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A few years ago, America experienced something dubbed the “Great Resignation” where millions of workers quit their jobs. While modern companies aren’t facing the same onslaught of resignations, most leaders are still actively focused on improving employee retention.
One key element to solve the retention problem is to improve employee engagement. Retention and engagement are intertwined, and working on one can help improve the other. Read on to learn more about both employee engagement and retention and how to boost both of them to improve your workplace environment.
What Is Employee Engagement?
Employee engagement is the mental and emotional connection a worker feels toward their job. Engagement is made up of several components, which is what makes it important and difficult to fully define:
- Value. Part of whether someone is engaged depends on if they’re finding value in the work they do and with the company. That can include if someone feels that their pay is sufficient, if they have work they’re passionate about, and if they feel like the HR department supports them.
- Experience. Engagement also encompasses the journey someone has at your organization from onboarding to their relationship with their manager to even your company’s policy on sustainability.
- Satisfaction. This is how happy an employee is with their working life. It’s often considered the emotional component to employee engagement.
Unfortunately, employee engagement is lower than it’s been in 11 years. In fact, 4.8 million fewer employees were engaged during the first quarter of 2024 than in 2023. This includes remote, hybrid, and in-office workers.
When engagement is at an all-time low, many companies are likely experiencing a retention crisis too.
What Is Employee Retention?
Employee retention is a company’s ability to keep workers at their organization for an extended period of time. Turnover occurs when employees leave quickly, and your company has to begin filling positions again. This is a pricey problem to have. It costs companies one half to two times the leaving employee’s salary to have to fill their position.
Retaining top talent is a top priority for many organizations today because keeping your workers engaged and happy with your company has big benefits.
Why Is Employee Retention Important for an Organization?
Retaining your best workers benefits your company’s ability to make money and your other employees. These are three reasons why employee retention is such an important metric to keep high:
Increase Productivity and Profitability
Keeping top talent improves how much your company makes. That’s because you’re retaining people who perform well, which directly impacts profitability. On top of that, retention keeps the workflow smooth, whereas turnover interrupts productivity and throws entire teams off balance. Instead, retention keeps productivity high.
Reduce Turnover Costs
Turnover is a costly experience. When a new hire leaves, you’ve essentially lost all of the funds you invested into hiring that individual. Now you have to invest more resources into hiring a new employee to fill that role. If this is happening over and over again, it adds up quickly and becomes a major organizational problem.
Maintain Organizational Knowledge
Your top employees often come with some of the best industry experience. Once they’ve been at your company for awhile, they also have extensive knowledge of how your organization works. That kind of expertise is priceless. Losing your employees after they accumulate that knowledge can hurt your organization. Instead, keeping your employees long enough to train the next generation helps you maintain this expertise for years to come.
Better Customer Service
Turnover can hurt your customer’s experience as well. Keeping your workforce consistent and happy to be there encourages them to create a fantastic experience for your customers and clients.
The Relationship Between Employee Retention and Employee Engagement
High engagement drives retention. When your employees are having a positive employee experience and feeling valued, they’re likely to be passionate about their job and stick around for years to come. One of the main reasons employees leave is because of a lack of engagement. Companies with engagement scores in the bottom quartile typically experience 31–51% more turnover than those with high engagement rankings.
That means if you want to tackle retention, start by looking at all the ways to improve your employee engagement. Creating a plan that is designed to create a high level of engagement will also likely increase your retention, according to Gallup.
10 Strategies to Improve Employee Engagement and Retention
Because of the intertwined nature of engagement and retention, tackling both together is possible. These are 10 strategies that could help your company improve these metrics and create a great employee experience:
1. Develop a Comprehensive Onboarding Program
Retaining your employees starts the second they begin interacting with your company. Developing a solid onboarding program is a way to make sure your new workers’ first interactions as an employee are positive, which can help you increase your engagement and retention.
A good onboarding program is going to make new hires feel welcome and introduce them to the policies and practices they need to know about. For example, you could have an onboarding party where you introduce all of the new hires to the other employees and encourage them to build relationships. Another way to do this is to hold an informational seminar where you can answer any questions new workers might have.
Helping your newest employees have a good first few days at work can help them start engaged and want to stay.
2. Foster a Positive Company Culture
A strong and inclusive company culture is one of the best retention strategies. When your organization has an environment that promotes good values and supports your employees’ wellbeing, people are going to want to stay for the long haul. On top of that, when your people feel welcomed and cared for, they’re going to be more engaged with their work.
Creating a positive work environment includes focusing on developing good leaders, offering competitive benefits, and fostering two-way communication with your employees.
3. Provide Continuous Learning and Development
In 2021, 63% of people who left their jobs said they did so because of a lack of development opportunities. Most workers want a chance to learn, develop, and get promoted. Without those chances, they’ll turn to other jobs as their way to progress. Plus providing development can help your teams feel more connected with their work and supported by their employer.
To set up development programs, consider holding regular training sessions, making internal promotion pathways clear and public, or setting up coaching and mentoring programs. These efforts can help your employees feel like they have a chance to learn new skills and to move up the ladder at your company.
4. Encourage Open Communication
Communication is important to maintaining any positive relationship, including between employees and employers. When there’s any updates or changes on your end, make sure it’s clearly communicated to everyone at the company. Consider what channels you have to reach people and try establishing more if there aren’t enough options.
You may also want to look at how your workers can communicate with you. Think about how you can create an open-door policy where people know how to reach you with questions and concerns. Creating a policy like this can encourage your employees to communicate with you, which can help them feel engaged at work.
5. Recognize and Reward Employee Contributions
In a recent survey, 66% of people said they’d quit a job if they didn’t feel appreciated. To avoid this problem entirely, create a recognition program that celebrates accomplishments. For example, your program could commemorate a win on a project, an anniversary with the company, or a period of extra hard work.
Don’t forget to reward your employees when you recognize them. It doesn’t have to be big or expensive, just something meaningful. Even a letter from the CEO can be an impactful way to recognize an accomplishment. Creating a culture of employee appreciation can help create a place people want to work for years to come.
6. Organize Team-Building Activities
Having friends at work is important for both retention and engagement. One way to help make that happen is to actively hold team-building events for your employees. These can be simple get-togethers where a team chats about their weeks, or it could be an elaborate day at the ropes course.
Try to have organized activities to ensure that they’re happening regularly. You might set up monthly get-togethers or annual team building events to help foster connections at your workplace.
7. Promote Work-Life Balance
Good pay isn’t enough to keep people at your company anymore. Top talent wants to work somewhere that promotes work-life balance and supports them holistically. Creating an environment that provides good work-life balance can attract top talent, reduce burnout, and fosters employee engagement.
Solving all of those problems then, in turn, cuts down on turnover.
8. Ensure Competitive Compensation and Benefits
Engagement requires that your employees feel valued and like their efforts are being fairly compensated. That means they need to be paid well and have benefits that they love. To make this happen, consider spending time researching what is competitive in your industry to make sure your salaries are high enough. You might also ask your employees about what benefits they want and implement the most requested.
Consider holding regular compensation meetings with your workers. This can be a chance to evaluate pay and benefits and learn what would help them feel valued. These conversations can help you improve retention.
9. Create an Inclusive Workplace Environment
People are more engaged and more likely to stay at a workplace where they feel like they belong. To achieve this, you’ll want to actively create an inclusive environment. That includes implementing good diversity, equity, and inclusion (DEI) policies. For example, your company could:
- Hold regular training. Education can teach people about ways they can help promote inclusivity. For example, a workshop on unconscious bias can be helpful.
- Use inclusive language in policies. Using language that includes everyone can help employees feel like they belong. For example, you could write a parental leave policy without using gendered language.
- Establish mentorship programs. Providing some of your diverse employees with mentors can help them feel like they belong and how they can succeed.
- Actively promote diverse workers. Diverse leadership is going to help you create a more inclusive workplace. Consider your promotion and hiring practices to make sure you’re creating a diverse leadership team.
10. Develop an Employee Engagement Strategy
Actively improving your employee engagement levels isn’t going to happen by accident. Instead, it’s going to require consistent effort. One way to make sure your workplace is constantly improving is to create an employee engagement plan. This document is a great place to outline every step you’re taking to boost engagement.
A solid plan will likely include:
- A goal for improving engagement
- Specific strategies you’re using to improve your engagement
- A way to measure engagement to determine if you’re improving
Creating and Optimizing an Employee Retention Plan
An engagement plan is a piece of the larger employee retention plan you can create. A retention plan is your strategy to keep employees engaged and at your company. To create a successful plan, consider adding each of these sections:
- Your overall goals for retention and how you’re measuring retention currently
- How you’ll prioritize retention during the hiring process
- Every strategy you’re using to combat turnover and increase retention (like the 10 above) while the employee is at your company
- Your plan for exit interviews and other similar tactics to gather data about why employees leave
- How you’ll monitor your retention
- What equates success and how you’ll measure increases in retention
Creating and adapting this plan can help you take active steps to improve retention and improve your company.
Investing in Employee Experience to Boost Engagement and Retention
For your team members to be engaged and want to stay, you’re going to need to improve the employee experience. Ensuring everyone has a good experience with your company can help you ultimately improve your productivity, performance, and more.
If you’re looking for ways to improve the employee experience, start with some of these strategies and contact CPS HR Consulting.