Employee engagement and retention are hot topics on the minds of business owners these days. With a struggling economy and lots of unfilled job positions, keeping your best employees on board and happy is more important now than ever.
In this post, we’ll help you understand the differences between “engagement” and “retention” as well as provide a couple of practical steps for making your workplace somewhere that your team looks forward to staying for a long time to come!
Employee Engagement and Retention
Employee engagement and employee retention are two different things. However, one directly affects the other so it’s important that you focus on both if you want to create a positive workplace culture and avoid high levels of turnover.
Employee engagement refers to how connected your employees feel to your company and their coworkers. Do they share a sense of unity with the overall mission of your organization? Do they feel like they and others they work with are part of a cohesive team? Or do they feel disconnected, isolated, and generally uninterested in anything other than putting in their time and collecting a check?
To the degree that your workers are engaged in what they’re doing and why your company exists, they are more likely to be satisfied with their jobs. As a result, they’re much less likely to be interested in working somewhere else.
(We’ll cover some tips on improving employee engagement and motivation in just a minute.)
Employee retention is a measurable statistic that tracks the level of turnover that your company is experiencing. Ideally, you want that number to be as low as possible. That’ll mean you’ve got great people working for you who are helping to grow your business and having a great time doing it.
We covered 5 creative ways to retain employees and keep your company strong in another post recently. Check it out for some helpful tips that could help you avoid a lot of headaches!
Employee Engagement and Motivation
Effectory, an employee feedback company based in Europe, describes the difference between employee engagement and employee motivation. They sound like two words describing the same thing, but the differences are important to note.
In their article on “Engagement and Motivation: What Is the Difference?” they say, “Engagement is a sense of purpose, belonging, and commitment to an organization, whereas motivation is the willpower and drive to act on those feelings. Employee engagement serves as a foundation for your employees to do their best work, while motivation is the fuel or energy required actually to do it.”
To fuel your employees, they need to be properly motivated. It’s important for managers and small business owners to understand that there are two different types of motivation (and this is true for every area of life…not just the workplace): external and internal.
External motivation (also known as extrinsic motivation) comes from tangible rewards. On the job, these are things like bonus checks, promotions, overtime pay, extra days off, awards, prizes, office celebrations, etc. In life, they’re the factors outside yourself that drive you to want or need something to change.
Internal motivation (also known as intrinsic motivation) is found in the way something makes us feel. If a social situation makes us uncomfortable, we’ll either do something to make it better (change the conversation) or do something to make it stop (leave the area). At work, internal motivation usually manifests itself in taking pride in doing a good job, successfully taking on a challenge, or knowing that we’ve helped our coworkers or customers in a positive way. When those things happen, we experience endorphins and dopamine rushes that make us want to do more of it.
Motivation, regardless of whether it is external or internal, can also be negative. Beware of being the kind of leader who has to use negative reinforcement to get results. In a crisis situation, it may be necessary to bark orders and threaten consequences in order to avoid disaster. But as a rule, negative motivation does not contribute to long-term employee satisfaction and contributes to much lower retention rates.
Employee Retention Committee
As we mentioned in another post on a similar topic, one of the best ways to combat low job satisfaction and help your employees succeed is to listen to them. We said it before, but it’s worth repeating: “When they feel like you know them, value them, and understand them they are far less likely to simply clock in, barely work, complain about it all, then eventually leave you for some other job.”
We get it! As an owner or leader within your company, the demands on your time can be overwhelming. Asking you to have an open door policy where every employee can interrupt you at all hours of the day to air their concerns/complaints could be counterproductive. After all, there’s only so much of you to go around.
That’s where creating an Employee Retention Committee (ERC) could be a smart move for your business. If the employees you oversee are more than just a few people–and especially if you have several different departments operating within your business–having a representative from each department serve on an ERC could go a long way towards helping you stay on top of keeping your employees happy and productive.
An ERC doesn’t have to be a complicated, highly structured thing. Even if they simply meet informally from time to time throughout the year, they’ll become a valuable sounding board to help you measure where any issues are in your company when it comes to employee retention.
Allow them the freedom to conduct employee satisfaction surveys, discuss complaints they’re aware of, and come up with solutions. When your team realizes that you have empowered a group of their coworkers to help make your company a better place to work, they’ll instantly feel more valued and respected…two huge factors in keeping great employees.
As you work on growing your company, you already understand the value of having goals to work towards. You also probably know from experience that it’s important to have a plan in order to reach those goals. It has been rightly said that “a goal without a plan is just a dream.”
Employee retention deserves to be an area of your business where you set measurable goals and put a plan in place to achieve them. After all, without quality employees, you simply won’t be able to achieve many of the other goals you’ve set for your company!
HRShelf.com lists several great examples of employee retention objectives:
- Reduce Turnover Headaches
- Reduce Hiring and Training Time
- Improve Morale
- Improve Productivity
- Improve Customer Experience
You may add other goals depending on the nature of your specific business or industry. However, the main thing to remember is to work with your employees (or your ERC) to develop specific, measurable, achievable, relevant, and time-bound action steps for each of the goals you come up with. That will ensure employee buy-in as well as increase the likelihood of success in achieving them.
Your Guide to Employee Engagement and Retention
If you want some help taking your HR to the next level in order to create an outstanding place for your team to work, we can help!
For over 40 years, we’ve helped small businesses and nonprofit organizations grow through HR & Payroll Support as well as CFO Consulting…in addition to the usual financial expertise you should get from a good CPA firm. Find out what it means to “expect more from your CPA.” Schedule a call today!