Small Companies Have More Engaged Employees

The Temkin Group report Employee Engagement Benchmark Study highlighted the connection between employee engagement and both employee productivity and customer experience. But how does the level of employee engagement change by the size of company? We used the Temkin Employee Engagement Index (TEEI) to analyze employee engagement based on the number of employees within companies. Here’s what we found:

Nearly six out of 10 of employees at small companies (those with 10 or less employees) are highly or moderately engaged, well above the level for all other size companies. This engagement level decreases significantly to 45% for companies with 10 to 100 employees and then continues to drop, albeit at at a lesser clip, for larger companies.

The bottom line: Small companies should exploit their higher employee engagement

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I'm an experience (XM) management catalyst; helping organizations improve results by engaging the hearts and minds of their employees, customers, and partners. I enjoy researching and speaking about leading-edge XM topics. I lead the Qualtrics XM Institute, which is the world's best job. We're igniting a global community of XM Professionals who are inspired and empowered to radically improve the human experience. To achieve this goal, my team focuses on thought leadership, training, and community building. My work is driven by a set of fundamental beliefs: 1) Everything starts and ends with human beings, so you need to understand how people think, feel, and behave; 2) XM is a discipline that needs to be woven throughout an organization's entire operating fabric; and 3) Building the XM discipline requires a combination of culture, competency, and technology.

4 thoughts on “Small Companies Have More Engaged Employees”

  1. Very interesting piece of analysis – from 10 employees onwards employees engagement drops dramatically – is it the stage when the founder/owner loses direct contact with each of its employees and therefore there is a big dilution of culture, philosophy etc

  2. I am not surprised. As an HR & Training consultant, I work mainly with small or closely held companies. I find the environments and working relationships encourage and support customer engagement. Often the leadership has strong values regarding customers and this attitude is caught by the employees. Leaders are usually visible and engaged with customers and employees. However, if leaders are only engaged with customers and not with their employees, I find that there is a lessening of customer empathy. Cordially, Ann

  3. Are there metrics available that would allow a larger company to measure the impact on revenue or profitability for each 1% improvement in moderately engaged employees or highly engaged employees?
    Is it practical to put a financial value on improved employee engagement and do many companies measure this?

    1. Some companies are doing that analysis (financial value of employee engagement), but we haven’t written about that or published specific research about that specific analysis at a macro-level yet. In the recent report Employee Engagement Benchmark Study, 2013 we provide a lot of data showing the economic value of employee engagement, but do not calculate the direct financial impact. Keep an eye on my blog over the next several weeks for that type of an analysis.

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