Employee engagement has been a buzzword in management circles since the 1990s. However, it started getting widespread attention over the past few years. Especially as the pandemic upended traditional work patterns and record numbers of employees quit their jobs during the Great Resignation. This led to employers, employees, thought leaders and journalists discussing the need for greater engagement to keep workers happy and companies running smoothly.

Around the same time, the term “employee experience” began gaining traction as part of the same conversation. Although sometimes used interchangeably, the two terms refer to distinct concepts that have different impacts on employee satisfaction, productivity and retention.

Employee engagement vs. employee experience

While both are important, engagement is ultimately a byproduct of experience. It’s important that leaders understandd and implement this in that broader context.

What is employee engagement?

Employee engagement is the extent to which an employee commits to their organization and their work — morale, in other words, measured by employee turnover, surveys and ongoing feedback.

Although often confused with perks, incentive programs and team-building activities, true engagement is based on day-to-day activities. It focuses on the emotional and social needs of employees, such as ensuring they are doing work they’re good at, have the right tools to do it well and are able to connect their work with a higher purpose.

In 2022, 32% of employees in the United States were engaged. While that number has been rising steadily since 2000, it has dropped notably from 36% in 2020. Meanwhile, the number of employees who were “actively disengaged” rose from 14% in 2020 to 17% in 2022.

Engagement isn’t just about reducing turnover and making employees happy; a Gallup study found that top-quartile engagement levels were associated with increased productivity, sales and profitability. Meanwhile, bottom-quartile engagement levels are associated with substantially higher levels of absenteeism, theft, accidents and turnover.

Engagement is clearly important, but it’s only one part of the overall employee experience.

What is employee experience?

Employee experience is a more comprehensive concept, of which engagement is just one part. Experience encompasses all aspects of an employee’s experience with a company, from recruitment to exit interview.

Employee experience aims to create an environment where employees can thrive and achieve their full potential. It includes opportunities for growth, development of skills, access to continuing education, ability to innovate and connection to the company’s mission. It also includes benefits, such as flexible work arrangements, work-life balance, health and wellness programs, and other perks that enhance employee satisfaction and well-being.

A positive employee experience leads to higher levels of engagement, job satisfaction and retention — and employees know it. Job seekers are looking for more meaningful work experiences, with over half placing more importance on company culture than on salary.

The right employee experience strategies mean that companies are:

• 2.2x more likely to exceed their financial targets
• 5.1x more likely to engage and retain employees
• 4.3 times more likely to adapt well to change.

But poor employee experience can have a negative impact. In fact, one study found that 15% of job seekers turned down a position because of company culture. Additionally, 30% left a new job within the first 90 days, citing poor company culture, negative experiences and misalignment with their role.

People, not just workers

Employee experience impacts individuals and companies alike. However, many companies still focus on traditional “top-down” engagement programs that tend to miss the mark. While perks and rewards are nice, employees are looking for a more meaningful experience that supports them as people. Increasingly, it’s important that employers take the time to create a positive, holistic experience based on what employees really want.

Want to start creating a better experience for your people? If you would like help assessing your current employee experience and creating a strategy for improvement, please contact us to learn how BPM can help.