Staff Retention & Employee Engagement. What’s the Relationship?

This topic is one that is often talked about when we discuss the effectiveness of employee engagement surveys. Staff retention, employee engagement, and how they are linked, have become increasingly more talked about which has made companies more aware of the need to analyse both in order to make effective organisational changes. Here we will explore the relationship between these two variables, how they are linked, and why they should be at the forefront of your mind when thinking about your organisation’s productivity and long-term growth.

First up, what do they mean?

It’s easy to get caught up in the business lingo, so what do employee retention and employee engagement mean? 

Employee retention is the organisation’s ability to retain or keep an employee long-term. Lower retention rates mean that employees tend to leave more regularly, whereas higher retention is that employees are less likely to leave the company often. Organisations tend to aim for higher retention rates, as the hiring and onboarding process of an employee is expensive, and losing an employee, even for a short period of time before you find their replacement, can decrease productivity as existing employees take the brunt of another person’s tasks and responsibilities.

Employee engagement is how engaged an employee is with their organisation. Positive engagement can differ from all staff members as not everyone may value the same things but generally, engagement is when staff members are invested in the organisation, believe and support the company values, and are content to continue working there for a long time. When employees are engaged, they tend to have higher productivity, better teamwork, they are less likely to burn out and they can enhance your company culture.

Lower Engagement = Lower Retention

Unfortunately, if your organisation doesn’t have many engaged employees, the company tends to have a higher turnover rate and a lower retention rate as staff move on more often looking for an organisation that will engage them more. This doesn’t have to mean that the company is bad, but that it has a lot it can improve on. 

Lower engagement usually means a lower retention rate because staff who are leaving don’t feel as much of a bond with the organisation, they may not have many incentives to stay or don’t see a future or satisfaction with their work or development path alongside the company. This is why even pay increases may not keep staff in the organisation because salaries are just one part of what may be keeping an employee engaged but it’s not the entire package. Lower retention rates are also harder to overcome, as it becomes harder and harder to build a positive organisational culture when employees are frequently leaving, setting a negative tone which can make other employees reconsider their engagement too. 

How To Increase Your Engagement

The thing about engagement is that no matter where you are in your organisation, whether you’re a start-up with two employees or an old establishment with over a thousand; it’s always going to be important and more cost-effective to work towards improving engagement at all employee touchpoints. One of the best ways to evaluate your current staff engagement is to conduct an employee engagement survey! 

These surveys are written and made for staff members to fill out and let them have the opportunity to say how they feel about the organisation, what could be improved on, and what they look forward to the most. Conducting a survey alone can increase engagement as staff members feel more heard and see the potential support from the company to create real change on areas that can be improved on. Not every organisation is going to have the same focus areas to improve their employee engagement. 

Sure, it would be easy to say; every company must have company-wide laser tag tournaments to improve work culture and give out awards to best-performing employees weekly, but that’s just not the case. Increasing your engagement is important but not knowing what to action to increase it can backfire and end up being costly. Flexibility and care need to be taken, not just for short-term solutions but long-term staff retention and company growth.

Contact us today to speak with a consultant about how Pathways Australia can help your organisation improve staff retention and employee engagement.