the meta-analysis of over 112,000 businesses which uncovered that organizations scoring in the top 25% for employee engagement experienced these benefits compared to the bottom 25%:

  • 10% greater customer loyalty and engagement
  • 23% higher profitability
  • 18% more sales
  • 14% greater employee productivity
  • 18% less turnover for companies with historically high turnover (those with average annual turnover rates above 40%)
  • 43% less turnover for companies with historically low turnover (those with average annual turnover rates at or below 40%)

Additionally, Forbes notes that companies with highly engaged teams outperform their competitors by 147%. With this being the case, we turn to levers that you can use to engage your employees. 


Happy employees


Three things that impact employee engagement

1. Empowering managers 

  • Learning & development

    As an HR or company leader, you can support managers by providing them with tools and strategies for learning and development in your organization. Managers are among the most influential people in your company in impacting employee engagement and morale. It’s important to proactively set them up for success.

  • One-on-ones

    Managers and employees should be encouraged to exchange feedback and engage in dynamic conversations regularly (we recommend weekly or bi-weekly). Unfortunately, 1:1 meetings are often misused or not used at all—yet they can be a powerful place to engage employees. Because we know how important those 1:1's are, we created a customizable one-on-one meeting agenda template that provides a proven structure for effective and productive meetings.

  • Transparency

    Writing for HR Dive, Laurel Kalser penned the increasingly necessary article, Is your business transparency-ready? Citing a recent study that highlighted criteria for an organization's readiness to provide increased levels of transparency,


A company may be ready if: it has a healthy work culture, which provides psychological safety, collaboration and aligned organizational values; it has a strong communications foundation; its stakeholders.

Simply put, transparency in the workplace is the future.




2. Employee wellness

  • Mental and physical health

    Acknowledging an employee's wellness in physical and mental health is a welcomed change in the workforce. It’s especially important for company leaders to consider implementing wellness programs when deciding the employee benefits they will offer. 

  • Flexibility

    We are keenly aware that flexibility comes in many forms, such as schedules, work locations, and office hours. It also impacts employee engagement. A study by McKinsey & Company states,


A flexible working arrangement is a top three motivator for finding a new job.  


The study concludes that companies seeking top talent would be wise to invest in technology that allows for flexibility in schedules and locations.  An additional survey from Ergotron, a global leader in designing ergonomic solutions, relays that of 1,000 respondents, 56% of employees report improvements to their mental health due to flexible work locations, leading to increases in productivity. 

  • Diversity, equity, and inclusion

    Investing in programs and policies that affect change related to DEI initiatives has an untold and incalculable impact on the workforce. It is a real-time concern that many employees have increasingly taken note of, especially within the last several years. Yet, plenty of business cases that include announced or celebrated DEI initiatives are only impactful if there is accountability. So make sure your company is putting resources and effort into making impactful changes or your team could face negative consequences. This study by Catalyst found a connection between genuine DEI efforts and “positive job outcomes such as engagement and experiences of inclusion.” 
employee lifecycle

3. ROI of employee recognition

  • Turnover is costly—employee recognition is a powerful solution

    Employee turnover is costing you, but how much? Organizations with recognition-rich cultures experience better retention rates and, as a result, save a significant amount of money in lost productivity and recruiting costs when they lose fewer employees.

    Regular recognition also increases employee engagement by up to 60% (based on third-party research and Bonusly customer surveys). Engaged employees are less likely to leave, are more productive, and are valuable assets to your organization and your customers.

    Investing in employee engagement through employee recognition is the best way to help you gain a competitive edge and achieve your business goals.

Watch a recent webinar on this topic!

The Cost of Disengagement: Useful Insights for HR Leaders 

Today’s human resources professionals are tasked with reversing disengagement in their workplaces through initiatives like improved workplace transparency, learning and development opportunities, and meaningful appreciation and recognition programs. In this recording, Bonusly HR experts discuss why employee engagement programs are not only worth your investment but essential for connecting to and retaining top talent.

Watch the recording

Are you interested in learning more about Bonusly, the top-rated program that makes employee recognition effortless for your team or organization?

Get started with a free trial, demo, or quick tour of our fun, smart, and cost-effective employee recognition platform today. 


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