Why there is a high engagement and turnover rate?

Employee engagement is a key ingredient of the workplace. When engagement is high, it can unlock many benefits at the workplace including increased productivity and satisfaction. 

It can also result in a high retention rate which further reduces the turnover rate. But, do you know there are rare case scenarios when an organization has both high engagement and a high turnover rate?  

Yes, 1 out of 5 companies have been seeing this pattern! 

Why it happens and what could be done instead? Let’s dive in further to explore more about this topic.

Engaging employees in the workplace

According to Wikipedia, an engaged employee is “fully absorbed by and enthusiastic about their work and so takes positive action to further the organization’s reputation and interests. An engaged employee has a positive attitude toward the organization and its values.” 

Employee engagement is mainly synonymous with employee satisfaction and experience. But, that’s not all! It is a complete journey i.e. from the hiring process till they leave their job. This includes day-to-day elements which are the result of both individual characteristics and factors related to their experience at the workplace. 

While it relates to ‘State of being’, it also can be said to be ‘Flow’. Since it is one of the reasons for improving performance outcomes. 

…. But engagement =/= retention

In simpler terms, Retention can be defined as when employees choose to stay on with their current organization. 

Retention is indirectly connected with the turnover rate. When retention is high, the turnover rate is low, and vice versa. 

Engagement and retention are indeed related to each other. They go hand in hand. However, they are different too. 

Let’s take an example to understand it further: 

Suppose you are working at a company. While you have no complaints about it, you see that the skills you possess right now need to be upgraded. 

What do you think would be the right thing to do? Either you ask your seniors if they can shift to another department or if it’s not possible you resign and look for another job. 

The other external factors may include low unemployment, the particular industry/sector that isn’t in demand, and upskilling. 

Although, it can also be due to internal factors. Such as lower pay, no recognition, no work-life balance, and so on. 

While engagement is more strongly related to connection i.e. co-workers and the sense of purpose you get from work. Retention is because of the contribution. It means opportunities to have an impact through work and recognition for efforts.

As a result, engagement and retention are different yet are impacted by your experience at work. This is the reason why engagement and retention are mainly used to track each other. 

But, still, it doesn’t answer how a workplace can have both high engagement and a high turnover rate

 And now coming back to the question, take a look at the diagram below: 

Source: WTW

As per the above graph, it can be seen that 37% of ‘Value Driven’ companies have employees who are engaged and want to stay. Here, Engagement and retention go hand in hand. 

While the ‘Value Drag’ companies are 30% where employees are disengaged and planning to leave. Here, you can see again that engagement and retention are connected. 

But, there is another case as well. In ‘Value Potential’ companies, employees are less engaged but want to stay with the company. It could be these companies either have older corporates that have relatively high tenure or they aren’t getting any other opportunities. (Or there could be other reasons as well!)

And now coming to ‘Value Risk’ companies that have both high engagement and high turnover rates. While it can be seen as a sign of success – These companies create ambitious people and they further lookout for new opportunities to advance their careers. 

This can also signify creating a pool of talented re-hires; since these employees are walking out voluntarily. 

However, the downside is the cost of turnover i.e. cost of hiring, onboarding, and training a replacement. It also results in a loss of productivity and a higher workload among the current employees. 

So, what can be done?

If you are seeing this pattern at your workplace constantly, here are a few of the steps you can take: 

Firstly, understand why it is happening: 

When you see this pattern at your workplace, you need to figure out the ‘Why’ behind it. While the reasons may vary, but few of the common ones include: 

  • They feel their opinions aren’t heard 
  • They believe there isn’t much of an advancement opportunities
  • They feel they aren’t rewarded fairly according to their efforts

To figure out the exact reason, take a look at what the employees who resigned (or resigning) tell you about. You can use an employee engagement survey (For eg: HuddleUp) to keep track of all of it. 

Source: WTW

See where the gap lies. 

But, this doesn’t mean that you need to get answers only from the one leaving. Have a continuous feedback survey at your workplace so you know what are your blind spots and how they can be improved. 

Another thing is that you need to take note of demographic segments as well. Are women in the organization leaving more than men? Why Freshers aren’t staying longer than six months? How come GenZ seems more engaged yet they resign after completing one year? 

Translate insights into action: 

Now, as you know the ‘Why’ behind it, it’s time to work on them. 

Suppose, you figure out that freshers are not staying longer due to the pay that doesn’t match the industry standards. While they learn the much-needed skills and opportunities, the salary isn’t enough for them. Another reason is the higher workload. 

What can you do here? You can have one-on-one meetings with them and understand their expectations. Know their opinions and look out the blind spots. 

Focus on these priority areas to reduce the turnover rate. You can start by creating action plans and walking on those steps. 

Bring change to the workplace: 

Now, as you know the reason and action plans, the final step is to implement them. 

But, implementing isn’t just the end of it! You need to track the progress continuously. 

For example, the freshers complain about the high workload. This can further result in no work-life balance. While you see that they are getting good learning opportunities, you need to understand what can be done so that it doesn’t get impacted while the workload is reduced. 

Maybe, hire more employees. Or delegate the workload accordingly? 

So, implement them on a priority basis and keep measuring the progress. 

         Note: This article was originally published on Linkedin.