A huge part of company cohesion relies on all members believing and living shared values. It’s this commitment that helps employees reach personal, team, and company-wide goals, all while improving employee engagement and retention.
Ultimately, employee engagement means tighter teams and a better bottom line for their employer. These are the employees who spend their energy on elevating the company, taking ownership, and leading by example.
But cohesion doesn’t happen when one (or sometimes several) employees are not engaged in their day-to-day responsibilities or bigger-picture goals.
This disengagement can come from any number of problems—which we’ll get into a bit later—but its result hurts one thing: employee retention. Poor employee retention means employers pay more over time, and exert unnecessary internal energy on searching for, hiring, and training new employees.
Key takeaway: Companies with recognition programs have a 31% lower voluntary turnover rate.
This post aims to help employers understand why improving employee engagement must be a central part of their overall business plan if they want to improve employee retention rates, gain more insight into employee retention trends, and ways to apply this information to their own workplace.
We’ve got good news and bad news. Let’s get the not-so-good news out of the way so we can focus on the bright side.
We’ll get straight to it: Employers are having a harder time keeping employees around—especially employees who fall into the millennial generation. In fact, 43% of millennial workers plan to leave their jobs within two years, and strongly consider joining the gig economy. This should be an about-face for employers for a couple of reasons:
1. The sheer volume of employees leaving
This high volume means that, for many reasons, employees think just about anywhere else offers a better environment for their personal and professional goals. Somewhere along the way, they grew disengaged from their roles.
2. Giving up full-time employment benefits
The gig economy has gained infamy for being benefit-deficient and flexibility-bountiful. The latter is one of the biggest draws for gig workers, but the former poses problems millennials are willing to face instead of remaining with their current employers.
This trend doesn’t suggest that the “grass is always greener” elsewhere, just that a growing number of employees are willing to forfeit certain benefits in favor of other considerations.
Employee retention problems aren’t limited to just one or two sectors; employers across industries stand to benefit from reduced turnover. However, some are harder hit than others.
Highest turnover rates by industry:
There’s no single reason employees (especially in so many different industries) decide to seek out new opportunities and ultimately leave their current companies for new positions. However, two reasons prevail:
Payscale found that most employers assume higher pay directly translates to increased engagement and better performance—but this is a slippery slope.
While pay is certainly a big factor in motivating employees to stick around, it isn’t a cure for deeper issues. Employees who have diverging outlooks from their colleagues and employers and whether or not they feel appreciated by their peers is a huge factor in disengagement.
Other reasons why employees can lose their sense of purpose:
Misalignment happens even among employers’ top employees, ones who have historically gone the extra mile and exude a company’s values in everything they do. But the shift from engaged to disengaged can happen quickly, especially if an employee’s competence in their role declines, their passion wanes, and their organizational needs are not met.
It's also common to see burnout in these types of employees, so keep an eye on signs of that—and stay on top of solutions.
How these employees experience misalignment:
OK, we’ve harped on the shortcomings of poor employee engagement long enough. Let’s get to the good news!
Despite trends that expose the undeniable need to improve employee retention rates, employers should be relieved that, across all sectors, employee engagement is tied for an all-time high. 34% of employees report being engaged, while 16.5% feel actively disengaged. These numbers may sound low, but that’s two engaged employees for every one disengaged employee.
The 53% of employees in the “not engaged” category aren’t necessarily a downside; they follow their responsibilities, meet goals, and are reliable. Could they improve? Yes. Could they probably stand to go above and beyond their roles? Maybe. At the end of the day, the work they do still drives the business forward. It's the 16.5% who fit in the "actively disengaged" category are the ones who need their employer's support the most.
It may sound obvious, but employers should do all they can to help their employees become and remain actively engaged in their roles. Improving employee engagement isn’t easy, but it’s well worth employers’ time and financial investments.
Although there are many reasons to find a deeper meaning for improving employee engagement, employers should keep employees engaged for as long as possible if for no other reason than the bottom line.
Employers spend an average of $4,000 and 52 days per new hire—and that’s just hiring! On top of that, employers invest the equivalent of six to nine months of an employee’s salary to hire and train the next employee to fill their role.
In total, when taking into account an employee’s productivity, it costs employers about 400 times more to replace an employee than to invest in keeping them around. 💸
We’ve explored what drives employee disengagement and what signs employers need to look for to spot a disengaged employee. Now comes the time to put ideas into action to improve employee retention and boost employee engagement.
At the end of the day, improving employee engagement doesn't have to be a big undertaking. By making sure recognition is at the forefront of everything you do—even initiate a round of applause simply for sending an email—you can rest assured knowing your employees feel fulfilled. And that's going to help you be even more successful in the long run.
Keep this free infographic on-hand to pitch your new and improved employee recognition program at your next meeting.
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