Employee turnover is a massive headache for employers looking to fill up empty spots, but it also has a significant economic impact too. The cost of turnover for an entry-level employee can be estimated between 30-50% of their salary. As the position becomes more important, the losses incurred also increases, with a high-level employee leaving costing 400% of their salary. Losing employees in this manner implies that the accumulated losses amount to a significant number. If a company loses out on even twelve employees within a year, their losses can come to a total of $1.5 million.
In such a case, companies are rightfully concerned about employee retention and additionally keeping in mind the competition for talent. The anxiety for talent shortage has increased by 78% in business groups. Organizations are afraid of losing any talented employees and doing everything in their power to source and retain employees, even if it means poaching them from direct competitors. Strengthening the team is the direct objective of each company and they can employ various means.
Therefore, in such a competitive environment, how can employers safeguard their companies from suffering due to high turnover rates? The answer lies in employee engagement.
What is Employee Engagement?
Employee engagement can be defined only in terms of employees themselves; engaged employees are those who align themselves with the mission and vision of the company and in return feel empowered and nurtured to do work that drives the company forward. Employee engagement strategies can encompass everything that urges the employee to interact with the company. It can be as simple as putting snacks in the breakroom or as a larger concern of diversity and inclusion in the workplace. The emphasis is not on the methods, rather the understanding of the company of the psychology regarding such efforts.
Statistics to Underline the Importance of Engagement
The correlation between employee engagement and retention is backed up by statistics. According to our study, the attrition rate of disengaged employees is 12 times higher over the same period of time.
To understand engagement strategies, one must first find out the root cause of disengagement. Based on our study, where factors that predict organizational performance outcomes were taken into consideration, only 32% of employees felt engaged in their jobs. Another study provides more insight into the reason for this disengagement. 80% of the disengaged employees were dissatisfied with their direct managers. While 70% of employees who doubt the leadership capacity of the seniors are generally disengaged. The reasons are valid since no one likes working under bosses who are micromanagers.
Though the reasons are not shocking, employers might be interested in knowing how such factors affect retention. 45% of employees have reported that they already are or would most likely be looking for other employment opportunities. 44% of millennials have discussed that they would likely leave their current position in the coming 2 years. From another perspective, 33% of senior leaders believed that there is a direct relation of employee engagement to profits.
Employee Engagement Policies That Benefit Employees
The approach of managers toward employees significantly impacts engagement levels. Engagement is not a reactive process but a proactive effort. The efforts towards employee engagement should always be ongoing by making apt use of analytical data. HR should also actively participate in all such efforts.
The Bottom Line
Leading companies understand the importance of engaging their employees and the profit they stand to earn from such efforts. If you want the workforce to be dedicated and passionate, you should be ready to reciprocate in kind and look after your employees. After all, engaged employees are happy employees and happy employees are productive employees.<< back to Blog