The Data Behind Employee Engagement: Why People Power Performance

In this episode of The Herbein Conversation Podcast, host Hannah Kubik is joined by Scott Smith, Director of Client Services in Herbein’s Human Capital & HR Consulting practice.

Building on his recent blog, Employee Engagement Data and Value Creation: Lessons from Moneyball, Scott dives deeper into why employee engagement is more critical than ever, and how organizations can use validated, benchmarked data to understand, measure, and improve it.

From Gallup’s 2025 State of the Global Workplace findings to Herbein’s own recognition as a 2025 Top Workplace, this conversation explores what truly drives engagement today, how it connects to business value, and how companies can take meaningful action.

Hannah Kubik: Hello and welcome to another episode of The Herbein Conversation podcast, where we dive into some of the most pressing issues impacting the modern workplace.

I'm your host, Hannah Kubik, and today I'm joined by Scott Smith, Director of Client Services in our Human Capital and HR Consulting practice.

Today's topic of a discussion is employee engagement and why it's more critical than ever for organizations to understand what drives it, how to measure it, and how to use data to strengthen it. With engagement rates dropping globally, especially among younger workers, companies that don't take action risk falling behind in the race for talent.

We'll talk about the latest finding from Gallup's 2025 state of the Global Workplace report, draw some surprising lessons from Moneyball and share how Herbein is putting engagement into practice.

Scott, welcome to the show.

Scott G. Smith: Thank you, Hannah. I'm excited to dig into this.

Hannah Kubik: So let's kick things off with your blog. You connect the idea of using data to make better decisions about people to Moneyball, which for those who don't know, is the baseball story made famous by Billy Beane. Can you give our listeners the quick version of that analogy and how it applies to today's workplace?

Scott G. Smith: Sure in Moneyball, Billy Beane used overlooked data to build a winning team on a tight budget. He didn't rely on his gut instinct. He relied on predictive metrics and that's exactly what we're finding to advocate for in the workplace.

Too many companies still rely on lagging metrics and lagging indicators…things like turnover or anecdotal feedback. But when you use validated benchmarked employee sentiment data, you can uncover leading insights that drive real business value.

Hannah Kubik: And that's not just theory. JP Morgan and Irrational Capital have shown that companies with strong human capital practices actually outperform the market, right?

Scott G. Smith: Exactly, Hannah. An organization called Irrational Capital has developed a Human Capital Factor (HCF) and it's based on over 70 million employee survey responses. Companies with high scores on this factor consistently outperform the MSCI USA index. And just to clarify, that index is a widely used benchmark that tracks the performance of about 600 of the largest, and most influential publicly traded companies in the US across all major industries. So, it's really a nice scorecard for the US stock market.

Hannah Kubik: So beating that benchmark is a strong signal of exceptional performance, is that right?

Scott G. Smith: Right and it's and it's interesting that it's not the extrinsic stuff like pay or perks that drives the out performance in this study. It's the intrinsic factors, things like alignment with purpose, trust in leadership, growth opportunities and operational effectiveness are the drivers.

Hannah Kubik: Right. And that really reinforces your blog's message that engagement is a strategic lever and yet the latest Gallup data paints a concerning picture. It shows that US engagement has dropped to a 10 year low with only 33% of employees engaged and 17% actively disengaged. That's a huge productivity drag.

Scott G. Smith: Yes, it sure is. Gallup found that engagement dropped the most among young workers and managers – particularly managers under 35 – so 5-point decline, and female managers experienced a 7-point drop. And the issue is that managers are influencing about 70% of the team's engagement. So, that's a big red flag when managers are struggling as it often leads to disengagement across their teams, and that can ripple through the entire organization.

Also, Herbein has a partnership with Energage who runs the Top Workplace program, and their 2025 Q1 report shows a similar drop. In 2021, 79% of employees said they had a good experience at work. In 2025, that number went down to 77%.

Both Gallup and Energage measure engagement, but they measure in different ways, and they ask different questions, so their numbers aren't quite the same. But both show that fewer people are feeling connected at work. And research from JP Morgan and Irrational Capital that I referenced earlier, shows that when engagement goes down, business performance follows.

Hannah Kubik: Super interesting. And just to clarify that relationship or how to think of Gallup and Energage, Gallup gives a national snapshot of the challenge and Energage shows us what's possible when organizations commit to building a great workplace…and Herbein is a great example of doing that well. We were recently named a 2025 Top Workplace by the Philadelphia Inquirer based entirely on employee feedback collected through the Energage platform.

Scott G. Smith: Exactly. We use the same tools that we're recommending to our clients.
We measure sentiment. We analyze the data from our employee sentiment and proactively take action on that data. It's helped us to build a culture where people are feeling heard, supported and empowered, and that's showing up in our performance.

Hannah Kubik: So, Scott, what should leaders focus on if they want to improve, engagement and drive value?

Scott G. Smith: They really need to start by asking the right questions, so that begins with first you need to make sure you have the basics right. So, employees need to feel they're being paid fairly and treated equitably. Pay, benefits and flexibility are table stakes items, though, and if those aren't perceived as fair, it's hard to move the needle on the deeper engagement factors.

But once those are in place, the real drivers of long-term value are much more intrinsic than those of pay and benefits. So, it's going to be things like the purpose and the values alignment. Do the employees feel respected and supported? Are they feeling like they have opportunities for growth and development? Are they able to perform without operational friction? So, the operational effectiveness - and these aren't just the feel-good factors, they are truly predictive of performance in the organization. When employees feel connected and empowered, they give more discretionary effort and that shows up on your bottom line.

Hannah Kubik: Right. And that's what makes this so powerful. Engagement isn't just about satisfaction. It's about strategy and thanks to tools like sentiment surveys and benchmark analytics, we can measure and improve it with precision.

Scott G. Smith: Exactly. It's just like the Moneyball example that we started with. The organizations that win are the ones that use the right data to make better decisions. Engagement data is your early warning system of your competitive advantage.

Hannah Kubik: Exactly, well said. And I would just like to tell our listeners that if you would like to learn more, please check out Scott's blog at herbein.com\blog. And if your organization is ready to turn sentiment into strategy, reach out to our Human Capital team.

Scott, thank you so much for joining me today.

Scott G. Smith: Thank you so much for having me. I really appreciate it.

Hannah Kubik: And thank you to our listeners. Don't forget to subscribe to the Herbein conversation podcast for more insights and ideas that move your business forward. Until next time.