Reducing Turnover With Employee Engagement Statistics

By Bradley Wilson - November 21, 2018

Employee engagement has become increasingly important to HR and business leaders ever since the connection between engaged employees and higher profit was demonstrated in the early 2000s. Engagement impacts profits on several levels: highly engaged employees tend to be more productive and deliver better service—which in turn increases customer loyalty; they are also less likely to seek employment elsewhere, saving on recruiting, hiring, and training costs.

As the unemployment rate has plummeted over the past several years, engagement has taken on even greater importance as businesses seek to retain talent. Recent employee turnover statistics show that median employee tenure in the U.S. is only 4.2 years. In a labor market where 65 percent of employees are confident they can find a better position that pays more, businesses face big challenges in combating voluntary employee turnover.

Many companies’ intent-to-stay scores have shifted toward neutral in 2018, across a variety of business sectors. This suggests the shift is not due to internal factors, but is the result of employee awareness of historically low unemployment rates, increasing wages, and higher consumer confidence. In this competitive environment, it is more important than ever for leaders to use the data at their disposal to understand these trends and manage the factors within their control to retain critical talent.

Employee engagement statistics are increasingly useful in this tight labor market for identifying and addressing factors that affect retention. This post will examine three ways you can improve your own company’s employee retention statistics with the help of engagement data.

See how smart people analytics can help your organization increase employee engagement and retention. Sign up for a demo from Perceptyx.


Interpreting Employee Engagement Statistics For Clarity

Engagement is an outcome of the work experience characterized by pride in the company, willingness to recommend the company, intrinsic motivation or flow (enjoyment of the work), and intent to stay.

All of these factors are important, because none of them tell the whole story individually. For example, high pride scores paired with low intent-to-stay scores may indicate that some employees are using the company or experience to boost their resume, but are not committed to the company. Low scores on any of these measures of engagement correlate to lower employee retention statistics.

1. Predict Voluntary Attrition & Attrition Risks

It’s useful to know the factors that influence intent to stay, since they identify areas the organization can focus on to improve engagement and retention. But there is one direct question that predicts employee retention better than any other: “I intend to stay with the company for a least the next twelve months.” Employees who leave typically score much lower on the “intent to stay” question on surveys conducted during their final year with the business—as much as 30 to 50 points lower than their colleagues who remain with the company.

While the intent-to-stay question might appear to be a case of closing the barn door after the horse has escaped, it holds great predictive power and is useful for leveraging retention strategies. Decline over time in intent-to-stay scores is a leading indicator of increased voluntary attrition; when leaders see this, they have the opportunity and obligation to intervene.

2. Identify Attrition Risks

Responses to the intent-to-stay question can be further analyzed by segmenting employee populations by level, function, job family, tenure, and other metrics to help identify the groups most at-risk for voluntary attrition. Leaders can then take action to address the factors impeding engagement with those groups in particular.

Companies may see engagement bottom out and attrition spike at different points along the employee lifecycle. The key point is that the two statistics are linked, and they can help leaders predict future behavior and respond appropriately.

3. Use Post Hoc Analysis Of Employee Turnover Statistics To Inform Retention Strategies

As with the intent-to-stay question, post hoc analysis—comparing survey responses of employees who have left the organization to those who stayed—can be used to build a data profile of the employees most likely to leave. Then, you can identify other groups with similar profiles and intervene as necessary to prevent future attrition.

This type of analysis looks at groups in aggregate to determine similarities and differences; individual responses, even those of employees who have voluntarily left the business, should never be revealed.

Though the theme of this post is using engagement data to reduce voluntary attrition, it is also important to recognize that not all turnover is bad. Employees who are disengaged but remain in their jobs do not advance the organization, and may need to be managed up or out of the business. The focus should be on retaining top performers and key talent; encouraging diversity and inclusion; and building a leadership pipeline. For these employees, zero attrition may be the goal—but it shouldn’t be the goal across the entire organization.

Looking for ways to increase engagement and retain key talent?

At Perceptyx, we use powerful people analytics to help businesses identify and address barriers to engagement and corresponding attrition risks. Get in touch and let us show you how we can help you improve your employees’ engagement—and your bottom line.

Download Now: The Engagement Hack: Essential Best Practices for Managers


We promise that we won't SPAM you.