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January 30, 2020
Maddy Osman

Infographic: Want to improve employee retention? Start with improving employee engagement

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. 

Free infographic download: improving employee retention by improving employee engagement

What does improving employee engagement look like? 

Employee retention trends

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. 

The top reasons employees “go gig”

  • Greater flexibility – 62%
  • Be their own boss – 49%
  • Choose their most suitable projects – 46%

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:

  1. Technology (software) – 13.2%
  2. Retail and consumer products – 13%
  3. Media and entertainment – 11.4%
  4. Professional services – 11.4%
  5. Government/education/non-profit – 11.2%
  6. Financial services and insurance – 10.8% 
  7. Telecommunications – 10.8%

Why employees disengage in all sectors

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:

Reason 1: They feel a lack of purpose

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:

  1. Employers haven’t thoroughly explained the company’s story, why and how it came to exist, and how the company benefits others (see: greater purpose)
  2. Employees don’t feel their employer or their peers recognize their efforts well or often enough

Read more about how peer recognition programs can help.

Reason 2: They feel misaligned with the company

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:

  1. Role changes that reduce an employee’s responsibilities over the tasks they enjoy
  2. Poor training spells problems for employees who excelled in one department but struggle when promoted or moved to another—usually due to departmental restructuring
  3. When life changes that require an employee to spend more time outside of the office are not met due to rigid workplace or time off requirements, this often leads to a waterfall of cause-and-effect task management and motivational issues

Employee engagement benefits employers can't afford to ignore 

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.

Why employers should put engagement first

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.

More money coming in, less flowing out

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. 💸

Improving employee engagement 

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. 

  • Stay flexible: Employees now expect that their employers offer some sort of flexible work conditions, whether flexible hours, days, location, or a combination. Employees who are feeling disengaged may just need a simple change of scenery or, better yet, a couple of days off. 
  • Listen to employees: Even if it's hard to hear. The smartest employers make sure their employees are heard, and the wisest employers continue listening when they receive constructive criticism or when employees express needs. This isn’t easy to hear, but even still, employers must remember that what they’re hearing is an employee coming to them from a difficult place. Let them know that you hear them, and you want to work towards a solution—which brings up the next point.
  • Give employees what they need: Whether it's the tools, software, environment, or support—do employers recognize when their team members need help? Stay on top of the cues and take the time to understand their needs.
  • Lead by example: If employers are truly invested in seeing their company’s values embodied by its team, they must show their employees that they believe in them. This can keep employees from falling into the “actively disengaged” category and help create brand champions within the company, boosting morale and team cohesion. 
  • Celebrate wins together within your new Zestful Reward feed. 😉
  • Call out awesomeness: Employees want their employers to recognize their work. If employers only reach out to employees when mistakes are made, it won’t be long until this wears on an employee and inadvertently causes them to disengage. Everyone likes to be encouraged! Employers must let employees know when they’re killing it—and give other employees the chance to call out their colleagues’ awesomeness through peer to peer recognition programs.

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.

Free resource:

Keep this free infographic on-hand to pitch your new and improved employee recognition program at your next meeting.

Want a little extra help with your rewards and recognition? You've come to the right place. Chat with one of our experts today.

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