Why Employee Engagement Might Just Be Your Best Investment in 2025

Employees are the lifeblood of any organization, but how do you keep them motivated, engaged and enthusiastic in the workplace? Research shows highly engaged employees make a huge difference to overall company performance, so HR teams need to ensure they have strategies in place to keep employees engaged.

By Lucy Adler

Jan 30, 2025

Key Benefits of Employee Engagement

Engaged employees are those that care about the company they work for, are more driven to perform for the greater good, and committed to both their work and workplace. In 2025, where AI, automation and efficiency are king, those high performing, highly engaged employees can really move the dial on the things that matter most. So, what do highly engaged employees bring to the table?

Increased productivity and profitability

Highly engaged workforces demonstrate significant improvements in productivity and profitability. According to a recent workforce report¹, companies with high employee engagement are 23% more profitable and show 18% higher sales productivity levels compared to their less engaged counterparts.

Enhanced customer loyalty and satisfaction

Engaged employees directly impact customer experiences. Those that are customer-facing report a 10% increase in customer loyalty and engagement if their teams are engaged. Customers can quickly sense the energy, passion, and enthusiasm of a vendor who genuinely believes in their work compared to someone who is simply going through the motions.

The economic impact of disengagement indicates that low engagement costs the global economy approximately $8.9 trillion, accounting for 9% of global GDP¹.

Improved employee retention, with reduced absenteeism

Engagement significantly influences employee retention and attendance. Engaged employees are 31% more likely to stay with their companies and 31% more likely to exceed expectations.² As talent shortages remain prevalent in many industries, and the cost of hiring and upskilling increases, retaining employees is already a key priority for many organizations this year, and engagement can play a major factor in this.

Strategies to Foster Employee Engagement

Understand motivations

By understanding what drives your workforce to perform, you can design and develop the right processes to match these motivations to team and organizational goals. This will help engage talent to get rewarded and recognized in areas that matter to them. Understanding motivations can inform decisions across the entire employee lifecycle, from hiring to succession planning.

Focus on managers

A manager can account for 70% of variance in engagement scores, and when managers are engaged, employees are more likely to be engaged. Historically we have heard skills attributed to good people managers as “soft” skills. Today we are now able to quantify and measure skills such as ‘fosters team cohesion’ or ‘makes difficult decisions’ which form an equally important part of the overall skillset of a manager, alongside technical capability. As anyone with experience of a poor manager will know, promoting solely on technical skills can often leave a huge gap in the manager skillset. Having the right tools in place to get a comprehensive view of skills and behaviors can ensure you hire and develop the right managers and leaders that can boost team engagement.

Develop your talent

7 in 10 people say learning improves their sense of connection to the organization. Auditing the existing skills of your talent, finding skills gaps and skills strengths is just the start. With this data, you can invest in the right skills development tools and resources to empower employees to drive their own learning journeys.

HR leaders drive internal mobility—development alone is not enough. Employees want to see career progression and be recognized for development. Mapping career pathways and making internal mobility across departments simple can show how you value your talent and are helping make them realize their potential. This will engage and motivate them to stay for longer and be advocates for the organization.

Measuring and Maintaining Engagement

To ensure the effectiveness of engagement strategies, it's crucial to regularly measure and assess engagement levels. Conducting periodic surveys, analyzing productivity metrics, and monitoring turnover rates can provide valuable insights into the impact of engagement initiatives.

As we navigate through 2025, the importance of employee engagement cannot be overstated. Engagement translates into tangible behaviors that benefit organizations. By implementing these strategies and focusing on creating a positive work environment, organizations can reap the numerous benefits of a highly engaged workforce, including increased productivity, employee retention and better customer satisfaction.

Learn more about how SHL can scientifically identify the skills of your individuals, teams, departments, and entire organization to help drive engagement with a data-driven approach to upskilling, reskilling, development and mobility.

References:

¹https://www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx

²https://www.gartner.com/en/newsroom/press-releases/2023-10-24-rhr-gartner-hr-research-finds-only-31-percent-of-employees-report-they-are-engaged

Lucy has worked in inclusion and diversity for the last 10 years. Prior to joining SHL, she led the inclusion agenda for the Commercial Banking division of Lloyds Banking Group. She is passionate about making a difference for colleagues, and the benefits that a truly inclusive organization can bring. Outside of work, Lucy is supporting her local parish council to design more accessible and inclusive play areas, based on her experience with her son Vincenzo, who is disabled. Lucy is also a mom to Connie and the chairwoman of her local netball team.