Leaders don’t really care about employee engagement. Here’s why

Over the past decade, workplace leaders have preached about the importance of employee engagement. But as a leadership consultant, I have found that very few organizations actually take employee engagement seriously. It’s time leaders admit it.

The moment has come when leaders must stop pretending we care about engagement. Let’s quit asking workers to fill out surveys that everyone knows are insincere, “check-the-box” activities. Instead, leaders should start dedicating resources to not only measuring employee well-being, but actually committing to improving employee well-being.

Research suggests that employee well-being matters more to the success of a business than employee engagement. For instance, Oxford University researchers have determined that how people feel at work is the biggest driver of employee productivity. Consequently, focusing on improving employee well-being will lead to a massive win for employers and employees alike.

Here’s why leaders should start prioritizing worker well-being instead of harping on employee engagement.

Employee engagement hasn’t changed in over a decade

In 2013 I covered Gallup’s massive “State of the American Workplace” study. The researcher’s alarming discovery at the time was that only 30% of U.S. workers were fully engaged in their jobs.

Leaders around the world were alarmed. Gallup’s findings meant that only 3-in-10 people were willing to invest discretionary effort to help their organizations succeed. Through its interviews across the nation, Gallup also found that more than half of workers were doing just enough to collect a paycheck. And nearly 2-in-10 were so unhappy in their jobs, they’d effectively become saboteurs working against their employer’s best interests.

Given how bleak a report card this was for workplaces, one might imagine that major initiatives were launched and engagement scores have since improved. But unfortunately, that’s not what happened. Engagement in America is exactly where it was eleven years ago: just 30%. And globally, engagement is even worse; Gallup estimates that just 21% of employees are engaged.

I would argue that companies learned long ago that they could achieve performance goals without being concerned about employee engagement. This is why leaders should stop focusing on the metric of engagement and instead focus on one that actually matters to companies and to their employees: well-being.

Why engagement never improved

I recently asked a group of leaders why they believed engagement failed to become a meaningful priority in their companies, and the responses were highly consistent. Most stressed that investors never held CEOs accountable for it because other well-established calculus for evaluating organizational performance already existed.

On top of that, employees were generally surveyed no more than twice a year. Results often took months to be distributed to managers and poor scores were never assigned to a specific person to fix. Neither manager performance reviews nor their compensation was ever tied to improving engagement. Ultimately, workers themselves grew to believe the survey process was a complete joke, leading many to conclude their employers really didn’t care about their feelings and concerns at all. Ironically, this perceived indifference led people to becoming even less engaged in their jobs.

Poor well-being is the real threat to organizational performance

I believe organizations today face two significant problems. The first is that chronic employee burnout has become an epidemic which leads to undesired turnover. One study by Deloitte found that 77% of U.S. professionals have experienced burnout at their current job and 91% say that having an unmanageable amount of stress and exhaustion negatively impacts the quality of their work. Separate research shows that 20% of American workers have daily thoughts about quitting their jobs as a result.

The second significant problem facing organizations is that managers are so focused on meeting targets, they’re not effectively supporting their employee’s emotional and psychological needs. A report from employment and labor law company, Littler, found that there’s been a 74% surge in employees requesting leave or accommodations for mental health-related issues over the past year.

This data not only signals that employee well-being is in great peril, it implies leaders must quickly pivot in ways that will not only help employees thrive, but also ensure organizations retain their talent.

Insights from the world’s largest well-being study

Oxford University business school professor, Jan-Emmanuel De Neve, partnered with employment firm Indeed.com, and asked website visitors to anonymously grade their responses to four questions:

1. Do you feel happy most of the time?

2. Are you experiencing negative stress at work?

3. Are you content with your work?

4. Do you find your work to be purposeful and worthwhile?

As of June 2023, an astonishing 15 million people had submitted responses, and the record amount of data led to the important discovery that employee well-being is actually determined by feelings—specifically, how people feel at work, and how they feel about their work.

De Neve determined that what drives employee well-being principally boils down to the culture of their organization, and to how people are managed. Do people feel they have opportunities to learn? Is their diversity and inclusion in the workplace? Are workers paid fairly? Is there trust in the organization?

But, his most unexpected and profound conclusion is that the greatest driver of employee well-being is belonging. This is, a sense that one’s organization, manager and colleagues care about them personally. Meeting worker’s social needs for friendship, connection, and feeling appreciated is what truly elevates well-being.

It’s little surprise that De Neve also discovered that very few workplace leaders today grasp the importance of fostering belonging within their teams. When asked, only 6% rated belonging as a primary driver of employee happiness at work. Just one-third (34%) ranked it among its top five drivers.

How well-being affects productivity

Over a six-month period, De Neve conducted a separate study at a British call center where employees were asked to describe how happy they felt at the end of every work week by choosing one of five emojis: a beaming face, a smiley face, a neutral face, a sad face or an angry face.

He then compared this straightforward feedback to the number of calls people handled, customers satisfaction per call, time spent per call and daily sales. Plus, performance data the organization regularly tracked. De Neve found that weekly productivity was directly related to how workers felt in any week. As an economist, De Neve later proved that traditional financial impacts like return on assets, profits and a firm’s value also have a direct and positive correlation to employee well-being.

Unfortunately, the success of corporate well-being programs to date has been mixed. For instance, De Neve’s colleague, fellow Oxford researcher William Fleming analyzed survey responses from 46,336 workers and found that company-sponsored mental health resources, such as meditation apps, do not have a significant impact on worker wellness. Others have found that investing in worker well-being can improve retention and productivity.

But I would argue that the root causes of failing programs also prove to be the very same issues that derailed efforts to improve employee engagement: no structural change in managerial practices, inconsequential low-level perks provided as a cure-all, and the magical thinking that simply by tracking how people feel will somehow fix every issue.

There are many ways workplace managers can actively help elevate employee well-being. But their first step should be to simply ask people how they can help them flourish at work. This one question is likely to identify many meaningful solutions—and we’re wise to get started immediately.