- Employee engagement and retention strategies go hand-in-hand to reduce employee churn and absenteeism
- Good employee engagement strategies help to improve employee sentiment, build commitment, and motivate employees to contribute to the growth of the company
- Understanding the evolving needs of your employees and taking proactive steps to address the same can be the starting point for a robust engagement and retention strategy
High employee turnover rates, accompanied by lost productivity and recruitment costs, can have a crippling impact on the prospects of any company. Consequently, when an employee leaves, the impact is resounding and goes beyond just the loss of talent.
World around, 85% of HR leaders have made employee retention attempts their top priority for the next few years. At the same time, the 2022 State of the Global Workforce reports that employee engagement levels around the world stand at a mere 21%.
The numbers stand at a stark difference from each other. Is there a true divide between retention and engagement? Or does one reinforce the other?
What are Employee Engagement and Retention Strategies
Employee engagement refers to the act of building a positive environment at work where the employees feel involved and motivated at work and are willing to perform their best for the organization. Engagement levels measure the connection employees share with the organization.
Employee retention, on the other hand, refers to fewer employees leaving the organization. It is the organization’s ability to have a lower turnover rate.
Employee engagement has a massive impact on employee retention. A great engagement strategy and a robust retention plan aren’t mutually exclusive. Engagement strategies work in tandem with retention goals to solve the problem of employee turnover.
Benefits of Employee Engagement and Retention Strategies
Losing employees to voluntary turnover, beyond layoffs and firings, can be heavy on any organization’s pockets. For instance, hiring a new employee can cost 50% of the employee’s annual pay. Not only do you bring in new talent at a premium, but you also lose the institutional knowledge and resources invested in their training and development.
To reduce employee turnover, you require a mix of engagement and retention strategies.
Engagement and retention are mutually inclusive, i.e., engaged employees stay longer on their jobs. Employee retention is as important for an organization as employee engagement, and there are many reasons for the same.
#1 Time and cost saving
When employee turnover increases, the cost and time investment in hiring new employees also increases. When employees are retained, the need for constantly onboarding and offboarding employees reduces, saving valuable resources.
#2 Improved employee experience
The new hires cannot be at ease in the new work environment if their peers/superiors are constantly changing due to voluntary turnover. Employee engagement and retention create a favorable image of the company, inform candidates about the great work culture, and help them get accustomed to their new job role.
#3 Strengthened employee relationships
Long-term employee-employer relationships are built on trust and loyalty. Employees who are engaged feel committed to the company’s mission and consider themselves a part of the grand scheme of things, collaborate with their peers, and contribute towards each other’s development.
#4 Retained talent pool
Retained, experienced employees are an asset to any business as they can directly contribute to the success of your business. First, because they are aware of the goals and vision of the company, and second the company doesn’t need to incur additional resources for training new ones.
How to Improve Employee Engagement and Retention
Employee engagement strategies can be used as a retention tool to reduce employee turnover. Some of the top employee engagement and retention strategies that businesses can use include the following:
#1 Talent Management as a retention tool
One of the key drivers of employee engagement, talent management ‘seeks to attract, identify, develop, engage, retain, and deploy individuals who are considered particularly valuable to an organization.’
A robust talent management strategy can help drive performance and engagement in your employees. Talent management Initiatives, as per the current employee engagement trends and in line with retention strategies, may seem to be complicated, but once laid out can accelerate the success and growth of your company.
Some of the talent management initiatives include:
- An onboarding process that takes company culture and positions into consideration
- Effectively managing existing staff
- Recognizing and nurturing existing talent
- Providing space for employees to build relationships
Talent management aligned with engagement and retention strategies results in reduced staff churn, increased sales, and improved performance and productivity.
#2 Work-life balance for better engagement
Work-life balance has become a greater priority in the lives of professionals, especially after the pandemic forced the majority into the work-from-home setup. No employee wants to be toiling at work most of their waking hours. Even if they are forced to, the stress levels and lack of productivity don’t add much profitability.
57% of job seekers consider poor work-life balance as a dealbreaker, and 66% of employees don’t strongly believe they have a work-life balance. Employees would prefer a work-life balance to a high-paying stressful job.
To engage and retain employees, organizations need to address the problem first. A few ways which can be helpful in achieving employee work-life balance while retaining them can be:
- Ensure every employee gets an appropriate amount of work they can manage without compromising on their personal time
- Train managers to audit workloads and be aware if their team members are getting overwhelmed
- Encourage open communication between employees and managers regarding the same
- Opting for regular feedback and proactive steps to avoid burnout in employees
- Flexible timings for employees to choose the way they want to work from anywhere
When employees are able to manage their work demands and personal lives well, they are better satisfied and motivated to stay loyal to their organization in the long run.
#3 Wellness and recognition programs for employees
Companies understand that they need to care about every aspect of their employees’ lives to keep them happy and motivated. Wellness programs are one such initiative focused on the physical and mental health of the employees.
Physical health initiatives include regular medical checkups, on-site immunization, gym facilities, in-house medical teams, etc. Mental and financial health is also considered a significant part of employee wellness programs.
When employees enjoy a happy and satisfied personal life, they come back more motivated and healthier at work. Employers must offer a suite of wellness offerings that shows their investments to uphold employee wellbeing. This, in turn, leads to more engaged and better-retained employees.
Recognition programs also play a big role in pumping up employee morale and making them feel valued. Employee recognition goes beyond bonuses and pays hikes; it requires special efforts made by the management to recognize good and exceptional talent in the office.
#4 Continuous feedback to sustain two-way communication
The best way to generate engagement and satisfaction among employees is to promote honest and open communication at all levels in the organization. There should be enough channels – whether formal or informal – that an employee may use to honestly convey their feedback.
Confidential conversations can play a crucial role in setting up two-way communication critical to healthy communication at the workplace. An engagement platform that does the trick is an essential tool for employees. The management’s response to such feedback, their tone of voice, and the steps they take to mitigate the issue will be the deciding factors for the workers to adapt to the open feedback framework and feel involved.
When employees feel their voice is being heard and the top management is empathetic to their cause, the communication so established automatically perks up engagement and retention levels in employees.
#5 Inclusive company culture
A McKinsey study reported that 26% of women who perceived themselves as the only one of their demographic were considering leaving their work, compared to 17% of women who were well represented.
Another Glassdoor survey revealed 67% of job seekers consider workplace diversity an important factor when considering employment opportunities, and more than 50% of current employees want their workplace to do more to increase diversity. The new-age millennials and Gen Z don’t feel comfortable in a workplace where they are not well-represented and may move to new places where they are better represented.
Organizations need to live up to employee expectations and foster a work culture that grabs the true essence of DEI (Diversity, Equality, and Inclusion). To foster a true sense of diversity, the work should begin right from collecting data around the same and understanding what workplace diversity confers.
Organizations may opt for self-reporting initiatives where employees are encouraged to report. The result – you get more nuanced metrics that can help you adopt an intersectional approach that makes people from all backgrounds, colors, races, and genders feel valued at work.
An inclusive company culture helps employees thrive and feel they belong. That belonging is what psychologically impacts the engagement levels of employees. They feel safe, included, and treated equitably. It also helps build strong relationships between employees and with the wider business of the organization to further increase their engagement levels.
#6 Strong onboarding process
After you’ve hired a fresh batch of candidates that you believe would be a great fit for the organization, you need to set up a proper onboarding process to welcome them into the company. This works two ways – the new employees get comfortable with their roles, and the informed coworkers would now be helping them build engagement immediately.
Some of the ways which you can inculcate in your onboarding process to engage and retain new recruits include:
- Send out a new employee email that informs the existing employees about the arrival of new employee/s and can prepare them to be of any help if required.
- Design handbooks that could be a fun way of introducing the employee to the company culture and also serve as a how-to guide throughout their onboarding phase
- Provision of training resources and tools to help them get started at work
- An informal meet-up where the employee is introduced to their superior and peers
- Allot a superior whom the newbie can approach in case of need
A smooth onboarding process would allow frictionless entry, would be engaging, and also assist in retaining new talent within the organization.
#7 Learning and development opportunities for employees
While at work, there is a continuous need for employees to learn new skills and upgrade their existing ones to stay relevant in the dynamic corporate world. Most companies focus on employee satisfaction and wellness but fail to work on the aspirational aspect of their lives.
Lack of professional growth is a prime factor behind high turnover rates. The Employee Expectations Report for 2022 found that growth-related comments comprised 8% of all employee comments, up from 2% in 2020. If employees find their current work as lacking actual outcomes for their personal growth, they feel less engaged and may soon start to look for opportunities elsewhere.
Providing opportunities for employee growth and development can prove a game-changer for any company as the employees come to believe that their company truly feels for their growth and career.
Among the initiatives that concern learning and development, some of them could be:
- Mentorship programs and resources that prioritize career development conversations
- Opportunities for internal mobility within the organization
- Targeted feedback on their career growth and scope and further advice on achieving goals
- Internal programs to help them build connections with employees within the workforce
- Promotions and transfers should be done in an open and transparent way
- Address the pain points of the workers and build action plans to tackle the same
An optimized retention strategy breathes on employee engagement. A Gallup survey in 2020 found that high-turnover companies with top-quartile engagement had 18% lower turnover than those with bottom-quartile engagement.
The interconnected nature of engagement and retention is best understood and applied by understanding your employees’ changing needs and adapting to the same. This, in turn, would help develop a positive work outlook among employees and decrease motivation for employee turnover.
FAQs on employee engagement and retention
What are employee engagement strategies?
Employee engagement strategies refer to the efforts and initiatives that the management of a company takes to create a flourishing and favorable environment for the employees. Engagement strategies allow employees to build robust, long-standing relationships with their companies, where they feel motivated and impassioned to work for the organizational vision.
What are the 4 pillars of employee retention?
The four pillars of an employee engagement strategy include well-being, company culture, training and development, and recognition. These four pillars have a responding impact on employee churn and retention rates.
Is employee engagement an HR strategy?
Employee engagement is an HR strategy. It defines the level of dedication and commitment a worker feels towards their work and regard for their role within the organization. Engaged employees are assets to any company. They contribute highly to the growth of their company and foster deep connections with their organization in the long term.
What are the 5 stages of employee engagement?
The five stages of employee engagement in the employee lifecycle model (ELC) are recruitment, onboarding, development, retention, and exit.
How to retain employees through engagement strategies?
There are many ways to improve retention using employee engagement. Some of the strategies include great onboarding, positive company culture, great scope for professional growth, encouraging feedback and communication, etc.