Employee Engagement: Boost Productivity & Retention

Employee engagement refers to the level of enthusiasm, commitment and involvement employees have towards their work, team and organisation. Engaged employees are more productive, motivated and likely to remain loyal, contributing positively to business performance and workplace culture.

The key risks of poor employee engagement include low productivity, increased absenteeism, and higher staff turnover. Disengaged employees may also negatively impact team morale, customer satisfaction, and business outcomes. Employers must ensure they monitor engagement levels regularly through surveys, feedback sessions, and performance reviews to identify any issues early.

Consideration must also be given to work-life balance, as burnout or dissatisfaction can erode engagement levels. Employers should be aware of the importance of fairness, particularly around pay, career progression and recognition to avoid employees feeling undervalued.

 

The importance of employee engagement

 

Employee engagement is the combination of an employee’s emotional response towards their job and their employer with their resulting behaviour at work.

A highly engaged employee will be supportive of the organisation and their mindset will be in line with their employer’s values and objectives. They will be an enthusiastic and devoted worker and actively seek career progression within the organisation. Such a worker is, therefore, a benefit to the employer as they work in a productive and efficient manner.

By comparison, an employee who is not engaged, that is, they are disengaged, will feel dissatisfied with their job and employer, and be more likely to take sick time, perform badly at work, or seek employment elsewhere.

 

Risks for Employers of Poor Employee Engagement

 

Poor employee engagement can have significant consequences for businesses, impacting productivity, workplace culture, and financial performance. Employers must be aware of these risks and address them promptly to prevent long-term damage to their organisation.

 

Reduced Productivity

 

Disengaged employees are less likely to be committed to their work, resulting in reduced output and poorer quality of work. When employees feel undervalued or unmotivated, they are less inclined to go above and beyond in their roles, which can affect deadlines, efficiency, and overall business performance.

 

Increased Absenteeism

 

A lack of engagement often leads to higher rates of absenteeism as employees are less motivated to attend work or feel dissatisfied with their role. Frequent absences can disrupt workflows, place additional pressure on engaged staff, and increase operational costs.

 

Higher Staff Turnover

 

Disengaged employees are more likely to seek opportunities elsewhere, leading to increased staff turnover. High turnover not only creates recruitment and training costs but also results in the loss of valuable skills and knowledge, affecting continuity within teams.

 

Poor Workplace Morale

 

Low engagement can spread throughout teams, creating a negative work environment. When employees are unhappy or uninspired, morale suffers, leading to reduced collaboration, communication breakdowns, and a lack of enthusiasm across the workplace.

 

Negative Customer Experience

 

Disengaged employees may deliver substandard service, impacting customer satisfaction and loyalty. Poor interactions with clients or customers can harm the organisation’s reputation and, ultimately, its profitability.

 

Increased Risk of Burnout for Others

 

When disengaged employees underperform, the workload often falls on their engaged colleagues. This can lead to stress, resentment, and burnout among high-performing staff, increasing the risk of further disengagement or turnover.

 

Financial Impact

 

The cumulative effect of poor employee engagement – lower productivity, absenteeism, turnover, and dissatisfied customers – can have a significant financial impact. Employers may face rising costs due to recruitment, lost revenue, and reduced operational efficiency.

 

Greater Risk of Conflict

 

A disengaged workforce may contribute to greater tension and conflict within teams. Frustration can build among employees who feel unsupported, leading to disputes and damaging relationships in the workplace.

 

Rules in Relation to Employee Engagement

 

While there is no single piece of legislation in the UK directly governing employee engagement, various employment laws and regulations contribute to the conditions that help create an engaged and motivated workforce.

 

Health and Safety Obligations

 

Under the Health and Safety at Work Act 1974, employers are legally required to provide a safe and healthy working environment. Failing to meet health and safety standards can damage employee morale and engagement. Employers must address workplace risks, provide necessary training, and support employee wellbeing to ensure a positive and safe environment.

 

The Right to Fair Treatment and Protection from Discrimination

 

The Equality Act 2010 protects employees from discrimination, harassment, and victimisation based on protected characteristics, such as age, race, gender, disability, religion, or sexual orientation. Employees who feel unfairly treated or discriminated against are far less likely to feel engaged and motivated at work. Employers must take proactive steps to promote equality, diversity, and inclusion in the workplace.

 

Minimum Wage and Fair Pay

 

Under the National Minimum Wage Act 1998 and the National Living Wage requirements, employees must receive at least the minimum wage for their age group. Fair pay is fundamental to engagement, as underpayment or wage disputes can result in dissatisfaction and disengagement. Employers must ensure compliance with wage laws and review pay structures regularly to ensure fairness.

 

Working Hours and Breaks

 

The Working Time Regulations 1998 set out rules regarding maximum weekly working hours, rest breaks, and paid annual leave. Employees are entitled to:

 

• A maximum 48-hour working week (unless they opt out).
• Rest breaks (20 minutes for every 6 hours worked).
• At least 5.6 weeks of paid annual leave per year.

 

Overworking employees without adequate rest can lead to burnout, stress, and reduced engagement, so compliance with these rules is vital.

 

Employee Consultation Rights

 

Under the Information and Consultation of Employees (ICE) Regulations 2004, employees have the right to be consulted on significant workplace changes, such as restructures, redundancies, or changes to terms and conditions. Effective consultation shows employees that their voices are valued and promotes engagement by involving them in decision-making processes.

 

Right to Request Flexible Working

 

The Employment Relations (Flexible Working) Act 2023, effective from April 2024, makes flexible working a “day-one right” for employees. Employees can request changes to their working hours, patterns, or location. Employers must respond reasonably to these requests, as flexible working can improve work-life balance, reduce stress, and enhance engagement.

 

Protection for Whistleblowers

 

The Public Interest Disclosure Act 1998 protects employees who raise concerns about wrongdoing, such as illegal activity or health and safety breaches. Employers who create a safe, open culture for raising issues are more likely to build trust and engagement. Retaliating against whistleblowers can lead to significant legal and reputational risks.

 

Employee Rights to Training and Development

 

Employers are encouraged to provide ongoing training and professional development opportunities under the Apprenticeships, Skills, Children and Learning Act 2009 and general best practices. Employees who are given opportunities to develop their skills are more likely to feel valued, leading to higher engagement and retention.

 

Fair Dismissal Procedures

 

Under the Employment Rights Act 1996, employers must ensure any dismissal follows a fair process. Treating employees unfairly can harm morale among remaining staff and undermine engagement. Adhering to disciplinary and grievance procedures, as outlined in the ACAS Code of Practice, is essential to maintaining trust in the workplace.

 

Mental Health and Wellbeing Support

 

While there is no specific law mandating mental health support, employers have a duty of care to ensure employee wellbeing. Failing to address mental health concerns can increase absenteeism, stress, and disengagement. Employers are encouraged to implement mental health policies, provide support resources, and promote a healthy work-life balance.

 

Strategies and Best Practices for Improving Employee Engagement

 

Addressing poor employee engagement requires a proactive and structured approach. Employers must adopt strategies that focus on creating a positive, supportive, and motivating workplace environment.

 

Foster Open and Transparent Communication

 

Clear and honest communication is key to building trust with employees. Employers should ensure that information about company goals, changes, and performance expectations is shared regularly. Encouraging two-way communication, such as team meetings, feedback sessions, and suggestion channels, allows employees to feel heard and valued.

 

Recognise and Reward Achievements

 

Recognising employees’ efforts and achievements significantly boosts morale and motivation. Employers can implement formal recognition programmes, such as “Employee of the Month,” or use informal approaches like personalised praise in team meetings. Offering tangible rewards, such as bonuses, additional leave, or development opportunities, reinforces appreciation for hard work.

 

Offer Professional Development Opportunities

 

Investing in employees’ growth shows that their contribution is valued. Employers should provide opportunities for skills training, mentoring programmes, and career progression. Regular performance reviews and development plans help employees see a clear pathway for their growth, increasing engagement and retention.

 

Promote Work-Life Balance

 

Work-life balance is a key driver of employee engagement. Employers can offer flexible working arrangements, such as remote work, part-time hours, or compressed weeks, to accommodate personal needs. Encouraging employees to take breaks, holidays, and time off when needed helps prevent burnout and enhances overall wellbeing.

 

Provide Support for Employee Wellbeing

 

Supporting employees’ mental and physical wellbeing is essential to creating a healthy, engaged workforce. Employers can introduce wellbeing initiatives such as mental health support programmes, Employee Assistance Programmes (EAPs), and access to counselling services. Encouraging physical wellness, such as gym memberships or wellness challenges, also supports a healthier workforce.

 

Build Strong Leadership

 

Leaders play a key role in influencing employee engagement. Managers should focus on providing guidance, support, and regular feedback. Offering leadership training helps ensure managers are approachable, empathetic, and capable of motivating their teams effectively. Good leadership fosters trust, collaboration, and a positive working culture.

 

Align Employees with Organisational Goals

 

Employees are more engaged when they understand how their work contributes to the organisation’s success. Employers should connect day-to-day tasks to larger company objectives, showing employees the value of their roles. Team goals, performance incentives, and regular updates on company achievements help align everyone’s efforts.

 

Involve Employees in Decision-Making

 

Involving employees in decisions that affect their roles or the workplace increases their sense of ownership and commitment. Employers can use feedback surveys, focus groups, and brainstorming sessions to involve staff in shaping policies, procedures, or new initiatives.

 

Develop a Culture of Trust and Inclusion

 

Creating a workplace where all employees feel respected and included is essential. Employers should focus on building an inclusive culture by promoting diversity, providing equal opportunities, and ensuring fair treatment for all. Employees who feel valued and included are more likely to be committed to the organisation.

 

Act on Feedback

 

Regularly gathering and acting on employee feedback is vital to improving engagement. Employers can use engagement surveys or one-to-one meetings to identify concerns. Addressing issues promptly and implementing changes based on feedback demonstrates that the organisation values employees’ opinions and is committed to creating a better work environment.

 

Employee engagement during organisational change

 

As part of any planning for organisational change, employers should take proactive steps to manage and optimise the impact of changes in the workplace that support the change objectives and deliver organisational value.

Organisational change, by its very nature, can be a source of concern and anxiety for employees. Handled poorly, and change processes can result in reduced morale and productivity, failed change adoption and employee attrition.

Organisational change can generally be broken down into three types:

Organisational restructuring

 

Organisational restructuring often results in the loss of jobs. Examples include removing middle management roles and splitting their responsibilities between remaining employees above and below them; moving administrative and secretarial roles from a number of teams and placing them under the leadership of a new management role; or outsourcing a function of the organisation, for instance, the call centre element, and making resulting redundancies.

Merger or acquisition

 

A merger, where two organisations join, or acquisition, where one company buys (acquires) another will generally create a period of organisational change.

For instance, a large confectionery company buys a small business that manufactures cookies, or two competing technology organisations merge to share their slice of the market.

Strategy transformation

Strategy transformation generally results in adopting new ways of doing business, be that in process, objectives, or vision. For instance, a retail business decides to move its business wholly online because its target audience are already tech-savvy and sales made via its retail units are very low in comparison to online sales. The costs of running these retail units are also increasing as rents and other operating costs go up.

 

Employer considerations when managing change 

 

During a period of organisational change, the importance of managing employee engagement may not be given the time and consideration it deserves.

Where employees are not made aware of what changes will happen and the direction the employer wishes to take, many will arrive at their own conclusions – rightly or wrongly – and discuss these with their colleagues. Rumours may begin to spread around the workforce, leading to dissatisfaction and a ‘jump before you’re pushed’ attitude.

Whether jobs will be lost or not, an employer should not make the assumption that employees who are unaffected by the changes, perhaps because their jobs are safe, should not be kept informed about the situation. Some employees may wish to take the opportunity of the changes at work to ask for alternative employment, for instance, moving to a job share or a newly-created role. Leaving ‘safe’ employees out of the discussions can de-motivate those workers and cause them to feel that they are not valued.

Where changes have meant the loss or re-arrangement of departments or teams, it may be that the involved employees are unhappy or uncomfortable with the new dynamics of their group. Old working relationships may have come to an end. Employees may now be working with people they are unsure of. It may be necessary to look into team-building exercises, one-to-one review meetings and discuss the new team dynamics with the team manager.

 

Best practice for employers

 

As we’ve seen, employee engagement may be affected even before the process of organisational change begins, so how can employers reassure their workforce and maintain their productivity?

Before and during organisational change

 

Handling employee engagement following organisational change may prove difficult if the situation isn’t addressed before and during the period of change.
The first step, therefore, must be to make employees aware of the changes to come from the beginning of the process. This will involve:

 

• Explaining the reasons for the change and the vision for the business going forward.
• Setting out how different areas of the business will be affected.
• Explaining how employees may be affected, e.g. new functions and opportunities, and possible redundancies.
• Holding meetings to make the above explanations rather than simply communicating the news by email or letter.

 

By informing the workforce what will happen from the very beginning, employees are much more likely to feel included in the employer’s journey and vision.

From the beginning, and during the period of change, the employer must check on the readiness of each area of the business for that change.

For instance, where it is known that certain functions of the business will be closed down and redundancies made, it will be necessary to enter into a redundancy consultation process. This will take time and may hold up other areas of change.

Another example is where the organisational change is caused by a merger of two businesses. At some point, both businesses must be ready to bring the two into one. Is one business lagging behind the other in readiness?

It may be useful to have a dedicated team to manage the process of change. These may be external consultants or senior members of staff temporarily seconded to the team. The team will manage the organisational change by working with key employees, such as managers, HR and team leaders, to both gather data and disseminate information throughout the business. Having a team in place who can offer guidance on the process of change can reassure employees that they have a place above their own leadership to go to for answers.

Throughout the process, line managers and HR should be available so that employees can talk through their concerns. These may be worries over job losses, relocation, moving to a new team, or simply a query on progress. It is important, therefore, that line managers and HR are made aware of what they can openly share with employees, the ongoing progress of the organisational change, and how to handle concerned employees. It may be necessary to provide an awareness and training session for line managers on how to handle queries from their workforce.

Post-change efforts

 

Once the organisational change has taken place, how can employee engagement be maintained?

As with any development in a business, it will be necessary to monitor and review the organisation in its new form. Are the new goals being met? Are new ways of working proving efficient? One key factor in maintaining employee engagement after a period of change is to include employees in monitoring the effects of that change.

This, in turn, will allow discussion between the workforce and the employer, provide an opportunity to explain and reinforce the reasons for the organisational change, and develop further understanding amongst the employees.

One of the best ways to encourage employee engagement after a period of change is to find out what employees think about the situation by asking them to fill out a survey. It is important, however, that once the survey data has been gathered, action is taken on any clear areas of concern, and feedback is provided to the workforce.

Where new teams or departments are formed, it may be necessary to improve teamwork in the workplace through clarifying the purpose of the team or department as a whole, defining the role of each member, setting clear goals for the team, working with the line manager to promote the above factors and taking part in team-building exercises.

All of the above methods should help to alleviate any concerns over joining a new team or remaining in a department that feels different due to the loss of long-time members.

Finally, keep talking to your employees. There should always be a method of communication for employees to not only voice concerns but also to provide solutions and be made aware of the business’ ongoing progress.

 

Need assistance?

 

DavidsonMorris are experienced human resource consultants and specialist employment lawyers. We work with employers to provide HR expertise in areas such as organisational change and employee engagement. We understand the importance of change projects in delivering organisational value, and key to this is ensuring your personnel are actively bought into the process and go on to live the changes.

We can provide a holistic view on the HR aspects and employment law risks that we recognise from substantial experience will require skilful handling and management to ensure the successful implementation of the change project.

If you are embarking on a change process and are concerned about the impact on internal engagement, contact us.

 

Employee engagement FAQs

 

What is employee engagement?

Employee engagement refers to the level of enthusiasm, commitment, and connection employees feel towards their work, team, and organisation.

 

Why is employee engagement important?

High engagement improves productivity, retention, and morale, while reducing absenteeism and turnover. It also enhances overall business performance.

 

How can employers measure employee engagement?

Employers can use surveys, feedback sessions, performance reviews, and informal discussions to gauge how engaged their workforce is.

 

What are the risks of poor employee engagement?

Poor engagement can lead to reduced productivity, high staff turnover, increased absenteeism, and a negative workplace culture.

 

What strategies improve employee engagement?

Effective strategies include open communication, recognising achievements, supporting professional development, promoting work-life balance, and offering wellbeing programmes.

 

How does leadership impact employee engagement?

Strong leadership builds trust, provides direction, and motivates employees. Managers play a key role in maintaining morale and ensuring employees feel valued.

 

Can flexible working improve engagement?

Yes, offering flexible working options, such as remote work or adjusted hours, can improve work-life balance and overall satisfaction.

 

How does recognition affect engagement?

Recognising and rewarding employees for their contributions helps boost morale, motivation, and loyalty to the organisation.

 

What role does feedback play in engagement?

Acting on employee feedback shows staff that their opinions are valued, helping to build trust and foster a positive working environment.

 

How can poor engagement be identified?

Signs of poor engagement include frequent absenteeism, low morale, decreased productivity, and higher staff turnover rates.