There's no doubt about it; people are leaving the workforce in droves.
The Great Resignation is hitting companies hard, causing them to completely re-think their policies. The Bureau of Labor Statistics reports that 4.4 million Americans resigned in April 2022 alone.
Company leaders are wondering how they can turn the tide of these low employee retention rates. As it turns out, the answers may lie in their level of engagement.
For us to understand the relationship between employee retention and employee engagement, we must first understand what is meant by "engagement." According to Forbes, employee engagement is defined as the "emotional commitment the employee has to the organization and its goals."
In today's workforce, mere satisfaction with a job isn't enough to keep employees. If a better opportunity arises elsewhere, the employee will leave if there is no sense of devotion causing them to stay. Gallup conducted a study on employee engagement and found that businesses with the lowest engagement scores experienced a much higher turnover rate, from 31 percent to 51 percent.
The obvious conclusion here is that engagement is not merely one of the reasons employees are leaving their jobs, it may very well be the main reason.
If employee engagement is not something that your company has ever considered, it may seem overwhelming to begin implementing strategies. But in this particular venture, a little can go a long way. Intentionality is key. Making these simple, cost-effective changes will significantly decrease employee turnovers and increase the overall employee experience. Meanwhile, additional positive effects will continue to ripple throughout your company.
Onboarding is the first impression your company makes with a new employee. Often, employers tend to forget their part in this arrangement; the company needs to convince its employee to stick around.
Studies show that 69 percent of employees are far more likely to stay at a job if their onboarding experience was positive. Onboarding is a chance for companies to prove that they can meet employees' needs. Failure to succeed in this early endeavor can greatly diminish your retention rates.
One of the most effective ways to gauge how your employees are feeling about the job is to consistently seek employee feedback. Create an environment where your employees feel secure enough to speak honestly so that the feedback you receive is thoughtful and useful to the company.
Not only does this provide you with precise areas that your company can improve, but it also has the added effect of making the employees feel valued. Knowing their thoughts and opinions are heard and respected can allow employees to view their company in higher regard.
Research has shown that turnover rates are 14.9 percent lower in companies that regularly seek employee feedback.
Your company might have the most inclusive, most engaging work environment in the country, but if it isn't offering competitive pay, then employees will still leave. They may leave regretfully, but they will leave nonetheless.
Employees are generally happier when they have a higher-than-average wage. Although it's not always about the money, companies do need to at least offer the median wage for a particular job.
An employee may stay if everything about the job is great with an average wage. But they will not stick around if everything is great except for low wages. Especially when there are higher wages to be had elsewhere.
Employees often leave a job because they no longer see a path forward. Millennials and Gen Zs especially need to be on an upward trajectory to feel fulfilled in their careers.
Employers should make the paths to promotion clear and succinct, and then follow up as necessary. Knowing that there is something to work towards will not only encourage employees to do their best work but will also make them hesitant to leave.
Transparency is incredibly important in the workplace. When significant company changes are made without explanation, people start to worry. Being honest with your staff about the health of the company or organizational plans for the future will keep your employees from irrationally searching the job boards.
And, like most of these tips, honesty has the added effect of making your employees feel valued. Everyone wants to be part of the team.
When it comes down to it, engaged employees will yield more positive results for the entire company. Open communication and employee recognition motivate employees to not only stick around but also to do their best work. This, in turn, encourages other employees to follow suit. Companies end up with much lower turnover rates and much higher profit margins.
Disengaged employees, on the other hand, never get the chance to connect emotionally to the company. Without a friendly, open workplace environment, employees have no real reason to remain at their job.
It's no surprise that employee turnover comes at a price. Hiring a new employee is much more expensive than retaining one. Studies suggest that the average cost of replacing an employee is roughly 6 to 9 months' worth of that employee's salary.
On top of recruitment costs, training costs, onboarding, and the loss of productivity, there are cultural repercussions as well. When one employee leaves, other employees are more likely to start weighing their options.
But lack of employee engagement has more consequences than heavy turnover. A disengaged work culture produces lower quality work, uninspired employees, and a negative company brand.
With such a significant impact on the workplace, employee engagement should be a company priority. Companies must plan their initiatives and measure them accurately to know what's working and what isn't.
With Spring, company leaders can monitor and track engagement efforts on a much broader scale. Spring's efficient platform keeps all organization, employee interactions, and human resources in one place, keeping your whole team connected.
Spring helps you elevate the employee experience, offering all the tools necessary to create highly engaged teams. By introducing new ways to connect with employees, like shout-outs, celebrations, surveys, and metrics, Spring will keep the company on track to meet its engagement and employee retention goals.
If you're ready to motivate your team and lower your turnover rates, get started with Spring today. We'll work with you to create a supportive and engaging workplace.