The Secret to Employee Retention? Happy & Engaged Employees

Gallup connects employee engagement to employee retention

If your organization suffers with high employee turnover, then it’s probably because they don’t feel engaged in their work, with their boss, with your customers, or by your values and purpose. Your mission statement may be mundane. In this article, we examine the connection between engaged employees and retained employees.

Employee engagement is improving. That’s great news. Or is it?

Last year, Gallup found that employee engagement numbers in the United States had improved to equal the highest on record. 

The headline of ‘34% of employees now engaged with their work’ sounds impressive, especially when compared with far lower numbers that we experienced previously. But flip this on its head, and we find that two-thirds of employees are either not engaged with their work or actively disengaged from it. No wonder that 27% of employees voluntarily quit their jobs in 2018 (Working Institute Retention Report 2019), and employee turnover increased by 7.6% over 2017.

The improving employee engagement numbers are a reminder of how much further an organization must travel to reduce the cost of employee turnover.

Engaged employees are retained employees

In further research, Gallup found a clear connection between employee engagement and employee retention. Those organizations that place employee engagement strategies at the center of their business strategy benefit from lower absenteeism, higher profitability, and reduced employee turnover. The numbers are astonishing. An organization that sits in the top 20% in engagement scores:

  • 41% lower absenteeism

  • 21% higher profitability

  • 59% reduced employee turnover

Employees who are passionate about the work they do, and who believe in their employer’s values and purpose, don’t only contribute with improved performance, they contribute by staying around too.

What does employee engagement look like?

Engaged employees are easy to spot. They are the people who are absorbed in the work they do. They are those who speak enthusiastically about your services and products. They are the employees who go out of their way to ensure your customers are satisfied, and the ones whose friends ask if there are any jobs available in your organization.

To an engaged employee, their job is far more than a monthly paycheck. They are passionate about their job, diligent with their tasks, and advocates of their employer’s brand. They are the bedrock upon which high-performing teams are built.

When it comes to employee engagement, leaders talk the talk but don’t walk the walk

In a Dale Carnegie whitepaper, Employee Engagement: Making Engagement a Daily Priority for Leaders, we discover that an incredible 85% of leaders say that employee engagement is a priority. Unfortunately, this verbal commitment is not backed up by actions. Despite so many leaders stating that employee engagement is a top priority, only a third follow through by making it a strategic goal. Thus, performance and profits suffer.

Where should you start with employee engagement?

When you are developing an employee engagement strategy, Gallup’s research provides an apt starting point – your organization’s managers. Your managers account for 70% of the variance in employee engagement.

The organization that develops their managers to have regular and meaningful conversations with their employees is likely to experience improving employee engagement. Great managers gain respect and trust. They communicate effectively with their people, engaging them in the organization’s purpose and mission. They delegate tasks to get work done and improve the skills and abilities of their team.

Are your managers engaging?

Gallup also finds that only one in 10 people have the natural talent to make engaging managers. Put in the right roles, these people drive engagement and excellence. Better news is that two in 10 people have some of the natural ability needed, and can be coached to become highly effective managers.

Of those people already in management positions, 20% demonstrate natural talent for managing employees effectively. Another 40% demonstrate a basic talent. Combined, around 60% of managers could drive engagement higher – and where this is the case, they contribute around 48% higher profits to their organizations than average managers.

In summary, an organization that wants to reduce employee turnover should put employee engagement at the heart of its business strategy, and then ensure that its managers are equipped to execute that strategy. To discover how to do this, contact Forward Focus today.


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