New research shows that employee engagement matters to the bottom line—especially amid economic uncertainty.
Importance of Employee Engagement
Research indicates that organizations that prioritize employee engagement during economic uncertainty perform significantly better financially. In fact, companies with highly engaged employees outperformed the S&P 500 by the end of 2022. Each additional point of engagement reported by employees correlates with an increase of approximately $46,511 in market cap per employee.
Role of Communication in Engagement
Clear communication and well-defined goals are essential for unlocking employee engagement. Employees at highly engaged organizations are 46% more likely to view their companies as strong communicators. In contrast, nearly one in four employees at less engaged organizations are unsure of their focus. Effective communication also plays a crucial role in retention, as employees who feel well-informed are less likely to leave.
Building a Feedback System
A feedback flywheel is a continuous system for gathering and responding to employee feedback, which helps sustain engagement. Organizations with high engagement levels see employees 40% more likely to trust that their feedback will lead to action. By combining employee feedback with behavioral data, companies can create a loop that drives meaningful change and improves processes over time.