Why is employee engagement important?

Employee engagement isn't just a buzzword; it offers tangible business benefits. Put simply, engaged employees are more likely to care about doing a great job and less likely to call in sick. Gallup found that employee engagement was a better indicator of a positive work culture than individual job satisfaction.

When you work to improve employee engagement, you reduce absenteeism, employee turnover, and burnout. You'll benefit from a more productive workforce that works to increase customer satisfaction and achieves your business goals. Engaged employees demonstrate better employee morale, are more creative, and are less likely to cause workplace accidents. 

Improving employee engagement involves a range of measures, including good management and encouraging employees to work independently. High levels of autonomy lead to greater job satisfaction and employee engagement. When leaders communicate effectively about the company culture and goals, they encourage employees to engage with something bigger than themselves.

In short, working to improve employee engagement is a sound business strategy.

Measuring employee engagement

Measuring employee engagement gives you insights into whether you have an engaged workforce or employees working on autopilot. These insights let you build an employee engagement strategy and measure its performance over time. 

The first step in measuring employee engagement is determining which key performance indicators you will use. High employee turnover and absence levels can indicate low employee engagement but also suggest that employees struggle with heavy workloads or increased stress. Analysing team performance against targets can also provide a helpful benchmark.

Measuring employee engagement against company values, particularly those related to how you treat your team, can be helpful. You can improve employee engagement by communicating clearly and directly with your employees. Engaged employees experience high levels of autonomy and a sense of accomplishment, have opportunities for personal growth and feel that their employer appreciates their efforts. You may already have appropriate strategies in place. However, employee engagement depends on perception. Your manager may believe they've offered sufficient praise to their team for hitting their annual target, but their employees may have a different view.

Engaged employees typically have positive relationships with their managers and colleagues and feel part of a collaborative work environment.

You can measure employee engagement via annual surveys, shorter 'pulse' surveys that take a snapshot of employee engagement, or a combination of both. One-on-one conversations with employees provide individual feedback, but it's vital your employees can speak freely without fear of judgment. When staff leave, exit interviews provide helpful information; however, if employees are already going, you've probably left it too late. Instead, talk to highly engaged employees and ask them why they stay. This approach can help you identify areas for improvement, including a strategy to increase employee engagement in the rest of the workforce.

How can employee benefits increase engagement?

Highly engaged employees enjoy their work and feel valued as part of the team. Your company culture can influence employee engagement levels, with your employee benefits package playing a vital role.

Here are a few of the benefits which can improve employee engagement.

Employee health insurance

Group health insurance is a valuable employee benefit that can improve staff retention and help you attract new employees in its own right. One of the benefits of employee engagement is that it helps reduce absenteeism and increases staff well-being. Providing employees with health insurance as part of their benefits package supports their health goals and gives them practical help when they need medical care.

Access to private healthcare

Business health insurance gives your employees access to high-quality private healthcare when needed. One of the main benefits is that private treatment is typically available much more quickly than current NHS waiting lists allow, meaning a shorter absence from work and less disruption to team performance. This can also benefit your employees as they can maintain positive relationships with their colleagues, which is crucial to employee engagement.

Depending on your chosen policy's coverage, your employees can choose their hospital and consultant and stay in a private room with hotel-style facilities.

Private health insurance includes other benefits allowing employees to attend to their healthcare needs around their other commitments. For example, most health insurers provide a 24/7 virtual GP service with telephone or online video appointments, which are ideal for straightforward health issues. These services can provide referrals for further treatment or issue a private prescription. It means that staff don't need to take time off work to arrange a GP appointment.

Health insurance typically includes access to telephone helplines and online resources for general advice or self-help.

Health checks

Routine health checks can detect early signs of potential health issues and empower employees to take responsibility for improving their health. Most business health insurance includes some form of employee health monitoring, either as a standard part of the policy or as an optional extra. 

Your health insurance may include a standard health assessment for every employee, taking baseline measurements for various health metrics. This lets employees set their health goals, and the scheme then provides ongoing support and accountability. Healthier employees are also more engaged employees as they typically have more energy and lower burnout rates, meaning fewer absences, more productive staff and better business outcomes. Some health insurers reward health improvements with reduced premiums and other benefits. Vitality's health insurance prioritises good health and rewards customers who hit their healthy living targets with more perks and discounts, so you and your employees benefit.

Some insurers offer different health assessments based on employees' circumstances and business needs. A basic health check will measure key health metrics, or you can choose from several enhanced checks, which may include a fitness test, cholesterol profile, and cancer screening.

Health insurance can also cover routine healthcare and check-ups such as dental treatment and eye tests. These regular checks can identify the early signs of potential health issues. If you already pay for eye tests for staff who use display screen equipment, adding optical cover to your policy can be a cost-effective way to fund this.

Member reward schemes

Most health insurers have a reward scheme for their members that provides perks and discounts. This can form part of your employee engagement strategy, demonstrating your commitment to looking after your employees and helping them save money. 

Individual schemes differ, but most offer discounted gym memberships, reduced rates on holidays and spa days, two-for-one cinema tickets and free treats such as a weekly coffee. Some provide a range of wellness benefits with discounts on fitness-tracking technology, training programs or stop-smoking support. There are also resources to help employees improve their mental health, such as meditation and mindfulness apps.

We've mentioned employee health assessments. However, some policies include discounted health assessments, allowing your staff to book health checks tailored to their needs in addition to those your company provides.

Employee assistance programs

Employee assistance programs can form a valuable part of your employee engagement strategy. They provide confidential, third-party assistance to your staff and support employee engagement in various ways. Most employee assistance programs (EAPs) focus on mental health and enable staff to talk about any worries in confidence. This can be particularly beneficial if employees experience work-related stress, as they can speak freely without worrying about how workplace issues will impact their careers. Some EAPs also provide access to legal and financial advice, which can improve employee engagement by ensuring staff can seek prompt support for issues which may cause them stress in their lives outside work.

Depending on your chosen policy, your business health insurance may include an EAP as part of its core coverage. Alternatively, you may be able to add one as an optional extra. EAPs are also available as a standalone service. Whichever you choose, you must communicate with your staff to ensure they know that the service is available and what it offers.

Workplace wellness initiatives

Workplace well-being positively impacts employee engagement in several ways, and including wellness initiatives in your strategy increases the benefits of employee engagement. Workplace wellness initiatives aim to help your team improve their health and can include various activities, such as health education, cooking demonstrations, and physical exercise. If you've invested in employee health insurance with health monitoring, your insurer can provide anonymised data insights showing common areas of concern so you can focus on those first. Some health insurance providers can also help you develop suitable wellness initiatives.

Gallup found that well-being can impact employee engagement in surprising ways. Engaged employees who thrive in their personal lives were typically more highly engaged than engaged employees who were less fulfilled outside work or had a poor work-life balance. Even if you already have engaged employees, supporting their health and well-being outside work can improve this.

Workplace wellness initiatives have other benefits, such as improved workplace relationships. Team-building activities help employees get to know each other and offer peer support alongside improved employee engagement.

Flexible working

Flexible work arrangements can improve employee engagement by allowing employees to structure their work around other commitments and improve their work-life balance. Staff with caring responsibilities can work flexibly to accommodate these. For example, employees with children can come to work later or leave earlier to do the school run. Workers caring for elderly relatives may benefit from working at home to be closer to their loved ones in case of emergency.

When considering what flexible working arrangements to offer, you must carefully consider the pros and cons. While flexible working can support increased employee engagement, there are downsides, and your overall focus should be on creating a positive work culture.

Working from home

Working from home can help employees create a better work-life balance. However, good planning is vital, as working from home can negatively impact employee engagement and lead to isolation if it is poorly done.

Working from home can be valuable to employees who find the work environment stressful or need to focus on a particular task. For example, while open-plan offices may be ideal for team collaboration, they can come with increased noise levels. Allowing staff to work at home on specific tasks can be part of the solution. Staff with mental health issues can also get respite in their home environment. However, this increases the risk of isolation and can prevent them from forming positive relationships with their colleagues. A mixture of home and office-based work can help prevent this.

Working from home can enable staff to structure their day around other commitments, such as going out shopping for an elderly relative or picking the children up from school. However, overlapping commitments can reduce productivity and increase stress. There can be an expectation that the person working from home also completes domestic tasks and cares for children when they get home from school. A separate and clearly defined workspace away from shared areas can reduce distractions, so you must discuss this with an employee when they ask to work from home.

We've mentioned that high levels of autonomy lead to increased job satisfaction and greater employee engagement. Working from home lets staff plan their work and working hours to suit their needs. However, they may be tempted to work longer hours than usual simply because their work is more easily accessible, creating a risk of burnout. You should emphasise the need for a good balance between home and work to ensure employees don't work overly long hours.

Flexible hours

Flexible hours enable employees to shift their working hours around their other commitments or to meet their needs. They can support greater employee engagement as they show staff that you care about their lives outside work. They can also encourage employees to take responsibility for their workload, bringing increased autonomy.

Flexible hours can allow employees to take their children to school before coming to work or leave early to pick them up. An extended lunch break or occasional changes to an employee's start or finish time can enable them to take a relative to a hospital appointment. Shifting the working day can also allow your team to avoid a stressful commute.

Flexible hours can be a permanent or occasional arrangement. Some staff may prefer to have fixed hours even if these are outside a standard 9-5. This is ideal if their commitments outside work are relatively predictable. As an employer, you may need to ensure that adequate cover is available for critical tasks or each shift. In those circumstances, fixed planned hours are likely essential.

However, you may be able to offer a greater degree of flexibility in each employee's working hours. Many employers now offer flexible working with core hours so you can be sure that every employee is at work between those times. Timesheets ensure that each employee works their contracted hours, but other metrics which monitor productivity can also be helpful.

Annual leave

A generous annual leave allowance is good for employee engagement as it enables staff to create a good work-life balance and can help to prevent burnout by giving them time to rest or find time for activities they enjoy. 

You can take various approaches to determine what annual leave allowance to provide. All full-time workers in the UK are entitled to 28 days of annual leave each year by law. However, you can increase employees' holiday allowances based on their length of service. Some companies have introduced unlimited paid leave. This can boost employee engagement by showing employees you trust them to determine the amount of leave they need and when to take it. Whilst this could lead to staff taking more holiday than your business can support, the reverse is typically the case. Kickstarter discontinued its unlimited annual leave policy as staff took less leave and experienced burnout. Introducing a specified limit created certainty around how much leave was acceptable and encouraged employees to use their allowance.

You can also offer other days off, such as birthdays, or decide to close the office between Christmas and New Year. Mental health days allow staff to take leave at short notice to manage stress. These can be beneficial but may also worsen symptoms or be used to avoid raising issues at work, meaning managers can't tackle underlying problems.

Death in service benefits

Death-in-service benefits give your employees peace of mind, knowing their family will have financial security when they're gone. They also show your employees you're willing to invest in their family's future, even when they're not around, which is great for employee engagement. As benefits only pay out to current employees, they can improve employee retention.

You can invest in a group life insurance policy that pays an employee's nominated beneficiaries a lump sum when they die. The payout is a multiple of each employee's current salary. Relevant life cover also works like group life insurance but doesn't count towards an employee's lifetime pension allowance. This allowance has been discontinued but used to limit the pension and life insurance benefits an employee could receive without paying additional tax.

Generous pension contributions

Your company pension plan impacts employee engagement similarly to death-in-service benefits, showing your employees that you're willing to invest in their future when they're no longer employees. A company pension scheme with auto-enrolment is now a legal requirement, so you can demonstrate your commitment to your employees by offering generous pension contributions. Pension contribution matching is the ideal approach, where you match your employee's pension contributions up to a specified level.

Sick pay

Paid sick leave can reduce employees' stress if they're absent from work due to ill health, as it ensures their bills are covered. This works well in combination with employee health insurance, which provides quick access to medical treatment and can shorten absences from work.

You can increase the amount of paid sick leave your business offers employees without overextending your company finances by investing in income protection insurance, critical illness cover, or both. Group income protection works similarly to other group policies in that it covers your entire workforce. It pays a monthly income to an employee during their absence equivalent to up to 80% of their usual salary.

Critical illness insurance pays a lump sum to employees diagnosed with a serious illness specified in the policy. It can help with adaptations to their homes if the disease causes a disability or covers funeral expenses in the event of a terminal illness.

Get in touch

Globacare is a regulated insurance broker. We help businesses across the UK find the right health insurance for their team. Contact us for a comparison quote and tailored advice.

Fabio Peixoto
Senior Broker & SME Expert

Fabio Peixoto

Fabio is a senior health and life insurance broker with stacks of knowledge to share. He has over five years of experience and has held senior positions in other brokerages.

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