Over the last few days it has been interesting for me to see a number of discussions pop up on blog sites and social and business networking relationship sites that I belong to about the correlation between employee retention and employee satisfaction. The dialogue includes questions like:
- Is there a direct or indirect correlation between employee retention and employee satisfaction?
- Which is the more important measurement to employers; employee satisfaction or employee retention?
I will respond to those questions the same way I responded to them on the sites- assuming that there is a direct or indirect correlation between retention as measured by average tenure and satisfaction is potentially dangerous and misleading.
Employee retention at its most basic is a function of turnover. How many people join and how many people leave your organization over a given period of time. If you want to be more sophisticated you might measure “regretted turnover”, those you wanted to keep; versus “unregretted” turnover, those you didn’t mind seeing leave. I would concur that those can be very different.
Where I get lost is drawing an absolute correlation between an individual’s length of employment and their perceived “satisfaction”. Employees stay in organizations for a lot of reasons, satisfaction may even be one of them. Unfortunately, there may be other reasons as well-
- They lack the motivation to look for a “better” job.
- They are in a situation where they are tied to the position/geography for family or other reasons.
- They are “invested” in staying long enough to qualify for a retirement plan, stock options, or other “retention” devices.
I have found over my experience as a manager and consultant for the last 30 years that there is something worse employees can do then leave when they are unhappy- they can stay! They can stay and take up room. They can stay and “poison the well” for others. They can stay and impede the ability to promote other more capable staff.
Another “measurement” that I ponder is “experience”. Even in my own case do I really have thirty years of experience, or do I have one year of experience repeated thirty times?
I don’t want to be misunderstood in that employees who have a long term relationship with their employer or who have been performing their responsibilities for a significant period of time are drones- I am just saying let’s examine a different measurement.
I would challenge you to measure engagement. In my context engagement is the employee who comes to work in your organization with a clear sense of their personal contribution to the goals of the company and the connection to their own goals. They share a vision with you. They have moved from what my partner and I call compliance to Commitment™.
Commitment isn’t measured in years or tenure; it is measured in productivity and enthusiasm. We have all seen organizations like Google, Starbucks, Les Schwab, and the “old” Nordstrom’s. These companies almost resemble a cult. They believe in the mission and they come to work every day prepared to do their part.
Whether or not the current administration is prepared to acknowledge it or not, we are in a recession. I believe that many more employees given the opportunity are going to “hunker down” and “ride it out”. I also believe the world is getting smaller and as I commented to a colleague, “we are running out of third world economies to exploit”. We are going to have to face into the challenges of engaging our employees to see productivity and margins increase in the face of a global economy.
Moving your organization from Compliance to Commitment™ is hard work, but it can and has been done.
So in parting I would leave you with this thought- By all means continue to measure and track, because as they say what gets measured gets done! I would just caution you- be sure that you are measuring the right things and interpreting the results correctly. You get the behavior you reward, if you manage and reward for excellence you will achieve it. If you measure and reward tenure, you will get that. They aren’t the same.
Download the PDF (22KB)