Employee Engagement vs. Employee Experience: What’s the Difference & Why it Matters


Employee engagement, workplace culture, employee experience… these are popular captions that show up frequently in conversations about the current and future state of work. Especially given how the pandemic has radically shifted our work world, they’re important topics to talk about.

We hear these words a lot (I mean, I write about them all the time!), but what do they really mean? What’s the difference between them? And why the heck does it even matter?

I’m going to breakdown the differences between employee engagement and employee experience. While connected, these concepts are different. If you are a leader or manager who cares about results, growth, or retention—you need to pay attention. And if you are an employee, you also need to understand these concepts to know what to look out for in a workplace.

We’re going to look at the two concepts in further detail, but I’ll start with the simple definition: Employee experience happens to you; Engagement is within you. Experience is the journey and engagement is the destination.

Employee experience: What it’s all about

Employee experience (EX): the journey. It captures all the things an employer can do to create a workplace that attracts and retains talents. It’s a broad category that includes all the touch points between employee and employer. Here are some areas that impact EX:

  • Pre-hiring phase: Researching a company and the application process.
  • Hiring, pre-onboarding, and onboarding process.
  • The workplace, colleagues, technology, and resources.
  • Work, projects, and responsibilities.
  • Training opportunities and communication.
  • Recognition, incentives, and awards.

The employee experience can be broken down into smaller areas, like those listed. However, the primary reason to look at them individually is to see where leadership should invest time, energy, and resources to improve. To do this, leaders may want to:

  • Collect feedback from employees to determine areas for change and growth.
  • Invest in professional development or training.
  • Implement mentorship programs to develop employees.
  • Complete market research to learn what other high-performing companies are doing.

Like any project, the best way to approach it is to break in down into smaller focus areas. This report by McKinsey organises EX into three broad categories: Social Experience (people, teamwork, socialisation), Work Experience (organisation, control, flexibility, growth), and Organization experience (purpose, technology, environment). By breaking it down like this, companies can take a systematic approach to improving EX.

While it’s helpful to look at different areas, the overall employee experience is most important. A company that is very good at, say, onboarding, but lacks in other areas, is unlikely to retain good employees. Thus, leadership should be concerned with overall employee experience and how it’s impacting each person they employ.

Employee engagement: What it means

If EX is about what the employer does, then employee engagement is about how an employee feels. Do they like their job? Are they productive, focused, and energized with work? What about relationships between colleagues—strong or room for improvement?

Some characteristics of an engaged employee include:

  • Connected to the company, culture, and purpose.
  • Strong relationships with colleagues and general sense of teamwork and collaboration.
  • Intrinsically driven with a desire to grow and learn.
  • Focused, motivated, and interested in their work.

An engaged employee, quite simply, likes their job. They’re engaged in the work and engaged in the workplace. It’s somewhere they want to be and has a sense of belonging and the best part… Engaged employees find meaning in the work they do and they connect it to their own sense of purpose.

Employee engagement is, of course, desirable for all workers. But beyond the personal benefits, employee engagement is highly valuable for company success and performance. Engaged employees tend to perform better, stay longer in a company, and be more creative and driven in their work.

Putting it together: Why it matters

A good employee experience is a step toward employee engagement. Bad experiences drive employees away cutting short the time it takes for them to connect to the purpose of the work. A string of good employee experiences shared by all employees is the core ingredient to a good culture — So things like branding, values, processes, policies, norms and strategies from leadership matter— Done with purpose and coordination will help foster employee engagement. And employee engagement is the end goal.

Studies show that employee engagement has massive benefits for companies. High employee engagement is connected to:

  • Decreased turnover and higher employee retention. Gallup’s study found that there was up to 43% lower turnover in companies where employees reported being engaged.
  • Better customer satisfaction. Engaged employees care about their jobs and will, therefore, provide better service. Glassdoor research indicates that a 1-point increase in the Glassdoor company rating (measuring employee engagement) equals a 1.3-point increase in customer satisfaction.
  • Improved safety and security. The Harvard Business Review reported that businesses that had high engagement scores had 48% fewer safety incidents and 41% fewer quality incidents.
  • Higher profitability. Engaged employees will earn more money for their company; there is a 21% increase in profitability correlated to highly engaged business units, as reported by Gallup.

These reasons are the “business case” for why employee engagement is important. But there’s also a “personal case”: we all deserve to work somewhere we are engaged in our work (regardless of the work) and valued for our contributions.

Employees are waking up to this fact. Given the rise of remote work during the pandemic, employees are realising that they have options. They are no longer location-dependent and can seek out workplaces that give them the employee experience they’re looking for. This is one of the driving factors of the Great Resignation and a reason leaders need to wake up and pay attention to employee engagement.

To sum it all up: Employee experience is made up of actions and environmental factors, controlled by the employer. A good overall EX will Set the stage to produce employee engagement, which is when staff enjoy their work and feel valued at the workplace. This all matters because strong employee engagement is better for people and better for businesses and customers. In a time of great uncertainty, the need for strong employee engagement remains constant and important.


By Luke Jamieson

Keywords: Customer Experience, Diversity and Inclusion, Future of Work

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