Dive Brief:

• Organizations are investing $18 billion in employee engagement tools, but the return on their investment is unclear — just 15% of employees worldwide are engaged, according to the Gallup State of the Global Workplace report. In a new study of 1,500 U.S. employees, market research firm Chadwick Martin Bailey, an ITA Group subsidiary, found that five types of psychological benefits drive employee engagement: emotional, functional and personal, social and cultural identity.
• Identity benefits are critical because they highlight the continuing need to "foster employees' self-esteem, pride and sense of belonging," according to the study. By identifying the key psychological benefits, employers can react more strategically and devote resources to engagement programs that will actually work, the study noted.
• "This research shows that companies can't stop at benefits like compensation packages and work/life balance to truly inspire and engage their workforce," Christina Zurek, Insights and Strategy Leader, ITA Group, said in a statement.

Dive Insight:

The results of the study show that the key to employee engagement may be the human connection organizations make with workers. Employees have expressed their need for the “human touch” or psychological fulfillment in studies addressing employer engagement in social causes, meaningful work opportunities and fairness in the workplace. Managers who don't understand the importance of empathy are more likely to drive workers away.

Erica Carranza, Ph.D. (Princeton University), CMB VP of Consumer Psychology and co-author of the research study, said in a statement that the research findings support what social science concludes about the things that motivate behavior: "Employees across tenure, level and role are motivated by the psychological benefits we identified in this research — and the companies with programs in place to deliver these benefits will reap the rewards of a dedicated workforce."

Fulfillment is the new standard for employee engagement, according to a separate PwC report. The results showed that the hallmark of a positive employee experience is a sense of belonging, progress toward a goal and personal growth. These days, benefits such as higher pay, wellness programs and work-life balance may not be enough to engage employees without also nurturing their emotional centers — hence the rise of holistic wellness and generally more well-rounded approaches to employee engagement.

Flexible work arrangements are one way that employers are seeking to balance an employee's work and life needs. Nearly 100% of respondents to a recent Flexjobs survey said flexible work options could help them with their mental health issues and 81% of respondents thought a flexible job would help them be a better spouse, partner, or significant other. A focus on employee development can pay dividends in engagement and retention, too.