Director of great{with}talent, Ron Eldridge, answers ‘what is employee engagement’ and talks about why companies need to reassess their priorities.

What is Employee Engagement?

The widespread imbalance between recruitment and retention shows that organisations have got their priorities wrong, says Ron Eldridge. He calls for a strategic shift to address this anomaly.

Understanding Employee Engagement

Staff retention is a key issue for HR practitioners. UK organisations spend billions of pounds attracting, recruiting and developing their staff. Yet research shows that more than half of all new starters leave their organisation within two years – and one in four leaves within six months.

The result is constant recruitment which is not only time consuming, it is also expensive. Our research shows that nearly 70% of organisations find it difficult to replace staff and, according to the CIPD, it costs an average of £4,333 to replace an employee.

What is staggering is that organisations seem content to let this happen. Many are very clear about the time and money they spend on recruitment. But when you ask whether they have a strategy or a budget in place to retain the people they have spent so much time and effort recruiting, the answer is invariably ‘no’.

Why is HR so one-sided? Why are massive budgets allocated for the attraction, recruitment and selection of staff but not for retention?

This emphasis on recruitment is matched by the plethora of consultancies, candidate tracking systems and psychometric tools. They all offer to sift, assess and select the most appropriate people for the role, thereby conferring a competitive advantage in terms of ‘talent’.

Given this established recruitment infrastructure, it is inevitable that HR practitioners are under considerable pressure from the business to fill the gaps as quickly as possible. However, the truth is that the successful recruitment of talent will procure very limited returns without complementary staff retention strategies.

Check out the Exit Process Cost Calculator.

Shifting the Paradigm

Clearly, it is in an organisation’s interests to engage and retain employees. At the very least, a committed employee will be more motivated and will therefore impact more positively on customers and colleagues.

To develop an effective retention strategy, organisations need to address the imbalance in HR investment to encompass the lifecycle of an employee throughout their tenure at an organisation. This means they need to understand the psychological insights around employee commitment.

But what factors make for a more committed workforce?

Key Factors

At great{with}talent we’ve identified three main areas which form the psychological contract between the employee and the employer: ‘Psychological growth needs’; ‘The everyday experience’ and ‘The transactional relationship’.

The first of these – ‘psychological growth needs’ – deals primarily with job satisfaction and the opportunities to develop personally. It centres on individuals’ need to learn and grow. Boredom and stagnation are problems in terms of productivity.
They have also been linked with stress and poor health. The perception of one’s ability to do a good job comes from a continual process of learning, developing, trying new challenges and experiencing feedback to inform one’s self-assessment.

‘The everyday experience’ relates to the extent to which the employee’s beliefs and values match those of the organisation. Moreover, the ability of the individual to maintain a healthy work-life balance and a flexible approach to work.

‘The transactional relationship’ revolves around the extent to which the expectations of the employee have been met – both in terms of job content, training programmes and career management.

And yet, these areas are all too often ignored in the hiring process. Focus is given to the skills and behaviours required for the role. There are not to be ignored of course but without due consideration to these three factors, there can be serious ramifications on employee turnover and the health of the organisation in general.

Dispelling the Myths

So why do people leave organisations?

There are many glib statements that trip off corporate tongues to explain this. For example, it is often said that people leave their boss, not the organisation.

Whilst a poor manager or an unworkable relationship with a manager clearly has an impact on staff retention, the facts show that this is not the primary driver behind an employee’s decision to leave.

Our evidence shows that only 14% of people leave because of ‘dissatisfaction with their manager’. Organisations need to stop explaining away employee turnover with myths such as this. Instead, they need to base interventions on what really makes employees more committed and engaged.

Contact great{with}talent and find out more about their TalentEngage employee engagement surveys.

(Article originally published in HR Zone. Main image from Business News Daily)