There are many sound arguments for improving engagement with your employees. This includes better outcomes in terms of profit and productivity. Another good reason to do so is to minimize the rate of employee turnover.
When employees are engaged, they’re enthusiastic, active, involved and committed to their work. This all has positive outcomes for a company. The benefits can include ideas and innovation, high levels of customer service, and solid rates of growth.
Employees who have an emotional commitment to their job are less likely to leave it. And when you lose your employees at higher-than-average rate, the results can be disastrous.
A study by the Corporate Leadership Council found that engaged employees were 87 per cent less likely to leave their organization, and that the best 100 places to work had an average voluntary turnover rate of 13 per cent compared to 28.5 per cent experienced by businesses in their industry.
Do you know how engaged your employees are? There’s a good change they’re not.
According to a 2016 Gallup poll, 34.1 per cent of American workers are engaged in their jobs. A further 51 per cent are not engaged, while 16.5 per cent are considered to be “actively disengaged”.
Gallup also found that 51 per cent of workers are looking to leave their current jobs.
Retaining your employees has many benefits. When you have a high rate of staff turnover you lose corporate knowledge, there is a sense of unease and instability among your employees, morale is affected, and it costs your company money to recruit and train replacement staff.
The costs alone are enormous. It’s estimated that around $11 billion is lost annually due to employee turnover.
Depending on where your employee sits in your company hierarchy, there are large costs associated with replacing him or her.
It can cost as much 30 to 50 per cent of an entry-level employee’s annual salary to replace them; it can cost 150 per cent of a mid-level employee’s annual salary to replace them; and for high-level or highly specialized employees, the cost of replacing them can be as much as 400 per cent of their annual salaries!
Granted, there are always going to be reasons why your staff will choose to move on: life situations that change, moving cities, changing careers, seeking new opportunities or higher salary and benefits packages are among them.
However a study by Griffith Business school in Australia found organizational factors such as job satisfaction and engagement had more impact on workforce turnover than factors such as career change or retirement.
Without putting effective engagement strategies in place to win over the hearts and minds of your employees, you will not be able to stem the flow of employees jumping ship.