Integrating the strategic HRM literature with key aspects of the job demands‐resources (JDR) model, we propose in this study that empowerment‐focused HRM and labour productivity influence work engagement of employees by shaping task‐related resources and demands. A total of 311 employees nested within 46 work units of a general hospital rated their task‐related resources, demands and work engagement. The line managers from these work units rated the implemented empowerment‐focused HR practices in, and the relative labour productivity of, their work unit. Results indicate that job variety positively mediates the influence of empowerment‐focused HRM on work engagement. In addition, job demands negatively mediate the influence of labour productivity on work engagement. The findings shed light on the way empowerment‐focused HRM and labour productivity influence work engagement and highlight the importance of taking into account key aspects of the JDR model (job demands and resources for employees during work) as mediating mechanisms.