80% of HR professionals say that Employee Engagement is an important area of focus for their organizations and most leaders today are fixated on measuring and growing it. But why? Why is it so critical for leaders to increase the engagement of their employees? How does it benefit their organizations?

What is employee engagement?

Let’s begin by answering the question: What exactly is employee engagement?

Some people incorrectly associate employee engagement with employee satisfaction. A satisfied employee turns up to work on time, does what is asked of them and leaves on time, quite content with their lot. As satisfied employees they are not actively looking for a new job – their current job fulfils their desires and needs at work  – but if a better offer came along, it might not take much to encourage them to jump ship.

Some assume that employee engagement equates to employee happiness. This is also quite inaccurate. A happy employee might derive huge amounts of happiness from interacting with his or her work colleagues, but may not behave in a way that aligns with the organization’s vision and objectives.

A motivated employee is ready to work hard because of an associated reward, whether this reward is intrinsic (recognition or a self growth opportunity for instance) or extrinsic (a pay rise or potential commission), but it’s not quite the same as an engaged employee.

Engaged employees love what they do. They’re actively working towards the improvement of their company. Engaged employees believe in the work they do. They believe in their organisation and they understand how what they do is connected to achieving the organisational goals and the overall success of the company.

Engaged employees will feel an emotional commitment to their company – going the extra mile to do something over and above what is expected of them. Kevin Kruse, New York Times best selling author of “Employee Engagement 2.0” defines this as “giving discretionary effort” to their company.

The Society of Human Resources listed 6 top motivators for engaged employees. They are as follows:

1. The work itself
2. Relationships with co-workers
3. Opportunities to use skills and abilities
4. Relationship with immediate superior
5. Contribution of their work to the organisations goals
6. Autonomy and independence

But perhaps the best way to describe the attributes of an engaged employee is with an anecdote. Steve Wynn, the billionaire founder of Wynn resorts was talking at a Tony Robbins Business Mastery event, where he recounted a story about one of his employees, a bellman at his Las Vegas Wynn Resort.

The bellman was helping an elderly couple from California with their bags when the elderly lady suddenly realised she had forgotten the bag containing their vital medicine and had left it at home. She started to panic and began talking about flying back to California when the Bellmen interjected and asked them where they lived. They told him they lived in Pacific Palisades. He asked the couple when they next needed the medicine. They told him they needed it by 7am the following day. He questioned if there was anyone who could give access to their property so that the medicine bag could be collected and they confirmed that their housekeeper was at home.

The bellman told them that his brother lived close by and he would get him to go over to the house and collect the medicine bag from the housekeeper. The bellman assured them he would take care of everything and told the couple to go and enjoy dinner while he sorted everything out. Sure enough, by 7am the following morning the elderly couple got their medicine. The Bellman had driven all the way to California, collected the medicine bag from his brother and driven all the way back to Las Vegas through the night, getting back to the hotel in time to deliver the medicine bag to the couple.

How do engaged employees benefit their organizations?

Just think about the beneficial effect that this one highly engaged employee’s actions had for the hotel. The couple would have no doubt told the story a hundred times, which would then have been retold and recounted. Nothing is more powerful for companies than the influence of word of mouth and hearing positive stories like this will inspire people to choose the services of those companies over their competitors.

Research has actually uncovered that organizations with highly engaged employees are 200% more profitable than companies with lower levels of employee engagement. That is a staggering statistic.

Since such discretionary effort by an employee can result in significantly increased customer loyalty, as in the anecdote above, and engaged employees are generally more productive than unengaged employees, it is easy to see how this can affect company performance and ultimately turnover. But  we should also consider the positive effects of highly engaged employees on a company’s costs, which directly affect the company’s profits.

It costs a lot to replace an employee that decides to leave. When you consider the costs of interviewing, hiring, training, reduced productivity, lost opportunity costs, let alone the huge placement costs charged by recruitment agents, the cost of replacing an entry-level employee, according to ERE Media, is around 30% to 50% of the employee’s base salary. This rises to 150% of the base salary for a mid-level employee and an eye watering 400% of the base salary for a high-level or highly specialized employee.

Given that engaged employees are 59% less likely to look for a job with a different organization in the next 12 months, you can start to see why it is in the interests of employers to ensure that their workforce is highly engaged.

Simon Bates is CEO of Workteam, an HR Management System for businesses of all sizes with a focus on growing employee engagement. Visit http://workte.am to find out how it can benefit your organization.