Investing in Success: Employee Retention and Engagement Best Practices

Consider this startling fact: research suggests that replacing an employee can cost a company anywhere from 6 to 9 months’ worth of that employee’s salary. Likewise, another report by Gallup reveals that employee disengagement is costing the global economy $8.8 trillion, 9% of GDP.

The data doesn't lie. Employee retention and engagement can drastically impact an organization's bottom line. High turnover rates and disengaged employees drain both time and resources, emphasizing the need for robust employee engagement and retention strategies.

Read on to learn how employee engagement and retention are connected and to learn how you can retain employees.

What is Employee Retention and Employee Engagement?

Employee retention and employee engagement go hand-in-hand with creating a thriving workforce. 

Employee retention involves the organization’s ability to keep its employees over an extended period, thereby reducing turnover and associated costs. Retaining employees is essential because high turnover rates can be detrimental to an organization, incurring significant recruiting and training costs while disrupting operations.

On the other hand, employee engagement pertains to the emotional commitment employees develop for their organization, leading them to invest more energy, creativity, and time in their work. Engaged employees are often characterized as more motivated, productive, and innovative than their counterparts.

Together, these two strategies can create a thriving, motivated workforce with low turnover.

The Connection Between Employee Retention and Engagement

As research has shown, employee retention and engagement are closely interconnected. Engaged employees are typically more satisfied with their jobs and, therefore, are less likely to move to another company.

But exactly how closely related are employee retention and engagement? Consider this:             

• According to Gallup, highly engaged teams have 43% lower turnover rates than their less engaged counterparts.
• 87% of employees are less likely to quit their jobs if they feel engaged at work.
• A study by the Society for Human Resource Management (SHRM) found that 41% of employees consider career development and advancement opportunities important to their overall job satisfaction, which is a key aspect of engagement.

Together, retention and engagement create a continuous cycle. Engaged employees are more likely to stay, and when they do, they contribute to a positive workplace culture, fostering even higher engagement among their peers. As engagement levels rise, so does retention, creating a self-reinforcing loop that benefits both employees and the organization.

Steps for Improving Employee Retention and Employee Engagement

Organizational culture is often the leading cause of employee turnover and disengagement. Why is that? Employees want to work at organizations with positive work environments that support and motivate them. If employees don’t feel supported, motivated, or recognized, their chances of leaving increase drastically.

Here is a step-by-step guide on how you can improve organizational culture:

1. Conduct a Cultural Assessment: Begin by evaluating your current organizational culture. Identify strengths and weaknesses and gauge employee perceptions of your culture.
2. Outline a Roadmap: Clearly define the culture you aspire to create. Specify values, behaviors, and norms that align with your vision.
3. Obtain Leadership Commitment: Secure commitment and support from top leadership. Ensure your leadership team serves as role models for the desired culture.
4. Align the Company: Communicate the new culture vision to all employees, explaining its importance and benefits. Engage employees actively and incorporate their feedback.
5. Policies and Practices Alignment: Review and adjust HR policies, procedures, and practices to reflect the desired culture.
6. Monitor and Measure the Results: Maintain ongoing efforts to sustain the cultural change. Continuously monitor and adapt your strategies in response to feedback and results to ensure lasting change.

Remember, changing organizational culture doesn’t just happen overnight. Having realistic expectations about how long it will take to change your organization's culture is the culture of your organization is crucial. Use the SMART method to craft realistic goals and conduct culture-based surveys to measure your initiative's progress.

Learn more about changing organizational culture to cultivate a healthier work environment.

6 Effective Strategies to Retain and Engage Your Workforce

Crafting intentional employee retention strategies is the key to transforming your culture and improving retention rates. To help you get started, here are some of the best strategies to motivate your workforce and reduce turnover:

1. Create a positive work environment

A positive work environment is fundamental to employee engagement and retention. Foster a culture of respect, open communication, and recognition. Encourage teamwork and provide opportunities for employees to collaborate and build strong relationships with their colleagues. When employees feel valued and supported, they are more likely to stay and engage with their work.

2. Offer competitive compensation and benefits

Competitive compensation and benefits packages play a significant role in retaining employees. Conduct regular market research to ensure your pay rates are competitive within your industry. Additionally, provide your staff with attractive benefits such as healthcare, retirement plans, and flexible work arrangements. A well-rounded compensation package can be a powerful motivator for employees to stay with your organization long-term.

3. Invest in professional development

Employees are more likely to remain engaged when they see opportunities for growth and development. Provide training programs, mentorship opportunities, and clear career paths within your organization. Encourage employees to set and pursue their professional goals and support them in achieving those goals. When employees feel they are advancing in their careers, they are less likely to look for opportunities elsewhere.

4. Recognize and reward achievements

Recognition and rewards can go a long way in boosting employee engagement and morale. Implement an employee recognition program that acknowledges outstanding performance and achievements. This can include bonuses, awards, or simple expressions of appreciation. Recognized employees are often more motivated and satisfied with their jobs.

5. Promote work-life balance

Feedback and communication are key to understanding and addressing employee concerns and needs. Conduct regular performance reviews and check-ins to provide constructive feedback and to listen to employee feedback as well. Make sure employees have the opportunity to voice their opinions, suggest improvements, and express their career aspirations.

6. Conduct regular feedback and check ins

Encourage a healthy work-life balance among your employees. Promote policies that allow for flexible scheduling, remote work, and paid time off. When employees can manage their work and personal lives effectively, they are more likely to stay committed and engaged with their work.

Conclusion

Retaining and engaging employees is vital for the success and sustainability of any organization. By understanding the link between employee retention and engagement and implementing effective strategies, organizations can create a thriving workplace where employees are motivated, satisfied, and committed to their roles.

Employee Retention FAQ's

How do you fix low employee retention?

Solving for low employee retention requires a robust employee retention strategy tailored to your organization's specific needs. Addressing low employee retention can be achieved through strategies like conducting exit interviews, improving compensation packages, and fostering a positive workplace culture.

If you aren't sure what is driving employee turnover at your organization, you might want to consider conducting a company-wide employee survey or implementing an anonymous pulse survey to better understand your employees' sentiments. Once you have enough responses, you can then shape your employee retention strategies to fit your employees' needs.

How do you motivate and retain employees?

Employee motivation, both intrinsic and extrinsic, is key to retaining valuable talent. A few notable ways you can motivate and retain employees include recognizing their achievements and milestones, investing in their career development, and creating a supportive and inclusive workplace.

What are 3 ways to retain employees?

There are numerous employee retention strategies you can use to help retain your valuable talent. Three key methods include offering competitive compensation, providing opportunities for career growth and development, and prioritizing work-life balance and supportive work environment.