An ultimate guide to employee engagement vs. employee satisfaction

Employee engagement, a term used by HR departments to describe how involved and enthusiastic workers are, has become a topic of debate among productivity experts, employers, and employees.

During the first few years of the coronavirus pandemic, employee engagement dipped. Then, through the so-called quiet quitting era of 2022, there was a sense that workers were less engaged than they used to be. In fact, some decision-makers cited low employee engagement as a reason for requiring workers to return to the office. However, most recent data suggests that global employee engagement is now at relatively high levels. Employee satisfaction, which describes how content an individual is with their job, on the other hand, is lagging.

According to Gallup’s most recent employee engagement statistics, global employee engagement currently stands at 23%. And while this may seem like a low percentage, it is actually the highest level of global employee engagement that Gallup has recorded. In the U.S., employee engagement is higher at 33%. Though this is lower than from 2018 to 2020 (when U.S. employee engagement peaked at 36%) it still remains on par with, or above, U.S. employee engagement rates from previous decades.

But employee satisfaction remains low. Whereas 33% of U.S. workers feel engaged in their jobs, only 21% feel satisfied. In February, that satisfaction metric cratered out at 18%.

“Over the past decade, workplace leaders have preached about the importance of employee engagement,” writes leadership consultant Mark Crowley for Fast Company. “Instead, leaders should start dedicating resources to not only measuring employee well-being but actually committing to improving employee well-being.” Crowley points to research suggesting that employee well-being matters more to the success of a business than employee engagement.

Fast Company checked in with career experts and everyday workers to better understand the relationship between employee engagement and satisfaction. And to ask the question: If engagement isn’t the cure for workplace unhappiness, then what is?

Is there really a worker disengagement crisis?

To be clear, worker disengagement is not a made-up myth. A recent McKinsey study found that 53% of employees can be considered at least “mildly disengaged.”

Still, the notion of mass disengagement may be overblown. Bruce Daisley, a former Twitter executive and author of Eat Sleep Work Repeat, questions what employee disengagement looks like. He suggests that much of the disengaged worker narrative is a result of the virtual work era, in which managers see their employees less frequently in the office and are therefore unable to visualize their commitment to work culture.

“Some leaders think that work has become more transactional, that we felt more invested in the way that we were working previously, that we felt more part of a cohesive team, and the migration to working remotely has led to less cohesion,” Daisley says. “I’m not sure I fully buy that.”

Engagement is a fundamentally important metric for tracking worker sentiments. Daisley cites a study done by Harvard professor Prithwiraj Choudhury, which found that workers thrive best when spending 23% to 40% of their time in the office. Employers should want a more fully engaged workforce, Daisley argues, but that shouldn’t be their only desire.

“Effective workplaces do need to develop a sense of community,” Daisley says. “They do need to try to make people feel part of something that is cohesive, that is inclusive. But I don’t think there’s any evidence that we need to do that every day.”

Disengagement is now one of the most common workplace talking points. Many bemoan the trend of “quiet quitting,” where workers put in as minimal effort as possible and divest their commitment toward their jobs. But for all the hubbub, the Gallup engagement indicator remains positive-to-neutral. The worker engagement rates for best-practices workplaces currently sits at 70%, just three points off from its peak of 73%. When Gallup first began collecting data in 2006, that indicator stood at 52%.

Like all surveys, Gallup’s data has limitations. Glassdoor chief economist Aaron Terrazas cautions against using the 2023 indicator as a stand-in for present engagement levels. Given that the survey was collected in 2023, there still could be spillover effects from previous years.

“2021 and 2022 [had] a very strong labor market, before the productivity pushes and before a lot of the big rounds of layoffs,” Terrazas says. “There was a boost in engagement that has eroded in the past year and a half to two years.”

Still, the focus on disengagement may be misguided. Joseph Grenny, cofounder of workplace education platform Crucial Learning, notes that a focus on engagement has led to some unhelpful managerial decisions.

“When employers start to focus too much on engagement, they start looking too much at benefits,” Grenny says. “Do we have a swimming pool? Do we have as many dining rooms as Google does? We start thinking that it’s all about creating a playplace rather than a workplace.”

Employee satisfaction is down

While global employee engagement remains high, satisfaction is down significantly. Among U.S. employees, Gallup found the satisfaction rate sitting between 18% and 21% over the past two years. That’s far off from the employee satisfaction rates of 2012 to 2021, which steadily fluctuated between 26% and 28%.

Engagement may not be the cure-all for workplace happiness once believed. Julia Chesbrough, now a freelance product designer, says she learned this lesson while working as a product designer for Hinge. She says Hinge was a “wonderful place to work” where she felt deeply invested in her team, which was creating a market-disrupting app. It was outside forces that led to her dissatisfaction.

“The more that people started to know what Hinge was, the more I became a relationship therapist without really wanting to,” Chesbrough says. “Then all of these articles started coming out about how bad dating apps have been for dating and how they’ve ruined people’s self-esteem. I took that very personally.”

Chesbrough maintains that dating apps like Hinge have had a net positive effect. Still, while working there, she was overengaged. The workplace went everywhere with her, leading to an imminent sense of burnout.

In this way, Chesbrough is just one example of employees who are highly engaged but still unsatisfied. Daphne Clark, an enterprise customer success manager at Gladly, reports a similar story. At a previous job, she was surrounded by layoffs and forced to take on additional work.

“Because there was the fear of layoffs, I didn’t take time off when I knew that I should have,” Clark says. “It can be hard to stick to those boundaries when you’re in an unhealthy work environment.”

Clark was highly engaged in her workplace, but had a looming sense of burnout, which she says diminished her confidence and ability to focus. She finally took a break after moving to a different company and, after entirely disengaging from the workplace, her joy came back: “I felt refreshed [and] rested. I could think. I felt confident in my role.”

It’s easy to lump engagement and satisfaction together. Indeed, they both measure worker interactions and sentiments around the workplace. Still, an engaged worker simply may not feel all that happy. And this crucial difference impacts how productive an employee can be.

Workplace expert Daisley notes that these two metrics are often foisted upon managers, who are forced to bolster engagement while also keeping satisfaction high. However, managers often do not have the training to handle both. “The job of middle managers has gotten increasingly harder,” Daisley says. “So much of engagement [and] so much of work satisfaction comes from well-trained managers.”

Why are employees unsatisfied?

If not for a lack of engagement, what’s causing the decline in worker satisfaction rates? Experts suggest a variety of sources may be to blame, including labor market conditions, compensation packages, and overwork.

Glassdoor’s Terrazas points to faltering trust of senior leadership as a primary point of contention. According to Harvard Business Review, employees at high-trust companies expressed 29% more satisfaction with their lives.

“Trust in CEOs and senior leadership has eroded more than other dimensions over the past year and a half to two years,” Terrazas says. “There is this gap that is emerging and widening between the senior-most ranks in corporate America and the front lines.”

Communication between lower-level workers and senior management may also be a point of dissatisfaction. An engaged worker can still feel frustrated with how they communicate with their boss. Grenny of Crucial Learnings considers this to be a significant reason for the decline in satisfaction.

“If employers aren’t creating a climate where it’s psychologically safe for people to express their concerns, [those concerns] tend to get bottled up,” Grenny says. “Employers can take a lot of responsibility to build a culture where people are able to express things even when they’re emotionally or politically difficult.”

A key tenet of those who prioritize employee engagement is that work should not be transactional. The theory goes that employees aren’t just there to make a paycheck; they’re invested in the company and its culture. However, research consistently shows that compensation is a significant piece of the satisfaction puzzle. A 2022 Economies report found that increased compensation boosted employee satisfaction, primarily by providing motivation.

“Traditionally, compensation has been described as a dissatisfier, not a satisfier,” Grenny says. “It isn’t until something displeases you, until either you start realizing that you’re unfairly paid compared to somebody inside the organization or someone outside the organization, that you start thinking about it all over again.”

Chesbrough puts it succinctly: “We are working to make money. If people are not being paid what they deserve, they’re not being paid the market rate, then I think it all trickles down from there.”

Then there’s the issue of burnout, something both Chesbrough and Clark pointed to as their primary source of dissatisfaction. Teresa Vozza, an executive coach, worked so hard that she ended up in a hospital emergency room. Now she’s trying to make sure others advocate for themselves in the workplace.

“There are satisfaction basics,” Vozza says. “We forget about things like respectful treatment from management. We forget about the distribution of work and making sure that we’re not . . . lumping all the work onto someone that we know can actually do it and is a high achiever, at the expense of not distributing it evenly among the team.”

These are qualities a well-trained manager can control: opening communication, paying workers fairly, and distributing the work equitably. Other factors of satisfaction, like the labor market conditions, are more difficult to ensure.

“A lot of [decreased job satisfaction] has to do with the uncertainty in the labor market,” Terrazas says. “Big companies doing layoffs—even as layoffs remain low economy-wide—return-to-office mandates, and productivity pushes. These forces are weighing on the stress that a lot of employees are feeling.”

Ultimately, narrowly focusing on employee engagement, rather than the environment that employees must operate in, can come across as an attempt to shift blame onto workers; employees should simply work harder. But by addressing how satisfied employees are, leaders take accountability for creating great environments to work in.