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Many leaders and HR professionals are already focused on driving employee engagement and increasing your retention rate. But how exactly are engagement and retention connected? And what are the best strategies to keep both high? Let’s explore how you can drive engagement and retention at your company without breaking the bank.
What is employee engagement?
Employee engagement is a measure of how invested your employees are in their role, their team, and the company’s overall success. Engaged employees are motivated to go above and beyond the duties of their role on a regular basis. There are many benefits of employee engagement, including better performance, a healthier company culture, higher morale, and greater retention. Seventy-two percent of employees would choose a job where they feel supported and valued over one with a 30% pay increase.
Here are some of the major factors that drive employee engagement:
- Recognition: Employees stay motivated and excited when they receive frequent recognition tied to meaningful rewards.
- Leadership: Employees want to work for a leadership team they trust and believe in.
- Company culture: Team members thrive when they’re part of a culture they truly believe in.
- Communication: Open, two-way communication between leadership and employees keeps everyone on the same page and ensures that team members feel like they have a real voice.
- Talent development: Professional development opportunities keep employees excited about advancing in their careers and learning new, important skills.
What is employee engagement?
Retention refers to a company’s ability to keep its employees in house. Retaining team members retains the institutional knowledge of your organization and maintains company culture. It’s expensive to hire new talent, as well: the average cost to hire a new employee is $4,700. And even if you can afford it, over half of HR professionals say they struggle to attract and retain top candidates.
As keeping the best talent in house is a significant competitive advantage, calculating your company’s retention rate is a great way to see how your business stacks up against others. While retention rates vary by industry, a good target is 90%. When determining your organization’s retention rate, start by selecting a specific period of time – a six months, a year, or whatever time frame makes sense. Then simply divide the number of employees at the end of that period by the number at the start and multiply by 100 to get a percentage.
The good news for organizations is that you don’t have to offer top salaries to retain top talent. Create a work environment that supports your team, offer development opportunities, and recognize your team’s hard work, and you’re likely to have strong retention rates. If your organization is currently struggling with a high turnover rate, ask employees for their input on what they think needs to improve, and then take action on the issues they raise.
The link between employee engagement and retention
In short, the more engaged your employees are, the higher your retention rate will be. To understand the connection between engagement and retention, consider why employees move on from organizations. When team members are no longer excited about coming into work every day and feel disconnected from their organization and co-workers, they’re bound to strongly consider other opportunities. But when they’re engaged with their tasks and love being a part of their company culture, they’re likely to pass up even the most appealing offers to work elsewhere.
How to improve engagement and retention
Let’s take a deeper look at a few strategies you can use to build a virtuous cycle of high employee engagement and retention at your workplace.
Encourage employee recognition
Employee recognition is the cornerstone of any healthy company culture. While a quick thank you may not seem like a big deal, it goes a long way when it comes to engaging and retaining employees. Recognizing team members regularly makes them feel seen and leaves no doubt that their hard work is appreciated.
Implementing an employee recognition program is the best way to foster frequent instances of impactful appreciation across your entire organization. These initiatives enable in-the-moment recognition tied to tangible rewards through a modern employee recognition platform. The best recognition platforms are tied to points-based rewards systems that allow employees to claim merchandise and experiences they actually want for their hard work.
Gather and act on employee feedback
Good communication is two-sided. Leadership should be transparent with employees, and employees should feel comfortable sharing feedback in turn. Asking your employees how engaged they are is the first step to addressing the key drivers of engagement at your company.
Data shows that collecting feedback once a year isn’t enough, however. Without real time insights into employee sentiment, it’s impossible to take action to correct issues in time to prevent negative outcomes like increased turnover. That’s why organizations that really care about listening to their employees use employee engagement platforms to collect frequent, in-the-moment feedback across multiple channels, including pulse surveys, AI-powered chatbots, and in-person or virtual meetings. They also quickly act on the feedback employees provide and communicate those efforts to team members to keep frustration and disengagement from setting in.
Build a culture of belonging
Your company culture goes beyond the mission and values printed in your employee handbook. Companies with the best culture walk the walk and actively work to build a great company culture. This involves everything from encouraging employee recognition and practicing open communication to supporting team members’ development and giving them the time off they need to balance work and life. And always strive to tie the work your employees are doing to the larger purpose of your organization, so they understand how their day-to-day tasks align with your company’s vision.
Drive positive change with great leaders
Leaders play a key role in any effort to improve engagement and retention across your organization. When leaders show an active interest in each and every team member’s success, it sends a strong signal that your organization is serious about employee engagement. HR should educate leaders on how to support team members with development opportunities, consistent recognition, and other forms of employee empowerment.
Increase employee engagement and retention with Achievers
Improving employee engagement and retention in your organization sounds great in theory, but how can you implement the right initiatives while keeping expenses in line? Consider the Achievers Employee Experience Platform. Achievers empowers every team member, from leadership to front line employees, by making it easy to provide team members with the recognition they crave through a combination of social and points-based recognition. And for all the other factors that drive engagement and retention, you can rely on Achievers Listen, an all-in-one voice of the employee solution that empowers every leader at your company with the ability to collect and act on feedback.
See how Achievers can transform your organizational culture today with a free demo.
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