Employee retention and engagement are closely linked together. In fact, engagement goes beyond retention. Employees who are engaged not only stay with the organization but are also willing to put in discretionary effort to meet the organization’s goals. Many factors drive both retention and engagement, but there are differences as well. When retention is a problem, it is important to understand what specifically drives employees’ intent to stay.
Engagement is certainly a key driver in retention. Strongly engaged employees are 87% less likely to leave the organization than strongly disengaged employees. That is why many companies choose to focus on driving engagement and reap the rewards in improved retention as a side effect.
A CLC study observed that when satisfaction with total compensation increased, the intent to stay improved by 21%. A similar impact on discretionary effort was only 9%. When employees make career choices, and choose which company to work for, they use a more rational approach, looking at the financial benefits, career and developmental opportunities. When it comes to engagement, emotional attachment is a stronger driver.
The quality of their supervisor is a factor in retention as well. The CLC study showed that the manager creates the environment where the rational and emotional attachment is formed – or not formed. Thus, the manager’s indirect impact is critical.
Managers play a role as triggering factors as well. Often, an employee’s dissatisfaction with the workplace may be dormant, until a defining moment. A triggering event can be a missed opportunity such as a promotion or an interesting project, or a conflict situation where the manager is involved. Star players sometimes get ‘rewarded’ with more and more high stakes work, until they reach a breaking point in their personal lives.
Smart organizations analyze their employee population to determine which factors are behind their challenges. Engagement surveys proactively reveal where action is needed. Exit surveys show what the highest priorities are to address, and may also provide a clue to the most common triggering factors.
Organizations can also create a retention problem by having an inefficient selection process. If the new hires don’t have a realistic view of the job expectations, work environment and the culture, they are likely to be disappointed and leave early. A robust selection process with assessments and structured interviews assures a culture fit and longer term hires.
With existing employees, annual reviews can be turned into stay interviews, as research shows these dialogues drive retention. The managers should probe for employee satisfaction, career aspirations, and look for opportunities to remove obstacles.
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