Having a high turnover rate is obviously very expensive, but there are many reasons why employees leave their jobs. Sometimes, life events are the contributing factor – an employee moves across the country, decides to go back to school, takes time away from work to raise a family – and turnover for these reasons can never be eliminated. But the majority of the reasons that people resign are entirely under control of the employer. Contrary to what some might think - salary does not buy loyalty. The most commonly cited reasons for leaving a job are related to engagement:
- A poor relationship with their boss: People leave managers, not companies.
- A lack of challenge and advancement opportunities: Your best employees are interested in continuous development.
- An absence of belief in the company mission: Employees want their work to matter, and they want to contribute to something that matters.
Billionaire and serial entrepreneur, Richard Branson, says on engagement:
“It should go without saying if the person who works at your company is 100 percent proud of the brand and you give them the tools to do a good job, and they are treated well, they’re going to be happy. If the person who works at your company is not appreciated, they are not going to do things with a smile. Effectively, in the end, shareholders do well, the customers do better, and your staff remains happy.”
Branson appreciates that his success is built on his employees. In his approach, the customer isn’t #1 – the employee is. If your employees are happy, he contends, your customers will be happy too. And he’s right. Gallup reports that highly engaged workplaces see 20% higher sales, 21% higher overall profitability, 10% higher customer ratings and up to 67% lower turnover. Clearly, focusing on engagement can increase retention in meaningful ways.
Trying to increase retention at your organization? Download our infographic to discover 5 proven strategies to reduce employee turnover.
The trend of engagement spending on ping pong tables and free lunch seems to be disappearing. Which is good. A ping pong table might make the office more fun, but it doesn’t do much to impact overall engagement. Here are some statements that engaged employees agree with:
- They have opportunities to grow
- They have been praised recently
- Their development is actively encouraged
- Their opinions count at work
- They get along with their colleagues
- They view their job as important to the company
- Their manager cares about them
By comparison, only a small number of disengaged employees agree with the same statements.
Pro Tip: We asked 10 HR thought leaders about which people analytics metrics were the most vital. Check out their responses here, and discover why turnover, retention, and employee engagement are the most popular topics.
These are the things that matter when it comes to engagement. It’s up to the manager to foster these things. Employers need to provide support to employers in good times and bad, giving praise and recognition when things are going well, and helping employees overcome obstacles when things are going poorly. It’s also up to managers to foster transparency, cohesion and equality on their teams. When it’s done right, building an engaged team can drastically reduce a high employee turnover rate. That’s good for you, your company, and your customers.
Richard Branson says he’s never taken a course in HR or even read any books on the topic. But he certainly understands how important engagement is to the heath of a company.
There's an old comic strip - an exchange between a CFO and a CEO. The CFO says “what if we spend all this time and money investing in our people and they leave?” The CEO responds, “what if we don’t and they stay?”
Or, in the words of Branson: “train people well enough so they can leave; treat them well enough so they don’t want to.”