Employee engagement: Why it matters and what to do about it

Note: This article was updated in 2026 to align with current Cornerstone writing guidelines and the latest best practices.

The world of work is in unprecedented times. The percentage of employees who are engaged in their work is frighteningly low. In fact, according to Gallup research, global engagement has declined for a second year and to its lowest level since 2020. Behind this statistic are real people just trudging through their workday. It seems a lot of workers are uninspired, deflated and not fulfilling their human potential.

The human cost of disengagement should be enough for executives to investigate and take action. We all spend a lot of time at work and with our colleagues. While competitive salary is important, research indicates that it's not enough to get employees engaged. As the Harvard Business Review observed, "The association between salary and job satisfaction is very weak." Yes, inadequate pay can make employees unhappy. But adequate pay doesn't directly correspond with happiness and engagement.

Aside from the human cost, there are real business consequences to a lack of employee engagement. In fact, according to Gallup, in 2025, “low engagement cost the world economy approximately $10 trillion in lost productivity, or 9% of GDP.” High attrition, for one, can drain a company's human capital and profits. But there is also a clear connection between employee engagement and customer satisfaction.

In your own life as a consumer, when was the last time you had a good experience with a company that had disengaged employees? When most companies try to solve customer satisfaction issues and low net promoter scores, they first think of customer experience (CX) processes and technology. But the best CX programs in the world are useless without an engaged workforce.

So, what can organizations do to improve employee engagement? We’ll dive into the three areas that drive real improvement in employee engagement: technology, leadership, and culture.

Invest in new tech that keeps employees engaged

Of course, technology is important. Employees expect consumer-grade technology in the workplace. Disconnected systems force employees to spend time hunting for answers instead of doing meaningful work. A unified talent management platform that connects learning, performance, and career development gives people one place to grow, track progress, and find new opportunities. When people can see a clear path forward, they're more motivated and engaged at work. Enterprise social networks can also help employees connect. Clearly, good technology and data management is a big factor in employee engagement.

Develop managers who actively raise team engagement

But good technology is not enough. The key to employee engagement is leadership. As Tomas Chamorro-Premuzic writes, "The biggest organizational cause of disengagement is incompetent leadership. Thus, as a manager, it's your personality that will have a significant impact on whether your employees are engaged at work, or not."

The best managers set a clear direction, communicate openly, focus on career growth, and recognize high performance. These are skills anyone can build. Structured leadership development programs help managers learn how to coach, give feedback, and create environments where people do their best work.

Encourage free-thinking to help employees feel heard and trusted

To truly increase employee engagement, it is important to inspire free-thinking across your organization. A company culture based on free-thinking allows employees to speak their minds, and it encourages the C-Suite to match individual worker values to organizational goals. Employees in this atmosphere know that their minds are respected. Employees feel heard, needed and appreciated. In a free-thinking culture, leaders also need practical ways to empower employees with autonomy, trust, and clear decision-making authority.

A free-thinking culture inspires leaders to practice honesty, transparency and a "no bullsh*t" communication style. Even if employees don't always like what you have to say, they'll trust and respect you for giving it to them straight. I've found that direct reports welcome this approach. However, it's not just on the shoulders of executive management to lead with transparency; to achieve a company culture connected to high performance, all people managers must be on the same page.

There is no magic potion to get employees engaged. Building a free-thinking culture arises from every interaction: from interviewing job candidates to counseling employees who are burned out. It is the job of leadership to model this behavior and address situations that damage the culture. So when executives think about employee engagement, the first place they should look is in the mirror.

Get answers to common employee engagement questions so you can act with confidence

What is employee engagement?

Employee engagement is the level of involvement, enthusiasm, and commitment people feel toward their work and their organization. Engaged people feel encouraged and motivated at work because they see meaning in what they do and a future worth building. In practice, that means they take initiative, collaborate more effectively, deliver better customer outcomes, and show resilience under stress or change.

How do you measure employee engagement?

The most common approaches are pulse surveys (short, frequent check-ins), employee Net Promoter Score (eNPS, a single loyalty question tracked over time), and annual engagement surveys benchmarked against industry standards. The most effective organizations combine survey data with performance, learning, and skills analytics to create a multi-signal view.

What are the biggest drivers of employee engagement?

Manager quality is the single largest factor. Beyond that, the top drivers include: career growth opportunities, recognition, learning and development access/mentoring programs, connection (ERGs, team building activities, etc.) and psychological safety.

How can you improve employee engagement?

You can improve engagement by investing in manager development, creating continuous feedback loops, connecting learning to career growth, and acting visibly on the feedback you receive. Technology platforms like Cornerstone help by bringing performance data, learning opportunities, and engagement signals into one connected system.

How does employee engagement affect retention?

Highly engaged teams experience 18–43% lower turnover than disengaged teams, according to Gallup, which makes engagement one of the most cost-effective retention strategies available. People stay when they feel valued, see a path to grow, and trust their leaders.

How does employee engagement impact productivity?

Engaged teams get more done. Top-quartile engaged teams show 18% higher productivity in sales than bottom-quartile teams, according to Gallup's Q12 meta-analysis, so engagement turns directly into measurable output.

What are the 5 Cs of employee engagement?

The 5 Cs give managers a repeatable way to build work cultures where people want to stay and contribute.

• Care – Make people's well-being a visible priority, not just a stated value.

• Connect – Build real relationships and team trust through consistent, honest communication.

• Coach – Give people ongoing feedback so they can grow in their roles.

• Contribute – Help people see the direct impact of their work on team and organizational goals.

• Congratulate – Recognize specific efforts and results, not just tenure or job title.

The five Cs framework gives any people manager a clear, actionable starting point for improving engagement on their team.

What are the top 5 employee engagement activities?

Below are five activities that consistently move the needle on engagement:

• Run regular pulse surveys – Short, frequent check-ins help you catch disengagement before it turns into voluntary attrition.

• Give specific recognition – Tie recognition to concrete contributions, not general effort or time served.

• Expand access to learning – Connecting people to skill-building and career pathways signals that their growth matters to the organization.

• Train managers to communicate openly – Manager quality is the single largest driver of engagement, and transparency is the skill most often missing.

• Create two-way communication channels – People engage more when they know their input reaches leadership and gets a response.

None of these activities require a large budget. Each one addresses a proven driver of engagement and can be introduced at the team level without waiting for an organization-wide initiative.

Customer story: United Airlines builds engagement through learning at scale

United Airlines needed to onboard nearly 20,000 new people while maintaining strict compliance standards across pilots, flight attendants, technicians, and airport staff. By partnering with Cornerstone, United built personalized learning paths powered by AI and immersive technology, and launched a Leadership Institute to develop the next generation of leaders. The result: a more engaged, skilled workforce with clear career growth opportunities at every level.

See how Cornerstone connects learning, skills, and performance data to drive engagement across your organization. Book a demo