When it comes to uncovering the factors affecting employee engagement and the cost of disengaged employees, it’s hard to know where to start. What we do know is that lack of engagement at work harms factors like: 

  • Employee well-being
  • Retention
  • Productivity

When even entertainers, athletes, and others working in our childhood dream professions still struggle with mental health and engagement in their careers, how can you reasonably expect your employees to be locked in and engaged at all times?

In short, you can’t — but that doesn’t mean there’s no benefit to identifying the contributing factors that affect employee engagement. That’s why we developed this guide to identify and address core engagement issues. 

But first, let’s explore what employee engagement is. 

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What is employee engagement?

Employee engagement is the extent to which an employee shows enthusiasm and commitment to their job and job-related duties. 

Engaged employees tend to be more invested in their work. This commitment has a positive impact on their mental health, which then positively impacts the business through: 

  • Increased trust
  • Boosts to productivity
  • Improved satisfaction
  • Better retention
  • Increased bottom line 

Now that we understand employee engagement and why making an effort to increase employee engagement can matter, let’s look at the key factors that impact it. 

Key factors influencing employee engagement

There are several key factors affecting employee engagement in the workplace. Understanding and effectively addressing these factors can significantly enhance employee satisfaction, productivity, and overall company performance.

Leadership and management style

Character strengths checklist

(Source: Canva creator)

As one might expect, positive engagement starts at the top. 

Studies show that leadership has a considerable impact on employee engagement. The key to leadership that incentivizes an engaged workforce is to be supportive, transparent, and approachable

That said, overly engaged leaders are well-intentioned but can negatively impact teams and lead to actively disengaged employees. If you think leadership could be your weak point, you’re already on the right track. Good leaders lead by example — and sometimes that means asking experts for leadership help.

Getting leadership right starts with better communication.

Communication and transparency

Higher employee engagement starts with trust and transparency. Establishing these pillars as a core component of your communication style can do wonders for your organization. You can start by:

  • Practicing active listening. It’s crucial to show your team that their voices are valuable. That means making time for employees’ comments, questions, and concerns.
  • Encouraging two-way feedback. If you can critique and provide feedback to employees, ensure they have the right tools to do the same for you.
  • Acknowledging achievements. Words of affirmation go a long way. It’s easy to communicate when you have feedback to give, but don’t forget to share when there is no feedback, and an employee has done a great job. 

That last one is an excellent segue into our next critical factor. 

A sense of purpose and recognition

Remote and in-office teams have made it clear that they don’t want their successes to go unnoticed. Recognition and rewards are becoming increasingly important in the workplace. 

If you’ve come from a culture where excellence is expected and goes without acknowledgment, it may be time to unlearn those habits. Here are a few stats that show how recognition is becoming increasingly important to younger generations: 

  • Millennials. Research shows millennials aren’t asking for raises, perks, or lavish gifts for their hard work. Instead, employer approval is the primary indicator of millennial job satisfaction. Sadly, only 39% of millennials feel their employers do a good job of it.
  • Gen-Z. Like all new kids on the block, Gen-Z is uprooting conventional beliefs about recognition (they’re also a little young for that boy band reference). They’ve caught some heat for needing more praise than prior generations. But if you think they’re too high maintenance, be prepared for them to account for nearly a third of the workforce by 2030.
  • Generation Alpha. Looking further down the road, Generation Alpha is growing up with virtual, instant gratification at their fingertips. However, experts predict they might want more tangible recognition when by the time they enter the workforce. 

Now that you know the importance of recognition, it’s worth exploring some ideas on how to offer and encourage employees. Of course, recognition ultimately needs to amount to career development and growth opportunities.

Career development and growth opportunities

If you’re paying any attention on social media, you’ve probably already heard the jokes about pizza parties and other empty, lifeless attempts at employee recognition. While these acts are often well-intentioned, employees don’t view these as perks that can replace opportunities for advancement. 

Praise only goes so far for employees who regularly go the extra mile. Eventually, you must put your money where your mouth is and provide growth opportunities. That means raises, promotions, and other career advancements. 

Company environment, culture, and values

"Strong collaboration requires a foundation of communication and openness, but you can create comfort with sharing by introducing low-stakes opportunities. HR leaders can do this for company-wide efforts and to build a larger company culture." 

Geoff Whiting
Content Strategy Manager

My colleague Geoff brings up a great point. Developing strong values and a healthy company culture really is pretty low risk. At Hubstaff, we’ve taken straightforward steps to prioritize a positive company culture, including: 

  • Encouraging nonwork-related discussion. We’ve got Slack channels for hobbies, traveling, cooking, music, and TV shows. You name it. You’d be surprised how many people will message their colleagues after hours just to share in life’s simple pleasures.
  • Adding virtual retreats. Getting together for outings can be expensive — or a straight-up rarity for remote teams like us. It costs virtually nothing to have a virtual retreat, though. They’re a great way to get started and eventually grow to in-person events.
Hubstaff 2023 Retreat

One of the most crucial components of a sound company culture is an emphasis on work-life balance. 

Work-life balance

Break, connect, relax

- Take breaks after tasks
- Stretch or move around 
- Enjoy a drink or snack
- Connect with loved ones
- Relax with furry friends

Engaged employees need a culture that embraces moments where we can be, well, disengaged. That may sound like a step backward in the pursuit of crucial deadlines, KPIs, and other outputs, but hear us out.

Allowing teams the freedom to take breaks, walk the dog, or go for a run are all major factors affecting employee engagement in a positive way. After all, burnout is very real and an absolute killer for productivity, retention, and employee experience.

Create a culture that prioritizes your team’s personal life with hours limits, breaks, and other work-life balance staples, and see how your team flourishes. 

Employee wellness and support

We’re biased, but we believe employee wellness and support start with having the right tools. This is especially true for remote teams with much fewer opportunities for face-to-face interaction. 

Fortunately, we are in the business of employee wellness and support. Hubstaff offers employee productivity features with mental health in mind:

  • Stand-ups. Virtual Stand-ups allow managers to create custom update forms that gauge employee work-life balance. Internally, we use questions about stress levels, how employees feel, project roadblocks, and more.
  • Achievement badges. As we learned above, praising achievements is essential to the modern employee. Achievements are also an indicator to check in with that team member. Efficiency, productivity, and hours-based achievements are great opportunities to review workloads and see when someone might need a hand.
  • Insights. Our latest add-on, Insights, provides even greater visibility into employee wellness. You can compare utilization rates, meeting and focus time, apps and URL usage, and more. This helps ensure employees have the opportunities to succeed and stay engaged at work. 
Hubstaff employee wellness features

Employee autonomy and empowerment

An engaged employee is often one who has autonomy over their tasks and projects. Keeping employees involved in strategy discussions and other decision-making processes can foster engagement and retain employees who want to grow in their careers.

Feedback and continuous learning

Opportunities for continuous learning are crucial factors affecting employee engagement and retention. In reality, this concept should also be deeply rooted in your company culture. That starts with you.

Once you’ve committed to personal growth, you can start to put policies in place that help your employees develop new skills, explore their interests, and reach new heights. 


When it comes down to it, there are a lot of things that impact employee engagement. In this post, we got you started with many of the key factors for highly engaged employees. Here’s a quick recap: 

  1. Leadership
  2. Recognition
  3. Career development
  4. Culture
  5. Work-life balance
  6. Employee wellness
  7. Employee autonomy
  8. Continuous learning 

As a shameless plug, our tool can help you improve employee engagement by addressing all eight areas. If you want to learn more about how Hubstaff can help, try a 14-day free trial today.

Have any tips of your own to boost employee morale and keep employees engaged? We’re always looking for tips for improving employee engagement, so share your thoughts in the comments.

Category: Employee Productivity