Employee engagement and staff turnover are two important factors to consider when running a business. High employee engagement can lead to higher productivity and lower turnover, while low employee engagement can result in the opposite.
In this article, we'll explore the relationship between these two factors and how important engagement is when trying to reduce the turnover rate.
What Is Employee Turnover?
Employee turnover occurs when employees leave their current position and are replaced by new hires. Voluntary turnover happens when an employee resigns, and involuntary turnover occurs when an employee is fired.
Common causes of turnover include poor fit between the job and the employee, lack of opportunity for advancement, low wages, and poor working conditions.
While some turnover is inevitable, a high turnover rate can be costly and disruptive to businesses. The direct costs of employee turnover include the expenses associated with advertising, interviewing, and training new hires. Indirect costs can be even higher, as high turnover rates can lead to decreases in productivity, morale, and quality.
Therefore, it is important for businesses to understand the causes of employee turnover and take steps to reduce it.
What Is Employee Engagement?
Employee engagement is a term used to describe the level of enthusiasm, focus, and commitment that employees feel towards their work and their company.
High levels of employee engagement are often associated with increased productivity, creativity, and retention rates. Engaged employees tend to be more motivated and efficient, and they are less likely to experience burnout or take time off. Additionally, they tend to be more loyal to their employer and have a positive impact on company culture.
There are many different factors that contribute to employee engagement, including job satisfaction, company values, and leadership style. Creating a culture of engagement can be a challenge, but it is often worth the effort as it can lead to a more positive and productive workplace.
Why Does Employee Engagement Reduce Turnover?
Employee engagement has been shown to have a positive effect on a number of business outcomes, including reducing employee turnover. There are several reasons why this may be the case:
- Engagement leads to employee satisfaction and a sense of connection to the workplace. As a result, workers are less likely to look for new opportunities elsewhere.
- Employees that are engaged are committed to their work and willing to go the extra mile. This can lead to improved job performance and more interest from customers or clients.
- Employee engagement leads to having a stronger sense of team spirit. This can create a more enjoyable work environment and make it easier for employees to stick around.
How Does Employee Engagement Affect Turnover?
Here are some key statistics that demonstrate how employee engagement affects turnover:
- In 2020, only 36% of employees were engaged and 14% were actively disengaged with their work.  Disengaged employees are less likely to be productive and more likely to leave the company. In addition, disengaged employees may spread negative attitudes and behaviors throughout the workplace. As a result, companies with high levels of employee disengagement tend to have higher employee turnover rates.
- 61% of employees experience burnout at work.  When employees are burned out, they are less likely to have a healthy work-life balance and experience fatigue, absenteeism, and job dissatisfaction. They may also struggle with concentration and decision-making, and their work may suffer as a result. In extreme cases, employee burnout can lead to workplace accidents and a high employee turnover rate.
- 96% of workers think that demonstrating empathy is an important aspect when increasing employee retention.  When managers take the time to understand their employees' perspectives and needs, it fosters a sense of trust and respect and leads to healthy organizational culture. And when employees feel heard and understood, they're more likely to be engaged and motivated. This is especially important for having low employee turnover rates, as employee recognition leads to staff being less likely to leave their position.
- Employees with a sense of purpose at work are over 3 times more likely to stay with their current companies than those who don’t have that feeling.  When employees feel like their work has meaning and contributes to a larger goal, they are much more likely to be engaged with their work and committed to their organization. On the other hand, employees who do not have a sense of purpose are more likely to be disengaged and less likely to stay with an organization for the long term.
- Companies that engage employees actively have an 18% lower employee turnover.  This is especially true when it comes to providing learning and development opportunities to your staff. Employees who feel like they are constantly learning and growing are more likely to stick around. Conversely, employees who feel stagnant are more likely to look for new opportunities.
- 33% of workers leave their jobs to look for new challenges.  When employees are not given the opportunity to take on new challenges, they may become frustrated and decide to leave their current company in search of a more stimulating work environment. In addition, a lack of new challenges can also lead to a loss of motivation, less engagement, and more likelihood to be interested in pursuing other opportunities.
- 85% of employees are more motivated when communication at work is effective.  Sharing of information within an organization is essential for ensuring that employees are kept up-to-date on company news and policy changes. Poor internal communication can lead to confusion and employee concerns, and it can ultimately contribute to high employee turnover. When employees feel out of the loop, they may become disengaged and start looking for new opportunities. Additionally, if employees are not given clear direction or updates on organizational values, company mission, and goals, they may become concerned about their own job security.
How Do You Encourage Employee Engagement and Reduce Staff Turnover?
There are a number of ways that management and HR professionals can encourage employee engagement, avoid high employee turnover and increase employee retention:
- HR professionals should focus on hiring the right people in the first place. This means taking the time to really understand the needs of the position and what kind of person would be a good fit. It also means being honest about the salary and benefits package upfront so that there are no surprises down the road.
- The HR team can identify the root causes of job dissatisfaction and develop strategies to address them. For example, they may recommend introducing new policies or benefits that improve work-life balance or redesigning job roles to make them more challenging and rewarding.
- Human resources professionals can provide employees with guidance and support during periods of transition, such as when they are changing jobs or taking on new responsibilities.
- Senior management should offer employees opportunities for career development and growth. This could include providing training and development programs, as well as opportunities to move up within the company.
- Managers should give employees voices in the decision-making process. This could involve soliciting their input on company policies and procedures, or even giving them a say in what new products or services the company offers.
- Everyone in the organization should contribute toward a positive work environment by fostering a culture of open communication and respect. When employees feel like they are valued and their opinions matter, they are more likely to be engaged in their work and less likely to leave the company.
1 Harter, 2020. https://www.gallup.com/workplace/321965/employee-engagement-reverts-back-pre-covid-levels.aspx
2 Career Builder, 2017. https://press.careerbuilder.com/2017-05-23-Do-American-Workers-Need-a-Vacation-New-CareerBuilder-Data-Shows-Majority-Are-Burned-Out-at-Work-While-Some-Are-Highly-Stressed-or-Both
3 Higginbottom, 2018. https://www.forbes.com/sites/karenhigginbottom/2018/05/31/why-empathy-matters-in-the-workplace/?sh=61768b571130
4 Schwartz & Porath, 2014. https://www.nytimes.com/2014/06/01/opinion/sunday/why-you-hate-work.html#:~:text=Purpose%3A%20Employees%20who%20derive%20meaning,times%20more%20engaged%20at%20work.
5 Harter, 2017. https://www.gallup.com/workplace/231668/dismal-employee-engagement-sign-global-mismanagement.aspx
6 Korn Ferry, 2018. https://www.kornferry.com/about-us//press/breaking-boredom-job-seekers-jumping-ship-for-new-challenges-in-2018-according-to-korn-ferry-survey
7 Knilans, 2018. https://www.tradepressservices.com/internal-communications/