The real key to employee retention may surprise you

Last week, TINYpulse, the employee survey and engagement company, released its latest report on retention. Employee engagement in the United States and around the globe has been rather anemic—and for a long time!

When Gallup released its State of the U. S. Workforce Report in 2013, it found that only 30% of employees were “strongly engaged” with their companies, and that 70% of the U.S. workforce was “disengaged.” That 70% includes an “actively disengaged” cohort of employees – 20% of the U.S. workforce. The actively disengaged have significantly higher absenteeism, accident and turnover rates and are less likely to be productive.

Gallup estimates that active disengagement costs the U.S. economy $450 billion to $550 billion per year. Engaged employees, on the other hand, provide more discretionary effort, which leads to higher productivity, customer service and innovation.

When you look at the historical scores for employee engagement from Gallup, it is interesting that the numbers don’t change much over time, whether the economy is good or bad.  For example, since 2000 when Gallup began these reports, actively disengaged employee scores have ranged between 13% and 20% and engaged employee scores from 26% to 30%. What does change, however, are the job opportunities available to employees, and their willingness to jump ship in good times —like today!

What drives employee turnover?

According to TINYpulse’s latest report, which is based on a survey of 400 full-time employees across the U.S., there are five top drivers:

1. Supervisors can make or break retention. In addition to aligning employees to company strategy, providing clarity, treating employees with respect and being transparent, supervisors have a key role in engagement. Why? There is a strong link between employees believing they have lots of freedom to make decisions about how to do their jobs and their job satisfaction levels and retention rates.
2. Colleagues have a lot of power. TINYpulse found that peer respect and recognition play significant retention roles. Employees who cited low levels of recognition and respect from their peers were 11% less likely to stay with the company.
3. Culture Matters a Lot. Employees who give their work culture low marks are nearly 15% more likely to think about a new job than their counterparts.
4. All work and no play makes for employees that are ready to quit! Employees that are tired and burnt out are 31% more likely to think about looking for a new job than their colleagues who feel comfortable with their workload.
5. Grow or leave. Employees who report having access to either internal or external professional development were 10% more likely to stay with their current employer. Lack of cross-training results in employees being 10% less likely to stay.

Leigh Branham, the employee engagement consultant and author of The 7 Hidden Reasons Employees Leave, says in his book and seminars, “Employees don’t leave companies.  They leave managers.” He is correct.  He recommends that all managers actively work to engage their employees and have regular engagement discussions in order to match employee passions with the work of the company.

The findings of TINYpulse on the importance of supervision is similar to the findings of other researchers.

Back to Gallup. It recommends that companies select the right supervisors, and that means selecting supervisors who have the interest, personality and attributes to engage employees.  In their 2013 State of the U.S. Workforce Report, Gallup gives all companies this advice:

Instead of using management jobs as promotional prizes for all career paths, companies should treat these roles as unique, with distinct functional demands that require a specific talent set. They should select managers with the right talents for supporting, positioning, empowering, and engaging their staff.

Gallup also recommends that companies coach their supervisors on how to engage their employees and hold them accountable for it.

While engagement and disengagement percentages have not varied much over the years, many companies have figured out how to raise employee engagement. They benefit from the increased discretionary effort, productivity, customer service and innovation that come with it. These companies include the winners of Glassdoor’s Best Places to Work Awards. They are companies such as Google, Bain and Company, Nestle Purina PetCare, and F5 Networks. Employee engagement is at the center of everything they do.

What are you doing to retain your employees?  Are you focusing on your managers and their role in building engagement?

Victor Assad is a strategic human resources consultant and executive coach who works with key decision makers and human resource leaders on global talent management, accelerating change, leadership development, and other strategic initiatives, such as mergers and acquisitions and employee engagement. Contact Victor for a free one-hour strategy session at victorassad6@gmail.com. Visit Victor’s website at www.victorhrconsultant.com to download his free HR whitepapers and read more of his blog posts.