Why is employee engagement so important for a business?

Employee engagement is a key factor in the success of any organisation. But what exactly does it mean and what is the importance of employee engagement in a business achieving its objectives?

In this article we look at why is it so important that an organisation’s HR model is supportive and effective. Moreover, we explore how an organisation which takes steps to engage their employees can improve productivity, customer service, turnover, work culture, innovation, reputation and turnover. Understanding how to improve employee engagement is therefore crucial to the success of a business.

We also carried out a Twitter poll on employee engagement in the area of organisational change. The results seem to show that overall, employees have little confidence in the support they get from their HR colleagues. I spoke to David Scott, our associate director at Verita who runs our HR consultancy service, to hear his insights on this topic. David has been HR director at BT, HM Prison Service and United Utilities so knows something about the challenges facing an HR team.

What is employee engagement?

Employee engagement is the extent to which staff are enthusiastic about, and emotionally committed to, their organisation. It is a measure of the perspective employees have on workplace culture, how much they feel supported, and their ability to carry out their jobs effectively. It also refers to involvement, describing employees who take an active role in decision making, rather than being passive observers.

What is the importance of employee engagement?

Here are 7 reasons why employee engagement is vital in helping a business meet its objectives:

  1. Increased productivity: Engaged employees are more likely to be productive because they are more motivated and committed to their work. They are also more likely to go the extra mile and take on new challenges.
  2. Improved customer service: When employees are engaged, they are more likely to be helpful and friendly to customers. They are also more likely to be knowledgeable about the company’s products and services, which can lead to better customer satisfaction.
  3. Employee retention: Engaged employees are less likely to leave their jobs, which can save companies money on recruiting and training costs, as well as boosting employee morale overall.
  4. Improved work culture: When employees are engaged, they are more likely to be supportive of each other and to have a positive attitude towards their work. This can create a more enjoyable and productive work environment for everyone.
  5. Innovation: Engaged employees are more likely to come up with new ideas and solutions to problems. This can help companies to stay ahead of the competition.
  6. Enhanced reputation: When employees are engaged they are more likely to have positive feelings about their company. This results in an improved reputation through positive reviews and sentiments shared with those outside of the company. This can also make it easier to attract new, high quality employees.
  7. Increased profitability: Engaged employees operate in a productive work environment where the best staff are retained, so work and service levels are likely to be output at a higher quality, leading to an increase in profitability. This study by Gallup found that companies with highly engaged teams are 21% more profitable than others.

Why is it important that an organisation’s HR model is supportive of employee engagement?

The prime reason for a supportive HR function is to make sure the business meets its objectives. To support the business you have to support the people, and it is a virtuous circle. So employee engagement in HR plays a vital role.

The key to HR being effective is to be supportive of the right things. It should aim to meet the business objectives by supporting the people doing their jobs in an engaged and impactful way. Take, for example, a look at William Hill, whose HR team won the 2018 Personnel Today award.  Their work to restructure the organisation in the face of extreme commercial pressures involved creating nearly 400 new leadership roles, widespread changes to roles and responsibilities and an extensive harmonisation programme to bring 1000 staff onto consistent terms and conditions.

On top of this the HR team led the way on introducing new values and leadership behaviours and launched a new Retail Academy to improve the quality of leadership training.  In the wake of all this change, William Hill achieved a record 89% participation rate in its employee engagement survey. And following an event with its 500 leaders, 44% of them said they were “extremely positive” about the future of retail, with a further 28% feeling “very positive”.  So, it can be done!

HR is usually responsible for building the structures and processes that support both the business and its employees. That’s why recruitment processes seek to identify the best talent to come in.  That’s why we build training and development programmes to hone their skills once they are on board. That is why HR are engaged in employee reward procedures, to incentivise and reward people for excellent performance, and why we manage disciplinary and grievance procedures, to help employees meet the standards of performance or to get them out of the organisation if they are not performing or acting in line with the business objectives.

All the processes that HR are involved in are designed to meet the organisation’s business objectives by finding good people, supporting and training them on the job and by getting them to perform the best they can. But at times of significant change HR would normally be involved in helping design new organisational structures, mapping overlaps and gaps between existing employees and the new structures, implementing appointments processes to migrate employees to the new structure and dealing with people left displaced by the changes.  So it is not surprising that the work of HR comes under close scrutiny, at times when the stakes for the organisation and its people are high.

How do HR functions know the level of employee engagement?

For any HR function to know whether or not it is effective, you have to ask questions. There is no point assuming you are effective and congratulating yourself at the end of every quarter or every six months because you have hired more people, for example, because that doesn’t mean anything unless your organisation is telling you that you are effective. And the only way to find out the level of employee engagement in HR is to ask people what they think of you.

HR gets a lot of unsolicited feedback. HR people are often told what they are good at, and sometimes they are told what they are not so good at. However, in some cases, they do not ask for feedback and they don’t get told.

The best HR functions have a clear idea of how they are performing, and they regularly check their own performance with measurable feedback from their customers. As mentioned above, William Hill’s 89% participation rate in its employee engagement survey shows that they are aware of how HR are performing as a function and know how and where to improve. Those that actively seek feedback on their performance, contribution and effectiveness know their worth!

A Verita poll on employee engagement

In a previous Twitter poll we carried out on employee engagement in HR, we asked our followers if they felt supported by their HR function during organisational change. In a record response for a Verita poll nearly 2,000 people voted. And, extraordinarily, 61% of respondents told us that they did not feel supported by their HR function. 20% of respondents believed they are “somewhat supported”, and only 12% of participants told us that they were confident that they felt supported during organisational change.

What does this poll tell us about employee engagement and what should HR departments conclude from it?

Of course, we can’t know who responded to our poll – employers and employees may, understandably, have different views. But the overall feedback seems to indicate that satisfaction with the role of HR is in very short supply. We know that HR people are pulled in many different directions as they manage apparently contradictory and conflicting objectives – to ensure significant change is managed effectively, and to mitigate the damage that this can often have on individuals.

How can Verita help?

Verita can support businesses by assisting organisations in developing surveys and feedback processes to allow for HR to get regular input on employee engagement and from customers. This will ensure that your HR function can become as effective as possible, to drive up employee satisfaction while meeting business objectives.


Find out more information on the importance of employee engagement and Verita’s HR consultancy please book a free consultation or contact Ed Marsden on 020 7494 5670 or [email protected].

Our Twitter poll ran for 7 days and asked the question:

During significant organisational change, do you feel supported by your HR function? Please comment.


12% Yes

61% No

20% Somewhat

7% other


This article was written in June 2019 and was updated with additional content in August 2023.


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