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Impact of employee engagement on retention

Impact of employee engagement on retention

Simply stated, engaged employees are less likely to leave their job. If an employee has no emotional commitment to their job, there is a greater chance that they will leave to pursue a job that offers, for example, higher remuneration or more flexible work conditions (Haid & Sims, 2009; Schaufeli & Bakker, 2004).

Research confirms that engagement lowers employees’ intention to leave. The Corporate Leadership Council (2004) found that the most engaged employees are 87% less likely to leave their organisation. The same study found that the 100 best places to work (according to their research) had an average voluntary turnover rate of 13% as compared with the average of 28.5% of other businesses in the same industries. What’s more, other large scale research has found that 12% of disengaged employees have no intention to leave, while that proportion rises to 66% in engaged employees. Similarly, over half of disengaged employees would consider leaving their current job for another opportunity, while only 25% of highly engaged employees would consider leaving. (Towers Perrin, 2003).

Considering that replacing an employee can cost one and a half times their salary, retention has a significant impact on an organisation’s bottom line. Not only can the costs of replacing employees be a drain on resources, but once new employees are in place they can take several years to generate the same revenue.

 


Sources

Haid, M. & Sims, J. (2009). Employee Engagement: Maximising Organisational Performance. Right Management.Retrieved 15 June 2011, from http://www.right.com/thought-leadership/research

Schaufeli, W.B. and Bakker, A.B. (2004). Job demands, job resources, and their relationship with burnout and engagement: a multi-sample study. Journal of Organizational Behavior, 25, 293-315.

Towers Perrin (2003). Working Today: Understanding What Drives Employee Engagement. The 2003 Towers Perrin Talent Report.Retrieved 15 June 2011, from http://www.towersperrin.com/tp/getwebcachedoc?webc=hrs/usa/2003/200309/talent_2003.pdf

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