10 Drivers of Employee Engagement and How to Support Them at Your Company
Employee engagement is on the decline today. Read up on what drives it, plus ways to support it through creative benefits.
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Employee engagement refers to how connected an employee feels to the company that they work for, their coworkers, and the organization’s goals and mission. A highly engaged employee is excited to help their organization achieve its mission and looks forward to working alongside their teammates on projects.
Employee engagement has important implications for your business. Presenteeism increases and turnover decreases as employee engagement improves, creating a more productive and loyal workforce. Conversely, disengagement harms your bottom line: Disengaged employees cost U.S. organizations $450-$550 billion a year.
But after trending up in recent years, employee engagement is declining today. Only 32% of employees are engaged in 2022, down from 34% in 2021 and 36% in 2020. And 17% of employees are actively disengaged, up one percentage point from last year.
So what can leaders do to improve employee engagement? The first step is understanding what drives employee engagement. We’ve collected a few drivers of employee engagement to be aware of as you plan initiatives to increase satisfaction at your organization.
Employees today want to work for organizations that share many of the same values that they do: 56% of employees won’t even consider working at a company that has values they disagree with. Values alignment is the number one predictor of engagement, according to Achievers Workforce Institute’s 2020 Culture Report.
Companies need to clearly define their mission and core values to help employees feel connected to their workplace and give job candidates a sense of the culture they’ll be joining. For values to feel authentic, they need to be more than just a page on your website or document living in your intranet. They should be evident in communication from senior leadership, company events, and your employee benefits programs.
There’s a lot of opportunity to look at your employee benefits in particular and evaluate how much they align with and advance your company values. For example, Mindbody’s mission is to help people lead healthier, happier lives by connecting the world to wellness.
To demonstrate their commitment to this mission, Mindbody designed a Be Well wellness program that allows the company to support a wider set of wellness needs. Their program leverages the flexibility of a lifestyle spending account (LSA) to support seven dimensions of wellness: physical, emotional, intellectual, spiritual, environmental, social, and occupational. With an LSA, Mindbody can promote a more holistic vision of wellness and employees have more freedom to choose what works best for them when it comes to their wellness. The program has engaged 89% of employees to date.
It’s not a great experience as an employee to take part in a detailed survey and feel that your feedback wasn’t taken into consideration. Employees who complete employee engagement surveys want to see actual change as a result from these surveys. To show that you’re listening to employees and care about making them happy, it’s important to communicate survey results and share an action plan for addressing feedback. This can strengthen the connection employees feel toward their workplace and drives higher levels of employee engagement.
Many companies send regular employee benefits surveys to gauge employee satisfaction with their programs and reveal areas where there is room for improvement. The more adaptable that your benefits programs are, the easier it will be to modify them to accommodate new employee needs.
With an LSA program, it’s incredibly easy to add new spending categories or eligible expenses as needed. If employees give the feedback that they want a certain item to be covered under their benefits program, you can at any moment adjust your program to include that item or service.
Opportunities for professional development are incredibly important to high-performing individuals. A Conference Board survey found that 58% of employees are more likely to leave an employer if they do not offer opportunities for employee development. Helping your employees develop new skills and explore their professional interests encourages them to be more invested in their work. Companies that invest in professional development experience higher retention rates, faster recruiting, and improved productivity.
But the tricky part is developing a professional development program that’s universally appealing. A one-size-fits-all approach to professional development won’t be engaging because it can’t adapt to different personality types and learning styles. Platforms such as LinkedIn Learning are expensive and may offer limited options for certain careers or subjects. They also may not be satisfying for your employees who prefer to attend conferences, read books, or take interactive courses.
With Benepass’s Professional Development Account, you can cover a wider range of continuing education needs and preferences. Employees receive stipends in the form of an LSA that they can use for career coaching, exam fees, books, conference tickets, courses at their local university, learning and development apps, or anything else that you decide to cover under your program. Since employees have more freedom over their education, utilization rates are usually much higher than other types of programs.
Employees need comfortable, safe working spaces to be productive and engaged with their work. This means ensuring that your employees have the equipment they need, such as desks, office chairs, monitors, and keyboards. But it could also mean allowing employees to purchase the items that are more personal to them. Maybe some employees feel rejuvenated with a plant sitting at their desk, and others might enjoy a standing desk or under-desk treadmill.
Flexible work from home stipends can help you create the right working conditions for every employee, regardless of what that means individually. With Benepass, Jamf designed a WFH program to help employees build a workspace that makes them feel like their most engaged and productive selves. Employees can use their stipends to purchase items such as computer monitors, keyboards, speakers, headphones, printers and scanners, desks, office chairs, footrests, tea or coffee equipment, under-desk treadmills, and rugs.
Employees have more flexibility to purchase exactly what they need to make working from home more productive. The program also ensures global benefit parity by giving international employees equal access to a comfortable workspace and supportive office tools.
Work-life balance drives employee engagement by helping your employees feel healthy, rested, and more productive. If employees feel satisfied with their work-life balance, they’re less likely to feel resentful and will have more energy to bring to their work. Happy employees are 13% more productive, according to research from Saïd Business School at the University of Oxford. But a quarter of Gen Z employees and 18% of Millennial employees are dissatisfied with their work-life balance, creating an issue that employers need to address.
Employers can promote work-life balance through remote work and flexible work arrangements, and there are also a handful of benefits that can help employees maintain work-life balance. Childcare benefits or food stipends make home life more stress-free so employees have more time to take care of themselves. Some companies are offering employees vacation benefits to encourage them to take time off or home services benefits that employees can use to pay for cleaning services.
Employees with positive coworker relationships are more likely to be highly engaged at work. Building connections in the workplace encourages employees to take more pride in their work, collaborate on projects, and volunteer their time when it’s needed.
But doing this in a remote or hybrid work environment can be tricky. Many companies are getting creative with flexible benefits as a way to foster these relationships. They are using flexible stipends to incentivize get togethers and team bonding. For example, companies can use Benepass to provide flexible funds that teams can use to purchase lunch or tickets to an outing.
Tech company Automox implemented AX Connect, which is designed to foster professional and social connections among employees. A fun feature is built right into Slack called “random coffee” where employees are paired for a physical or virtual coffee date they can pay for with Benepass funds. AX Connect is the most-utilized feature of their perks program with an engagement rate of 49%.
Employee recognition is incredibly important to engagement. Employees who believe they will be recognized are 2.7x more likely to be highly engaged, according to Quantum Workplace research. A SHRM-Globoforce survey found that when companies spend 1% or more of payroll on recognition, 85% notice a positive impact on engagement.
Creating an employee recognition program can have a significant impact on your company culture and employee engagement. Recognition programs can celebrate professional achievements, tenure, or company values. But many companies struggle with low engagement rates because employees are not excited about the rewards that are offered. Many employers offer gift cards, but these can feel impersonal and may not match the employee’s preferences. Other companies provide spot bonuses, which are nice but don’t often feel “special” or celebratory in nature. Employees may not even notice the bonus on their paycheck before it’s spent, or they may feel more pressure to spend it on bills or routine expenses.
Automox designed an Automox Perks program as a way for managers to say thank you to their employees. They established a $200 monthly culture award based on five different company values for employees. At Benepass, we run a quarterly Beneperson of the Month program where employees are nominated by their peers for an exceptional display of our company values and receive a cash award added to their LSA.
“Employees prefer to have money added to Benepass because it’s permission to spend it on something that isn’t utilities or groceries,” said Elspeth Arnold, Manager of People Experience at Automox. “They can spend it on something for themselves.”
Employees want to work for organizations that care about their health and wellness. In fact, 87% of employees consider health and wellness packages when choosing where to work. The benefits of implementing an employee wellness program include healthier employees, stronger company culture, lower rates of turnover, and higher rates of employee engagement.
There are many pillars of wellness that you can support with an employee wellness program. Physical wellness often comes to mind first, but mental wellness, occupational wellness, social wellness, and financial wellness are just as important. Many wellness programs suffer from low engagement rates because they don’t adapt to every employee’s individual wellness needs. With a flexible LSA program, employees can spend funds on gym memberships, massages, cleaning services, childcare, student loan repayment, any anything else the company wants to support.
Leading organizations such as Talkspace are prioritizing wellness programs to meet today’s needs. With Benepass, they launched a modern wellness plan to give their new fully remote workforce the perks they were looking for. Today, employees receive a $50 monthly wellness stipend they can spend on haircuts, nail appointments, Instacart for groceries, incense, candles, gaming, and so much more. The program has a 97% engagement rate, with increased utilization among its international employees.
“I think the mission of Benepass is to prioritize our wellness and our self-care,” said Hallie Griffin, Virtual Office Manager at Talkspace. “And that's just perfectly aligned with who we are.”
Employees who feel that their employer offers mental health support are more likely to feel highly engaged at work. As a key pillar of wellness, mental health has a huge impact on whether employees can bring their best selves to work. If they receive mental health benefits from their employers, chances are they will feel more loyal and connected to the workplace.
Tax-advantaged programs such as flexible spending accounts (FSAs) and health savings accounts (HSAs) can help employees pay for eligible mental health expenses. Eligible costs often include therapy, prescriptions, apps, and acupuncture. Many companies also opt for a health reimbursement arrangement (HRA), which are employer-funded accounts that offer employees money to pay for eligible healthcare expenses. Mental health HRAs provide an avenue for employers to increase access to mental healthcare that employees may otherwise struggle to pay for.
An LSA can also be designed to include mental health support. Mindbody's wellness program offers mental health and mindfulness support, allowing employees to spend funds on therapy and counseling, mental health apps, coaching, relationship therapy, and meditation.
“Benepass allowed us to close the gap between ‘meat and potatoes’ benefits like health insurance and offer a new self-care component,” said Mia Valunte, Benefits Manager.
Employees who have a sense of purpose both in and out of the workplace are stronger teammates and leaders. They bring more meaning and well-rounded perspectives to their work. Companies that foster not only professional development but also personal enrichment understand that employees who feel fulfilled in all aspects of their lives will be more engaged in their roles.
Personal enrichment is often focused on creative hobbies such as art, music, dance, photography, cooking, or writing. Taking the time to pursue interests like these enhances creativity at work and gives your employees with similar interests something to bond over.
The 2023 Benepass Benefits Benchmarking Guide found that 25% of companies are investing in flexible personal enrichment benefits and providing an average of $740 in mostly annual perks. With these funds, companies give their employees freedom to invest in hobbies and creative pursuits that bring purpose and meaning to their days.
Many organizations struggle with employee engagement, but you can improve it by evaluating all aspects of your company’s culture, including benefits and compensation. Want to learn more about creating flexible benefits programs that drive employee engagment? Request a demo or reach out to our team at email@example.com.