People & Culture

Employee retention is the wrong measure of employee engagement. Here’s why.

If your key employee engagement metric is employee retention, you're worshiping a false god.

Whether they understand or can define the term, people want to feel engaged at work. There’s nothing like the feeling of getting home after a good day’s work, tired from the day but knowing you achieved something great for a company or cause you believe in and want to succeed.

Great cultures that foster great employee engagement aren’t easy cultures, they’re just cultures. They are places to work where great things get done against all the odds. Places where people don’t always see eye to eye but passionately work to the same goal. They are by definition, “great places to work.”

So when we don’t have that, when things grind a bit slow, when you feel the leadership isn’t doing what it should, when you feel the wrong people are being rewarded, when you stop believing in the vision then you become disengaged. And when you become disengaged, as long as you have options, you start looking for another job – or maybe just keeping your eyes open, you know – just seeing what else is out there.

So there is absolutely a link between employee disengagement and higher than optimal employee attrition. So if you reduce levels of employee disengagement then you will reduce attrition.

But if your key engagement metric is employee retention, you’re worshiping a false god.

I’ve learned that lower attrition, or improved retention depending on which way you look at it, is a positive by-product of employee engagement and it should not be your primary goal.

And that’s because too many other things can also reduce employee retention. And they are bad things, bad things indeed.

Removing accountability, reducing ambition, and lowering standards – they all have a dramatically positive impact on retention. Unfortunately the wrong people stay – the good people, who want a challenging, exciting job that they are engaged in, well they leave pretty quickly because they see average performance being rewarded and they feel the results of the team reduce.

But people who are stuck in a rut, disengaged, unhappy and have average performance, they stay because their jobs just got easier.

Increasing pay is also a key way to lower attrition and if you use it selectively, only on those that you think might jump ship, then you can make it more affordable. Which leads to average people being paid above average wages and an increasing sense of unfairness in the workplace which also causes your best people to leave (and never think that pay is private because I am certain it is not).

I liken an obsession with retention/attrition stats as the same thing the medical profession does when it tells us to change what we eat or do so we can live longer. Duration, time – whilst easy to measure is not the be-all and end-all of things. Give me a short life lived well and enjoyed over a long life of pain and unhappiness any day. And the same goes for our people.

I want Reward Gateway to be a place where people can come, learn, grow, develop, and do their best work. I want them to achieve things that they never thought possible and I want them to go to bed often thinking “Wow, I’m knackered but damm we did good work.” And I want them to do that for as long as they are happy and engaged with us and for as long as we have the role at the level they need where they can do that to their best. Whether that is two years or ten, I don’t kid myself that it needs to be forever.

And that’s why for the whole decade that we’ve been around, I’ve never wanted to track our retention or leaver stats

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