In today’s fast-changing workplace, employers are facing an alarming challenge—employee engagement is slipping, and the costs of disengagement are rising. While many business leaders assume that their employees are content, the reality is that job satisfaction does not always translate to engagement…and disengaged employees come with a hefty price tag.

According to Gallup research, organizations with highly engaged employees see a 21% increase in profitability and a 17% boost in productivity¹. On the flipside, the cost is steep for companies failing to engage their workforce - turnover, lost productivity, and decreased customer satisfaction.

So, what’s driving engagement—and what’s pushing employees out the door?

Why Employees Are Walking Away

Growing research points to six key factors that determine whether employees stay loyal to a company - or look elsewhere.

1. Lack of Growth Opportunities – Providing learning opportunities has become the number one strategy for employee retention, with 90% of organizations expressing concern about retaining their employees according to LinkedIn’s Workplace Learning Report². Employees want clear career paths, ongoing training, and mentorship.
2. Poor Management – Gallup reports that 70% of employee disengagement is directly tied to their manager³. An underperforming boss can drive even the most dedicated worker to leave, while strong leadership fosters retention and performance.
3. Toxic Work Cultures – A negative work environment is one of the fastest ways to lose top talent. Organizations with a strong, positive culture have significantly higher engagement and retention rates.
4. Lack of Work-Life Balance – The pandemic reshaped workplace expectations, and employees now rank work-life balance, which includes workload, as a top priority. Most workers said they consider schedule flexibility a key factor in job satisfaction.
5. Insufficient Compensation & Benefits – Competitive pay matters. Many employees who feel underpaid are actively searching for new jobs. Offering fair wages and strong benefits is no longer optional, it’s essential.
6. Feeling Unappreciated – Employees who feel undervalued are five times more likely to leave, according to Gallup. Recognition—whether it’s a simple mahalo or a structured rewards program—plays a critical role in employee loyalty.
   
   

How Companies Can Reverse the Trend

The good news? Employers can act today to boost engagement and keep their workforce motivated.

• Conduct Stay Interviews: Instead of waiting for an exit interview, companies should proactively ask employees what keeps them motivated—and what might cause them to leave. Questions like “What do you enjoy most about your job?” and “Do you feel recognized for your contributions?” can provide valuable insights.
• Commit to Career Development: People want to grow. Offering career pathing, mentorship, tuition assistance, and/or leadership training can increase retention and engagement.
• Recognize and Reward Employees: Recognition isn’t just a feel-good strategy—it has a measurable impact. Employers should prioritize authentic, meaningful appreciation and recognition to reinforce employee value.
• Foster a Positive Work Culture: Employees need to feel connected to their organization’s mission and values. Creating a supportive environment improves engagement and overall job satisfaction.
• Ensure Competitive Compensation & Benefits: In today’s job market, fair pay and benefits are non-negotiable. Employers must regularly assess their compensation structures to stay competitive.
  
  

Is Your Workforce Engaged? Find Out

The data is clear—engaged employees drive business success. But the only way to truly understand your workforce is to measure it. That’s why we’ll soon be inviting HEC members to participate in our upcoming Hawaii Employers Council’s Annual Employee Engagement Survey, a free member benefit designed to help organizations gauge employee engagement and identify areas for improvement. Registration info and FAQs are coming later this month. Read about "The New Rules of Engagement" in this article from Hawaii Business Magazine featuring Tracie Foglia.

Join us for The Engagement Playbook: Strategies for Retaining the Right Talent on June 3, 2025. In this ETF-approved webinar, you'll learn practical strategies to boost engagement, reduce turnover, and build a workplace where your best people choose to stay. Click here to register.

¹Gallup. How to Improve Employee Engagement in the Workplace. 2020
²LinkedIn Learning. 2024 Workplace Learning Report: Building the Agile Workforce. LinkedIn, 2024
³Gallup. Engage Your Frontline Managers to Engage Your Employees. Gallup, 2022