10 Important Factors to Improve Employee Retention and Engagement

Wondering whether employee retention and engagement matter to your organization’s success? Nothing will bring home their importance the way these two facts do.

Firstly, close to 90% growth leaders agree that happy employees yield happy customers and 1.8x faster revenue growth. Secondly, seven in 10 employers are globally struggling to find the right talent.

That said, skilled workers have more options than ever before. So, retaining top talent and forming a culture of employee engagement is no longer a luxury. It's a critical business imperative!

High employee turnover rates don't just disrupt workflow. They also:

Incur significant recruitment costs
Have high onboarding costs
Damage your company culture
Hinder long-term growth

The good news?

By prioritizing employee engagement and retention, businesses of all sizes can unlock the secrets to an engaged and committed workforce.

One that’s more productive, innovative, and invested in the success of their organization. Ideally, they will champion your company culture, act as brand ambassadors, and contribute to a positive and collaborative work environment.

Ready to unlock the power of a thriving workforce?

10 key factors to improve your employee retention and engagement

This blog post delves into 10 key factors that can significantly enhance employee retention and engagement within your organization.

From offering competitive compensation to creating a positive workplace culture, we'll explore actionable strategies to help you build a loyal and motivated workforce.

It also demonstrates how you can power up your efforts with Colleague Connect to create a positive and supportive work environment where employees thrive and contribute to organizational success.

1. Support work-life balance

Supporting your team to maintain a good work-life balance can increase job satisfaction and boost productivity.

In a recent survey, 59% of Millennial employees said they were currently experiencing burnout. Burnout is a type of work-related exhaustion that’s often triggered by stress. If burnout isn’t managed, your staff won’t perform at their best. They may even leave the company.

So, what can you do to support your employees’ health and wellbeing?

Start by offering them free optional resources like fitness classes, music therapy, and healthy eating courses. These types of activities can help your employees manage their mental, physical, and emotional health.

The way we work has changed, and more companies have pivoted toward remote and hybrid options. When you give your employees flexibility, they'll be able to juggle their home and work commitments.

And, if you reduce commute time and let your team members take time off for family obligations, they’ll usually be more loyal to your company.

You’ll show your employees that they’re valued by offering flexible options. After all, more than four of five people who have stuck to a hybrid work model over the past two years want to retain it.

2. Mentorship and development opportunities

You can also boost employee retention and engagement by giving them opportunities to grow. Some companies hire from within, and this is a great strategy to motivate hardworking employees. Many companies start mentorship programs with the goal of increasing retention and internal mobility.

Michelle Ferguson, global transformational executive and strategic advisor who has launched several mentoring programs within global organizations reveals how engagement surveys and retention data clearly showed the impact of mentoring programs.

For newer generations of employees like Millennials and Gen Z, having mentors and coaches is high on their priority list. Gallup’s report on high-development cultures showed the shift in what the workforce wants when it comes to their growth. In the past, employees were fine with a boss. Now they want a coach. Instead of just a paycheck, they want to find purpose in their work. Instead of an annual review, they want ongoing conversations with peers and mentors about their growth and development.

This isn’t without reason. Mentors are crucial to employee development. However, only 31% of companies provide mentorship programs. Formal training that includes courses and seminars have their place, but only 25% of employees in a McKinsey survey believed that their training improved their performance in a noticeable way. On the other hand, when asked about capability building, 20% of employees cited a lack of resources for training and development as an impediment.

Upskilling and reskilling our workforces will become a norm for organizations that want to be resilient and prepared for the future of work. In a survey of HR leaders, 62% said employees would need to reskill or upskill annually for an organization to maintain a competitive advantage.

Colleague Connect plays a vital role in supporting mentoring programs. The platform allows employees to connect with mentors who can provide guidance and support throughout their career development journey.

Access to experienced mentors empowers employees, gives mentees a sense of purpose, and increases job satisfaction, ultimately leading to higher retention rates.

3. Give them the right tools

If employee retention and engagement are priorities, you need to ensure that your staff has the tools needed for success.

The solutions you’ll need depend on how you run your business. For example, a remote workforce will have different needs than teams who collaborate in an office. Just remember, if you use cloud-based software, it’ll be accessible by employees no matter where they are.

What type of tools should you give your team? Look for centralized software that streamlines their daily tasks. For example, customer relationship management (CRM) software helps your employees communicate with customers and leads.

There are other tools to consider as well. That list includes telecalling software, accounting software, email management software, word processing programs, expense management software, and workplace manuals, to name a few. Project management software is ideal for scheduling tasks and setting deadlines.

For those using tools that rely on connectivity, security should be a priority. Make sure any software is updated regularly and customer data is stored correctly.

Your employees may ask for specific, preventative tools to boost security. For example, if your team handles sensitive data, they could benefit from a VPN service and antivirus software.

If your team works in person, set them up with ergonomic workstations and the latest technology.

Similarly, access to tech like AI drastically improves the ways of working. For instance, a digital health company started using an AI-enabled integrated system. It manages everything from budgeting, invoicing, time tracking, to scheduling meetings. The result was a boost in productivity, employee engagement, and performance!

Colleague Connect empowers employees to collaborate on projects and share ideas. Through it, they can also seek advice from colleagues with diverse expertise and backgrounds. In short, Colleague Connect helps companies create a culture of knowledge sharing and innovation. It ensures everyone has access to the resources they need to succeed.

4. Get leadership on board

Retaining top performers and fostering a culture of engagement is no longer a "nice to have" – it's a business imperative.

But the problem is only 25% of employees consider their organizations’ leaders to be engaged, passionate, and inspiring. Likewise, organizational buy-in is a roadblock to 33% of employees when it comes to building resilience.

If you want to present a compelling case to your leadership, it's best to back it with data and success stories. Highlight the ROI of employee engagement and retention initiatives. For instance, Hilton’s well-being program, translated to saving 13,558m hours since its launch.

Your data-driven plan should outline proposed talent retention strategies, such as mentor match programs, wellness initiatives, or recognition programs.

Tailor your message to leadership's priorities. Focus on the specific challenges they face and how employee engagement can address them. Quantify the impact of employee engagement on key metrics relevant to your leadership team, such as customer satisfaction, sales figures, or productivity rates.

Don’t forget to emphasize scalability and cost-effectiveness of your proposed solutions.

Finally, highlight the role of technology in streamlining engagement initiatives. Like how Together can be a cost-effective tool for facilitating mentor matches, fostering communication, and tracking program effectiveness.

5. Provide ongoing feedback

Employees seek growth, recognition, and a sense of purpose. When asked about reasons for quitting, erstwhile employees counted not feeling valued by their organization or managers or as if they belonged among the top reasons. Interestingly, the employers thought transactional elements, like better pay, were to blame!

What does that tell you about the state of things? That there’s a communication gap.

Two things that can help bridge that gap are regular feedback and performance evaluations.

Some of its benefits include:

With clear and consistent feedback, employees can understand their strengths and weaknesses. It’s how employers can guide them towards continuous improvement.
Regular feedback demonstrates that an employer values their employees' contributions and is invested in their professional development. Knowing that motivates employees to strive for excellence.
Regular feedback sessions open communication channels between managers and employees. They can then discuss goals, challenges, and opportunities, strengthening their working relationship.

That said, managers should know how best to approach these conversations. After all, only 36% companies train theirs on giving and receiving feedback.

So, cultivate these best practices for best results:

Move away from a single, high-pressure annual review to regular check-ins throughout the year for timely and relevant feedback.
Use these instances for collaborative goal setting and development planning. Let employees feel ownership over their career growth.
Focus on specific behaviors or performance points, offering actionable steps, instead of vague generalities that leave employees feeling confused.
Boost employee morale and confidence with a balance between constructive criticism and acknowledgment of accomplishments.

6. Make the workplace fun and positive

Healthy, resilient behavior makes organizations better able to withstand major disruptions as witnessed in 2020–21. Close to 73% of companies with low values of resilience will go bankrupt in a year or two!

It won’t surprise you to know that your workforce and its engagement levels are closely linked to your company’s health. But when asked what employees would change at their current employer, 41% indicated it to be company culture and engagement.

If you suspect your organizational culture needs improvement, try these tips:

Encourage open communication–more on that below
Implement a recognition program to celebrate milestones, big wins, and individual contributions through public recognition, awards, or bonus programs.
Promote team building activities, such as via fun events, volunteer opportunities, or social gatherings.
Offer flexible work arrangements, health and wellness programs, and opportunities for professional development–anything that improves employee well-being.
Prioritize diversity and inclusion through unconscious bias training, mentorship programs, and diverse hiring practices.

7. Offer competitive salary

Remember that survey from above where respondents had to imagine one change to make their current employer a great place to work? About 28% mentioned pay!

Competitive compensation fuels employee engagement and retention in many different ways. For one, it lets your workforce know you value their contributions. The result is higher employee motivation and engagement.

Secondly, competitive salaries attract other qualified candidates. Soon, you’ll have a talent pool of engaged individuals who are excited to contribute to the company.

Thirdly, compensation will lower turnover rates when disengaged employees don’t leave you seeking better compensation opportunities. High rates can become a cost burden on businesses.

Hilton has been named the second best company to work for. One main reason for its popularity is how much it invests in employee professional development. It trains more than 75,000 new managers, promotes close to 60% hotel executive role trainees and 46% of General Managers trainees annually.

So, we know competitive compensation improves matters. Let’s talk best practices:

Full compensation means more than base salary. That includes competitive benefits, bonuses, and recognition programs.
Keep up to date about your industry and location’s salary trends through regular market research
Consider pay transparency policies for trust building and fairness

P.S. Don’t know how much about employee recognition programs? Use Colleague Connect for celebrating and recognizing employee achievements, from project milestones to work anniversaries

8. Incorporate effective communication strategies

Effective communication can result in a happy, engaged, and loyal workforce. That’s because when employees feel informed, heard, and valued, they're more likely to be invested in their work and committed to the organization's success.

Here are three main ways by which you can harness the power of communication:

Build trust with transparency

Keep employees informed about company goals, strategies, and any significant changes through:

Regular town halls
Company-wide emails
Internal communication platforms

Colleague Connect can serve as a central hub for company news, updates, and announcements. This transparency ensures employees stay informed and feel connected to the organization's mission and vision. The sense of alignment and purpose they feel can drive engagement and retention.

Encourage open communication at all levels by making leadership approachable:

Host Q&A sessions
Hold open office hours
Participate in internal social media groups

Finally, strive for transparency especially during challenging times. Address concerns directly, provide clear explanations for decisions, and avoid sugarcoating difficult situations.

Listen to understand

Create multiple avenues for employees to voice their opinions and concerns. Not every conversation needs to be face to face or within focus groups. So, conduct anonymous surveys or implement suggestion boxes to encourage open feedback without fear of reprisal.

Address concerns promptly

Communication should be two-way. So, when you receive employee feedback, acknowledge and provide timely responses. At times, the answer won't be what the employee was hoping for. Even so, outline any actions taken or explain the rationale behind decisions.

Establish clear and fair procedures for addressing conflicts within the organization. This empowers employees to voice concerns and seek solutions while maintaining a professional environment.

Only 27% of companies survey their workers about improving employee experience. Don't wait for issues to escalate before addressing them.

Actively seek employee feedback and proactively address any recurring concerns or areas of dissatisfaction. For instance, a global tech company uses a tool to predict the likelihood of employee exits. When the tool identifies an individual, the company leaders create an opportunity to approach and listen to that person’s concerns.

Use Colleague Connect to build connections

It provides a space for employees to connect with colleagues across departments, locations, and levels within the organization. This encourages cross-functional collaboration and opens pathways into potential peer learning and reverse mentorships.

9. Prioritize employee wellbeing

89% of workers in a 2021 study mentioned their work life worsening while 85% indicated their well-being had declined, and 56% felt their work demands had increased.

There’s a strong correlation between employee well-being and key business outcomes. For instance, healthy employees are less likely to miss work due to illness or be present but unproductive due to health concerns.

Employees facing wellbeing challenges are 4× more likely to want to leave their organizations. Employees who feel supported and cared for by their organization are also demonstrably more engaged and productive.

So, prioritizing their well-being demonstrates a commitment to employee welfare. It can lead to a more loyal and dedicated workforce.

Here are several ways you can make this happen:

Implement comprehensive wellness programs to address physical health through:

Fitness initiatives
Healthy food options
Ergonomic workplace design

Support mental well-being through mindfulness training, stress management workshops, and access to Employee Assistance Programs (EAPs). These programs offer support services and counseling to employees facing personal or professional challenges. Hilton’s well-being program, for instance, translated to saving 13,558m employee hours since its launch.

Finally, openly acknowledge the importance of mental health. It allows employees to seek help without stigma. Access to mental health professionals, online resources, and educational workshops can create a supportive environment.

Colleague Connect can contribute here in two main ways. Firstly, you can use it to create a resource library as mentioned above. Since it’s easily accessible, employees on all levels will be able to use it.

Secondly, by facilitating connections and fostering a sense of community, Colleague Connect contributes significantly to overall employee well-being and satisfaction. Feeling connected to colleagues and supported by the organization leads to a:

Positive work environment
Reduced feelings of isolation
More engaged and committed workforce with lower turnover rates

10. Empower and allow your employees to do meaningful work

Beyond offering competitive salaries and benefits, fostering a sense of purpose is crucial for keeping employees engaged and motivated. When individuals feel their work is significant and contributes to a larger goal, they are more likely to be invested in their roles and committed to the organization's success.

Employees who find their work fulfilling report higher levels of satisfaction, productivity, and loyalty to their organizations.

So, here are some key strategies for ensuring employees' roles align with their skills, interests, and values:

Conduct assessments to identify individual strengths and skillsets. Use this information to assign tasks and projects that leverage an employee's unique talents.
Engage in ongoing conversations with employees to discuss their career aspirations and interests. Use this feedback to tailor responsibilities and growth opportunities to better align with their goals–and the organization’s.
Trust your employees by granting them autonomy over their work. This allows them to take ownership of projects, utilize their creativity, and feel a sense of control over their contributions.
Clearly communicate how each employee's role contributes to the organization's overall mission and goals. This helps individuals see the purpose behind their daily tasks and fosters a sense of connection to the company's success.

Creating a Thriving Workplace

Retention and engagement flourish within a culture that prioritizes a multitude of factors contributing to employee satisfaction and well-being.

So, use this guide to build an environment where your employees feel valued, motivated, and empowered to reach their full potential. In it, we’ve mentioned several strategies, such as offering competitive compensation and benefits, promoting a healthy work-life balance, fostering clear communication, providing opportunities for growth and development, and recognizing and rewarding achievements.

We’d suggest leveraging Colleague Connect for a holistic approach that addresses these diverse needs and cultivates a sense of belonging and purpose within your workforce.

Check out the perks with a free trial or a demo today!

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