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Talent Management Employee Engagement Employee Experience

Employee Satisfaction vs. Employee Engagement: What's the Difference?

May 9, 2023
5 min read

Employee Engagement Resource Bundle


What’s the difference between employee satisfaction and employee engagement? Though they are related, it’s important to understand these two distinct concepts and what they reveal about your workforce. Satisfaction measures employees’ happiness with what your company offers them, like their salary, work hours, and work environment. Your employees may be highly satisfied, but that doesn’t always mean they’re engaged. 

Employee engagement refers to the deeper connection between people and their work — it’s what sets content and passionate employees apart. Engaged employees feel a sense of fulfillment from their work and are productive and innovative. They’re motivated to do their best and connected to organizational goals. 

There’s a reason we focus on employee engagement so much more — unlike satisfaction, engagement has been linked to performance, which affects business outcomes. But unfortunately, after a decade of increases, engagement among U.S. workers started to decline in 2020 and dropped to 32% in 2022. Employee engagement is too impactful to ignore, but that doesn’t mean job satisfaction doesn’t matter.

What’s the difference between #EmployeeEngagement and #EmployeeSatisfaction? Engagement leads to higher productivity and loyalty — but only 32% of employees are engaged:

Keep reading to understand more about the relationship between employee engagement vs employee satisfaction and how your company can boost engagement. 

What is employee satisfaction?

Employee satisfaction is one part of the many factors that impact employee engagement. It’s a measure of how content or happy an employee is with their job and what comes with it, such as benefits, pay, work environment, work schedule, daily tasks and responsibilities, and even with their colleagues and managers. High job satisfaction means your employees are happy to come to work (or log in to their laptops if you’re remote) and complete their assignments, and they have everything they need to do their jobs. 

Satisfied employees may get along with their coworkers, achieve all of their goals, and fit in with company culture. But that doesn’t mean they’re emotionally invested in their work or in the success of the organization. They aren’t making any discretionary effort or bringing new ideas to the table. While satisfaction matters, it’s engagement that takes businesses from average to cutting-edge.

What is employee engagement?

Employee engagement is a measure of how emotionally committed your employees are to their jobs and to your company. Engaged employees have a sense of ownership and pride in their contributions and are willing to go the extra mile to help the organization succeed. They’re motivated, innovative, enthusiastic, and passionate. Engaged employees are internally driven and find meaning in their work. 

Gallup found that these factors are the main drivers of employee engagement:

  • Purpose
  • Development
  • A focus on employee strengths
  • A caring manager
  • Ongoing conversations

Engaged employees get frequent feedback and support from their managers, and their goals are tailored to their strengths. They’re curious and look for ways to grow, but also work for companies that give them the freedom to pursue what interests them and offer professional development opportunities to their employees. 

Who’s Responsible for Employee Engagement?

Managers are responsible for 70% of the variance in employee engagement, according to Gallup.

Why employee engagement is essential

Employee engagement is required for building a loyal workforce and achieving positive business outcomes long term. As we mentioned earlier, engagement is a reliable predictor of business performance. High levels of engagement correlate with several indicators of success, including higher retention, more productivity, and increased revenue. 

When comparing companies with high and low engagement, those with highly engaged employees showed:

  • 43% less turnover at low-turnover organizations and 18% less turnover at high-turnover organizations
  • 81% less absenteeism
  • 64% fewer safety incidents
  • 10% more customer loyalty
  • 18% higher productivity (in sales)
  • 23% higher profitability

Engagement is also the foundation of employee experience. Engaged employees are less likely to quit, come up with more creative solutions, and produce more work. High engagement sets your employees apart as top talent and sets your business apart from the competition. It’s the difference between a business that’s maintaining and one that’s growing, and it’s critical if you want employees at every level to care about business success. 

#EmployeeEngagement and employee satisfaction aren’t the same — one of these drives business performance and 23% higher profitability:

How to grow employee engagement

An employee may be engaged in their work even if they are not completely satisfied with all aspects of their job. You can address a lack of job satisfaction in a more straightforward manner, often with raises or additional perks, or flexibility in work location or schedule. Engagement is more difficult to cultivate since it requires that emotional connection.

“If you give people challenging and meaningful work and set them up for success, they will reciprocate.” - Dr. Lisa H. Nishii, Cornell University, via Fast Company.

But luckily, there are many proven ways to improve employee engagement

  • Increasing communication and transparency
  • Giving employee recognition and rewards
  • Offering professional development and career growth opportunities
  • Asking for employee feedback and input
  • Using employee engagement software

The use of employee engagement software is already common and on the rise, with the market expected to be worth more than $1.7 billion in 2028. That’s no surprise, given how practical it is for HR teams at companies of all sizes and industries. Software offers a variety of tools and features for measuring employee engagement and creating, managing, and analyzing your strategies. 

Reap the benefits of using employee engagement software with these robust tools:

  • Employee pulse surveys sent automatically get a quarterly read on engagement
  • Employee engagement surveys with pre-built and customizable templates dive deeper into engagement topics, including Diversity, Equity, Inclusion, and Belonging (DEIB) and health and wellness
  • Recognition tools celebrate and appreciate employees’ big wins and big moments
  • Dashboards and reports give HR a birds’-eye view of engagement trends to help uncover workforce insights

Whether you implement or upgrade your software or create an employee engagement program, you need an action plan for increasing employee engagement so your workforce — and your business — can reach their full potential. 

Get started creating or recreating an employee engagement strategy with best practices and tips from ClearCompany with our resource mega bundle, where you’ll find:

  • Ways to show employees appreciation now
  • How to foster engagement 
  • The tech stack you need for your strategy
  • How to get executive buy-in for software investment

Download the Employee Engagement Mega bundle.

Employee Engagement Matters More than Ever. Download the bundle.

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