Based on research by Marcie Marks, DBA'24, Laura Munoz, PhD, Thomas Brill, DBA '18, and Ben Dilla, PhD
Employees are the greatest asset of any company—without them, there would be no business to run. Following the “Great Resignation,” it is imperative that companies prioritize employee retention and satisfaction. Although there are several factors contributing to voluntary turnover, it is within the best interest of companies to both understand and address the factors within their control.
Successful talent attraction starts with strong employee retention. Job satisfaction and employee engagement can be improved by encouraging a healthy work-life balance, implementing recognition programs, providing competitive salaries, and offering advancement opportunities. Employees with these benefits and incentives tend to not only stick around, but also promote their company to potential employees. When companies take care of their employees, the employees tend to take care of their companies.
Employee engagement involves the behavioral, cognitive, and emotional aspects of the person. Companies that want to boost engagement need to acknowledge their employees as multifaceted individuals with diverse needs and preferences. Employees who are engaged holistically, especially on an emotional level, tend to be more satisfied. And employees who tend to be more satisfied tend to be more engaged.
Key Points
- As high rates of voluntary employee turnover persist, companies should look to incentivize employee loyalty and engagement.
- Job satisfaction was found to correlate with increased employee loyalty, employee Net Promoter Score (eNPS), Positive Word of Mouth (PWOM).
- Employee engagement had a positive relationship with employee loyalty, eNPS, and PWOM.
- Crucially, job satisfaction and employee engagement were positively correlated.
- Companies that work to reverse the trend of voluntary turnover will benefit from an improved internal culture and reap the financial benefits in the long term.
Why This Matters
Considerable increases in voluntary turnover over the past several years should concern business leaders. Turnover is not just financially costly, it also degrades morale and is often a reflection of dysfunctional company culture. High turnover tends to strain recruiters, who have to continue hiring new employees. Turnover also leads to higher stress in managers, who have to train higher numbers of employees—and poor performance results. When new hires enter into these disorganized environments, they are more likely to leave quickly, which further perpetuates the cycle. Conversely, companies with lower turnover tend to have better employee performance.
Focusing on what employees actually voice as wanting and needing should be a priority for companies. It is imperative to keep a pulse on employees. Without knowing what makes them feel satisfied and engaged, it will be difficult to keep employees around for long.
While companies should take care of their employees because it is the right thing to do, there are also clear financial incentives for striving to boost retention. This can be accomplished by working to boost both employee engagement and job satisfaction simultaneously. Companies should reward employees who exhibit loyalty and commitment, rather than simply penalizing or ignoring those who leave.
By attacking the issue of retention from both ends at once, companies can reverse the cycle of dysfunction and create a positive feedback loop of employee retention and talent attraction. Satisfied employees tend to both stick around for longer, and engaged employees tend to encourage others to join their company.
Investing in employees leads to an improvement in company culture and reaps financial rewards. All it takes is a willingness to listen and then to act.
Based upon the following peer-reviewed manuscript: Marks, M. F., Munoz, L., Brill, T., & Dilla, B. L. (2024, November 6-9). Employee Satisfaction and Engagement Impact Organization Loyalty. [Conference presentation]. Society for Marketing Advances Annual Conference. Tampa, FL, United States.
