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The impact of employee engagement on employee retention

Written by Nadya H | May 8, 2023 2:57:36 AM

Employee engagement increases productivity, motivation, and commitment to attaining the company's objectives. Also, there is an impact of employee engagement on employee retention, as engaged workers are less likely to quit their positions.

The engagement of employees is essential to the success of any company. It speaks to the degree of zeal and dedication workers have for their jobs and the companies they work for.

According to a survey by Gallup, engaged workers show up daily with enthusiasm, mission, presence, and energy. Teams with engagement scores in the top 20% experience a 41% drop in absenteeism and a 59% drop in turnover. Employee engagement also impacts customer satisfaction. A study by Temkin Group found that companies with highly engaged employees have a Net Promoter Score (NPS) that is 2.5 times higher than companies with low engagement levels. 

This article will offer insights into how firms may generate an engaged workforce and the rewards of doing so by looking at various studies and real-world experiences. We will also provide practical tips and strategies that companies can use to improve the impact of employee engagement on employee retention and create a more engaged and productive workforce.

 

Understanding employee engagement and its impact on retention

Employee engagement refers to an employee's emotional connection and commitment towards their work, colleagues, and organization. It measures an employee's motivation, enthusiasm, and dedication to their job and company. 

Employee engagement is essential because it has a direct impact on the success of a company. Engaged employees tend to be more productive, have higher job satisfaction, and are more likely to stay with the company long-term. This, in turn, leads to increased profitability, improved customer satisfaction, and a more positive work environment.

The impact of employee engagement on employee retention is significant. When employees are engaged, they are more likely to stay with the company and be committed to its success. This reduces the costs associated with employee turnover, such as recruiting, training, and lost productivity. In addition, engaged employees tend to be more productive and contribute more to the company's overall success, leading to higher profitability and a stronger competitive position in the marketplace.

Here are the business cases of positive employee engagement:

Businesses with highly engaged teams experience a 14-18% lift in productivity.
 
Businesses saw a drop in absenteeism by 81% when teams are engaged in their work.
 
On average highly engaged teams will experience a 18-43% improvement in turnover. 

 

Our recommended 10 steps to measure & increase employee engagement

Employee engagement is crucial to any organization's success, as it significantly impacts employee productivity, retention, and overall company performance. When employees are engaged, they are more committed to their work, more productive, and less likely to leave the company. 

Below are some ways to increase and measure employee engagement:-

 

1. Collect feedback through pulse or employee engagement surveys 

Collecting feedback is instrumental in gaining employees’ views and tracking their changes and development. These brief surveys are best conducted monthly and are useful to help you keep track of changes in employees’ sentiments. 

 

 

 

 

2. Have a deep understanding of team survey results

The first step you should take after a survey is to identify high-risk groups within your organization - as they are most likely to have low engagement and higher level of burnout. 

3. Acknowledge and clarify comments

Review the open-ended comments left by team members and check if you need to clarify any of them.

4. Communicate survey results and invite solutions

Schedule a session that is at least an hour long to go through the survey results with your team. Invite them to share more so that you get deeper feedback and insights. Open the floor to take in any recommended solutions from the team.

5. Have further 1-on-1 conversations 

Identify specific needs and challenges of each team member in 1-on-1 conversations. Some team members may only feel comfortable sharing their thoughts in a more private setting.

6. Review further feedback and suggestions 

Integrate the feedback received from all team members. Think through the feasibility of suggestions proposed by team members.

7. Create action plan and discuss with manager and HR

Finalise a list of actions that you can realistically work on immediately. Discuss with your own manager and HR to gather feedback on the action plan. Ensure that you plan out your actions on a appropriate timeline.

8. Action plan sharing with team members

Initiate sharing sessions so as to collect preliminary feedback on the feasibility and utility of these action plans.

7. Create action plan and discuss with manager and HR

Finalise a list of actions that you can realistically work on immediately. Discuss with your own manager and HR to gather feedback on the action plan. Ensure that you plan out your actions on a appropriate timeline.

9. Carry out action plans and track progress regularly 

Follow the action plan and ensure follow-through. Check on the success of your actions by asking your team members how they feel about the specific areas you have worked on regularly (e.g., every month).

10. Check-in with HR on insights from monthly pulse checks

Find out if you need to adjust your action plans based on the feedback from monthly pulse checks that HR conducts.

 

What are the benefits of high employee engagement for retention & performance?

One of the primary benefits of high employee engagement is improved retention rates. Engaged employees are more likely to stay with their employers as they feel connected to the organization and invested in its success.

Here are the business cases of a positive employee engagement:

Another significant benefit of high employee engagement is improved performance. Engaged employees tend to be more productive, creative, and innovative.


Benefits for retention

High employee engagement is known to be a critical factor in employee retention. Employees who feel engaged with their work are more likely to stay with the organization longer. 

Here are some of the benefits of high employee engagement for retention:

1. Reduced turnover rates

One of the most significant benefits of high employee engagement is that it reduces turnover rates. When employees are engaged with their work, they are more committed to their jobs and the organization. This, in turn, leads to a lower turnover rate, which saves the organization time and money on recruitment and training.

2. Increased employee loyalty

Employees engaged with their work are likelier to be loyal to their employer. They feel a strong connection to the organization and are likelier to recommend it to others as a great workplace. By using eNPS (Employee Net Promoter Score), organizations can gain valuable insights into employee satisfaction and identify areas for improvement. This can help in increasing employee loyalty.

3. Higher job satisfaction

Engaged employees are more satisfied. They feel a sense of purpose and accomplishment in their work, which leads to higher job satisfaction. This, in turn, leads to increased employee retention, as satisfied employees are less likely to leave their jobs.

4. Improved work-life balance

Engaged employees tend to be more productive and efficient in their work, which means they can complete their tasks and responsibilities more quickly and effectively. This, in turn, can allow them to better manage their time and achieve a healthier balance between their work and personal lives. This can lead to reduced stress levels and an overall sense of well-being, which can help to improve employee retention.

5. Greater commitment to the organization

Engaged employees are more likely to feel a sense of ownership and loyalty towards their employer, which can lead to increased job satisfaction and a stronger desire to remain with the organization over the long term. This can help to reduce employee turnovers and associated costs, such as recruitment and training expenses.

 



Benefits for performance

Employee engagement refers to employees' emotional commitment and motivation towards their work and organization. When employees are engaged, they are more likely to be productive, innovative, and committed to delivering high-quality work. 

Here are some of the key benefits of high employee engagement for performance:

1. Increased productivity

Engaged employees are more productive as they tend to be more focused, efficient, and committed to achieving their goals. They are more likely to go the extra mile to complete tasks and take ownership of their work. This leads to higher productivity and better outcomes for the organization.

2. Higher quality work

Engaged employees are committed to delivering high-quality work as they take pride in their work and want to contribute to the organization's success. They are more likely to pay attention to detail, take the initiative, and find ways to improve their work, which results in higher-quality output.

3. Improved customer satisfaction

Engaged employees are more likely to provide excellent customer service as they are motivated to meet the needs of their customers. They are more attentive, responsive, and empathetic toward customers, which leads to higher customer satisfaction and loyalty.

4. Greater innovation and creativity

Engaged employees are more likely to be innovative and creative as they are motivated to find new ways of solving problems and improving processes. They are more willing to take risks, experiment, and share their ideas, which leads to greater innovation and creativity within the organization.

5. Better collaboration and teamwork

Engaged employees are more likely to collaborate and work well with others as they are committed to the organization's success. They are more willing to share knowledge, support their colleagues, and contribute to team goals, which leads to better collaboration and teamwork.

 

Strategies for improving employee engagement and retention

Several strategies can be implemented to improve employee engagement and retention, including:

1. Provide clear communication

Employees must understand what is expected of them and how they fit into the organization. Regular communication with employees about company goals, changes, and challenges is essential. Continuous listening is a strategy that involves regularly collecting and analyzing employee feedback to understand their needs, concerns, and preferences. This approach can be a powerful tool for improving employee engagement and retention.

2. Offer competitive compensation and benefits

Employees need to feel valued and appreciated. Offering competitive pay and benefits is one way to show employees that you value their contributions and are invested in their well-being. It can help attract top talent, retain employees, motivate them to perform well, and foster organizational loyalty. 

3. Provide opportunities for growth and development

Employees want to feel that they are growing and developing in their roles. Offering training, development, and advancement opportunities can help employees feel fulfilled in their positions and committed to the organization. By investing in their employees' success, organizations can foster a sense of loyalty and commitment among their employees, leading to better business outcomes.

4. Foster a positive work environment

A positive work environment can lead to increased job satisfaction and retention. To foster a positive work environment, companies can implement various strategies such as offering employee recognition and rewards programs, promoting work-life balance, providing opportunities for growth and development, encouraging open communication, and promoting a culture of respect and inclusivity.

5. Encourage employee feedback

Encouraging employee feedback is an effective strategy for improving employee engagement and retention because it promotes open communication, builds trust, and helps identify areas for improvement. Organizations can create a positive workplace culture where employees feel valued and supported by actively soliciting and acting upon employee feedback.

6. Foster a sense of community

Employees who feel a sense of community with their coworkers and the organization are more likely to feel engaged and committed. Encouraging team-building activities, social events, and volunteer opportunities can help foster this sense of community. Organizations can increase employee satisfaction and productivity by creating a positive and supportive work environment, leading to better business outcomes.

7. Provide work-life balance

When employees feel that their employer supports their personal life, they are more likely to feel loyal to the organization. Providing work-life balance can be an effective strategy for improving employee engagement and retention. It helps to reduce stress, increase job satisfaction, improve work-life integration, and enhance loyalty, all of which can ultimately lead to a more engaged and loyal workforce.

 

The power of employee engagement: a key driver for retention and success in the workplace

Employee engagement is a powerful tool that can boost employee retention and success in the workplace. Engaged employees are more committed to their roles, more productive, and more likely to stay with their employer long-term.

EngageRocket BELONG provides valuable tools and insights for organizations to measure and improve employee engagement, ultimately resulting in a more satisfied and successful workforce. Organizations can increase employee engagement and foster a culture of loyalty and commitment by providing clear communication, competitive compensation and benefits, opportunities for growth and development, a positive work environment, and a sense of community. 

 

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FAQs


1. What is the relationship between employee engagement and retention?

Employee engagement and retention are closely related. When employees are engaged, they are more likely to feel valued and satisfied in their work, leading to higher retention rates. Engaged employees also tend to be more productive and contribute positively to the company culture, further enhancing retention.

2. What factors contribute to employee engagement, and how can employers measure it?

Several factors contribute to employee engagement, including opportunities for growth and development, clear communication, recognition and rewards, and a positive work environment. Employers can measure engagement through surveys, focus groups, and individual feedback sessions.

3. How can employers measure employee engagement and track its impact on retention rates?

Employers can use quantitative and qualitative methods to measure employee engagement and track its impact on retention rates. Surveys, focus groups, and individual feedback sessions can provide quantitative data on engagement levels, while retention rates can be tracked over time to measure the impact of engagement initiatives.

4. How can companies promote a culture of engagement and foster long-term employee loyalty and commitment?

Companies can promote engagement by prioritizing employee well-being, providing opportunities for growth and development, recognizing and rewarding achievements, and fostering open communication and collaboration. Building a sense of community and shared purpose can also help foster long-term loyalty and commitment among employees. Regular engagement initiatives and employee feedback can also help to reinforce a culture of engagement.

 

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