How to Improve Employee Engagement & Retention: Be Honest, Listen & Take Action

Many companies are offering their service to solution retention, and many articles list "10 or more" tactics on how to do it yourself. But from our experience it is as simple as: Be Honest, Listen & Take Action. But before we dig into that, a couple numbers.

Why does Retention matter? It's about far more than "appearing soft & fun" to attract young talents. Lost productivity and new hire training and recruiting (which can take up to 1-2 years to match the productivity of an employee who left) are the most costly consequences of employee turnover when doing a quick internet browse. But a negative reputation among the candidate pool, making it harder to find top talent willing to join your company, is another. An unhappy customer tells up to 20 of their friends about their bad experience, so can an unhappy employee.

Why does Engagement matter? Employees who leave are only the tip of the iceberg. 70% of disengaged employees would quit if given a mere 5% pay raise elsewhere, and according to a Gallup survey, 67% of employees are disengaged (source). You read that correctly. 2/3rd of employees disengaged. That's a lot of productivity lost without you realizing. Your results could be 70% higher just by improving your workforce engagement level. A highly engaged workforce can also reduce turnover by 25-60%, and companies with low turnover bring in 4x higher profits on average. (source)

So it's in your best interest that the answer to improving Employee Engagement & Retention (EER) be simpler than expert articles on the subject make it look. And having an Honest Look at the day to day practices of your company is the mandatory first step to solution your EER issues.

1. Be Honest (about the sources of the issue)

We live in a time where people demand authenticity - whether customers, employees or the society at large. People also demand that companies care about more than profits and that they embrace a role of steward for positive change in the world. Step 0 in improving EER (Employee Engagement & Retention) is accepting that fact. If you continue to want to "do business as usual", where it's all about money, clubs of "friends", power in the hands of a few, and hush hush on abuses of any kind, you are due to see your activity and your business disappear. Countless brick and mortar bookstores or video stores, and now clothes retailers, looked down upon Amazon and Netflix once they first came about with brand new ideas on how to do business. Now those brick and mortar businesses have gone - or are going - bankrupt a mere decade later. In the same fashion, companies - and executives - whose strategy is to "play ostrich" regarding societal movements like #metoo or #blacklivesmatter - thinking they will go away - will find themselves left in the dust of more socially conscious competitors. At the moment many companies find themselves amid scandals of sexual harassment, abuse of power, or racism, with some managing to keep control of the narrative better than others. But make no mistake, like authoritative forms of governments have been left in the past, so will companies that did not embrace a more democratic way to run their business.

That understood, the next main reason why EER is so hard to get a handle on in companies nowadays is first and foremost because many companies cannot be honest with themselves. No one wants to be pointed to as the sexist, racist, or any other adjective pointing to you as the "bad guy". And so, many companies continue with things as usual, no matter the number of employee complaints or "rumors" of misbehavior or abuse of power. And instead of taking responsibility, companies blame the employees who left for being "too sensitive", "not a fit", "spoiled millennials", etc. But how does that help stop your talent attrition? It doesn't. The only way you can be guaranteed to see your EER rates increase - keep your talents - is by being honest as to why they left. And as anyone who has read exit interviews will know, employees who leave often list many reasons for their departures, none of which are them. So it's not like the sources of employee turnover are a mystery.

Companies just don't want to accept the feedback, as it would mean many among the valued ranks of the organization - managers, HR, leaders - failed at their core responsibilities of keeping employees engaged. So most often, feedback from exit interviews is labeled "subjective" opinion, and nothing is changed. The thing is, this mindset becomes much harder to defend when feedback from exit interviews starts to pile up and point to the same issues. At some point companies have to say: it's on us to change something here if we want to survive, and even more if we want to thrive.

So when we say fixing EER is simple. It really is. If you want to have better EER rates the first thing to do is:

1. Have exit interviews (which a mind blowing amount of companies do not have),

2. Take the reasons listed by departing employees seriously,

3. Act on them to improve your work environment.

The only "hard" part is accepting your organization has more areas of improvement than you thought (or hoped), rather than blame employees who left as "not loyal", "job hoppers", "spoiled millennials", "ambitious ladder climbers", "mentally weak" etc... Then take appropriate action, which sometimes can mean sacking high placed leaders or high performing, or long standing, employees.

Now if this rubs you the wrong way, you are free to get offended - or find this arrogant - but that won't help you solve your EER issues, will it? If you came to this article, it's because you need a solution to talent attrition or lack of engagement /productivity in your workforce, and what you've tried so far hasn't worked great, and this is as effective a method as you'll find. Employees won't change their attitudes. With each generation comes new attitudes and values, it has always been and will always be. Life is constant change and your choice is to adapt, or be left behind like the brick and mortar companies above. So the question really is: are you willing to change your attitude to the power dynamic between employer and employee that lead your organization to have low EER rates? After all, you are the one with a problem to solve, not the employees who leave for another job.

4. You can also have regular surveys asking your current employees what needs improving in the company but they might either keep the worst to themselves, or be disengaged from the process, due to prior inaction from management (see point 3 "take action" below). There is no better way to ensure you are "ready to truly change" than to look at the feedback given by the "most disgruntled employees of all": those who left. (for a deeper dive on this, read our article Why Glassdoor is good for your company)

Now you might say "well that's just your opinion", so let's look at "official" employer turnover stats, like this article listing "40 employee turnover stats to know".

Here is their top 3:

1. Between 60-70% of all employee turnover is voluntary.

2. 80% of all employee turnover is a result of poor hiring decisions.

3. The average annual turnover is 19% [1 in 5 employees]

60-70% voluntary turnover: If 3/4 of employees make the decision to leave, it supposes that they were "good employees" as they were not fired. The question is then: how come when employees leave, companies point to many flaws in the employee as the reason? If they were so flawed, how come they left voluntarily instead of being fired? The most plausible logic here is that employees who left were "good employees" who didn't get something they needed from the company, so they left. (whether it be salary, recognition, challenging work, visibility etc...) You will notice that we don't say "felt they deserved", to avoid the rabbit hole discussion of "entitled millennials", "we pay them for their work so they don't "deserve" anything" etc...Again keep in mind: you have a problem you are looking to solve, and that thinking won't help you solve it. However accepting that employees leave because they expected something from you and didn't get it, is something that will help you increase your EER rates.

80% turnover is a result of poor hiring decisions: We have a good example here of the "blame" put on employees rather than on the company when things go wrong. Saying that things go wrong 80% of the time because you hired the "wrong person" is removing any responsibility from the company and preventing you from learning if anything could be improved in your organization. It casts a strong blind eye on the fact that this "wrong hire" has been interviewed for days, weeks, months by sometimes up to 10 or 20 people in your organization. At minimum, you should question your hiring process if spending so much time and people on it leads to "wrong hires".

The most plausible logic here is that the people hiring that person expected that person to be a certain way, or promised them certain things as to the role, their level of autonomy etc, and that person turned out to be different than expected, or that person started to point out the discrepancies between that they were told at their interviews and the reality of the company. When something like this happens to a new employee from a diverse background, it is imperative to look at the team they joined and see if bias could be at play. (for example a first female or person of color on the team, or in a managerial role.) A history of a manager - or team - having regular attrition is also something to look at to source the core of the issue.

Understanding that authoritarianism ("the enforcement/advocacy of strict obedience to authority at the expense of personal freedom/lack of concern for the wishes or opinions of others") is on its way out in companies like it has been as a form of state government, is also key to solving EER issues. Why? Because more than 70% of workers leave because of their managers.

"A Gallup poll of more 1 million employed U.S. workers concluded that the No. 1 reason people quit their jobs is a bad boss or immediate supervisor. 75% of workers who voluntarily left their jobs did so because of their bosses and not the position itself. In spite of how good a job may be, people will quit if the reporting relationship is not healthy."

It therefore won't be a surprise that number 2 on the list of stats to know is that 80% of this turnover is caused by....poor hiring decisions! Wait...shouldn't it be to managers? Yes it should. But remember how we mentioned above that 3/4 of employees leave "voluntarily" and that very few companies have exit interviews to know the "real reasons why employees leave?", well having it that way helps people like managers, or HR, or any person having an influence on someone's evaluation of performance, stay blameless. As long as companies align themselves with poor managers in cases where good employees mention leaving because of poor managers, those companies will continue to suffer high Employee Turnover rates. (to dig deeper read our article on why HR lost our trust) Surprisingly despite many articles pointing to Employee Retention as "the key priority of modern companies", the key priority seems rather to pretend nothing is happening. Einstein defined insanity by doing the same thing over and over again and expecting different results and companies find themselves in this paradigm when it comes to employee retention.

Companies seem to ignore that the definition of Employee Retention is "an effort by a business to maintain a working environment which supports current staff in remaining with the company" (source). The keywords here being "effort" and "support" and that the company is the one supposed to make the effort, not the employee. Snacks, health benefits and a gym are nothing compared to the arduous and daily work of good management, inclusion, recognition and career growth plans. That is what modern employees expect from their employers. (article on Sources of Employee Motivation - there are many others you can find) Which leads us to our 2nd point: Listen.

2. Listen (truly listen, not just to check a box)

There are articles aplenty on the internet about the importance of listening to be a good manager, and from what we have seen it seems to resonate very strongly among managers. The issue? Many managers think the point is to have 1 on 1s with your employees, and nod "empathetically" at what they say, without realizing they are missing the point.

This explains why even "cool companies" promoting care for employees, inclusion etc...find themselves baffled by as high employee turnover rates as more "old-fashioned" companies. (the average tenure in tech companies is 3 years)

So what's the issue? The 70% of employees leaving because of their manager, did talk to them about a need, an issue or a desire. Often multiple times. It just wasn't understood, or taken seriously. Too often companies (and managers) care about people's satisfaction only post-crisis, after a story of abuse was made public, a person had to take a long sick leave for mental health, or once the level of attrition reaches a certain level. Yet the information about mismanagement or dissatisfaction was there often for years or decades before. That is why you can also find a lot of articles on how to "truly listen".

If your company still follows the authoritarian model of management, many managers probably have no regular conversations with their reports apart from the mandatory yearly performance review, and from our experience many don't even take those seriously, letting employees wait for months to get them. In this sort of environment getting mere sympathy from a manager ranges from hard to unheard of. The mere idea of saying sorry as a manager - or asking about feelings - makes you itch. If that is your case, you are part of the problem.

Many recent companies, especially in tech, have already evolved from sympathy into empathy. Satya Nadella, CEO of Microsoft, for example has made empathy the core of his culture transformation since getting the CEO role. (article) What's the difference? In English sources it was hard to find, empathy was often confused with sympathy. In French the difference is clearer. Sympathy is saying "I am sorry for what's happening to you". Empathy is saying "I can see you are sad and I understand why".

The problem with empathy though is that it's as easy to say "I understand", as a polite reflex, as it is to say "I'm sorry", without meaning it. An example that many employees will relate to is the "company survey". A vast majority of companies hold satisfaction surveys and yet employees keep leaving. If you question employees, many will say they stopped participating or stopped mentioning improvement points because they did not see any change following previous surveys. To show you truly care, you need more than empathy (understanding), you need action to prove you do indeed understand. On that French website they called that 3rd step compassion: "I understand your sadness. I'm going to spend the night with you tonight so you're not alone". In this article we're calling it: Take Action.

So when we say fixing EER is simple, it really is.

a) Make sure your managers have modern values of caring, enhancing and valuing employees, rather than authoritarian values of control, obedience and taking the employees for granted. Look whom among your managers have regular conversations with employees and whom doesn't. Look who finishes the yearly performance reviews with their team first and who is last. Look at the level of attrition on each team and what people said in their exit interviews, etc... There are many ways to know who your "bad managers" (or individuals) are, but for some reason companies often hide themselves behind "the difficulty of knowing what's truly going on". It is not that difficult to know if you truly want to know. To this day we still wonder if most companies continue with those practices due to blind faith in their managers, or because they want to keep their structure autocratic, despite their PR discourse on autonomy and equality saying the contrary.

Other possible actions are:

b) Make sure managers have regular conversations with their reports

c) Make sure those conversations include asking what can be improved, if the employees feel challenged appropriately (not to little/not too much), what their career goals or aspirations for the next year are etc...

There are many more possible actions, but they will not guarantee in themselves that EER will increase. What will is your company promoting nurturing values in its managers. As mentioned prior, many companies have mandatory 1 on 1s and people are still leaving. Values of caring and truly listening on an equal footing relationship of professional to professional is what is needed. The below is exactly what you need to recognize - and make disappear - in your organization:

d) Needless to say that you - at the executive level - also have to support managers when they listen to their employee needs and bring them up. Things like promotions, salaries, training etc are seldom the premise and the decision of the sole manager. If you find EER issues are global to your company then you should also look at your policies and resources...and make sure you don't overpromise to candidates when you recruit them.

3. Take Action (the one you were asked for)

Now you might say: I am honest/aware, and I listen, so your article is useless. Well it so happens that yes, many managers listen and show empathy by talking with employees and saying they understand. But the issue is, if you say you understand and do nothing to solution the issue, then you're either lying - you actually did not understand - or you don't care - you understood but you didn't take action. (as shown in the cartoons in the previous section) There is a reason why the expression "actions speak louder than words" exist. Saying the "right things" to "check the good manager" box is easy. It's much harder to take action on the needs, complaints or aspirations of your employees. It actually requires an effort (as seen in part 1) on your part. And that is why often managers fail at this last step.

Now as mentioned above, managers need the support of higher management/leadership to be able to take the appropriate actions to keep employees engaged (higher salary, promotion, attending conferences etc...), and it is important to not overpromise to candidates when you hire them, as that is bound to end up in a dissatisfied employee. That aside, from our experience 70% of employees are leaving due their manager either a) not taking action while they could have, b) not explaining to the employee that their hands were tied, and how, c) giving the employee an explanation that sounds fake instead of being honest. Here are examples of each case:

a) An employee is having issues with another employee. They mention it to the manager. The manager listens but doesn't help solution the issue despite the employee coming to ask for their help several times. The employee eventually leaves the team or the company to avoid this conflictual work environment and may point to the manager as the reason they left.

b) An employee asked their manager for a raise and the manager said it was not possible without any more details. The employee is left to wonder if the manager thinks they don't deserve the raise/promotion, and most often the employee starts looking for another job and will point to their manager as the reason they left.

c) An employee asks their manager why they were passed over for a promotion and it was given to employee Y instead. The manager tells the employee that it was just bad luck and that they are sure the employee will get it next time. When the next promotion comes, the employee is again passed for the position. They start to think their manager is not being honest with them as to why they are passed over for the promotion, and that maybe their manager doesn't want them to get promoted. The employee ends up leaving for a higher role in another company and will point to their manager as the reason they left.

Hopefully you'll find those examples common and realistic enough. Embodying "take action" and "be honest" would instead look like the following:

a) The manager takes an active role in solutioning the conflict between the employee and that other employee. This can be done in different steps, but if the conflict persists after a couple tries at the 2 employees discussing it out, the manager needs to get involved. The most effective way we've seen it to have the 2 employees in the same room with the manager acting as mediator/discussion facilitator. We've seen this type of "inaction" in nearly all the companies we've worked at. It can demonstrate either a lack of care, or a lack of comfort in the manager in regards to dealing with interpersonal conflicts on their team, and can be solutioned with training on values and actions to take in such situations.

b) The manager did ask for the raise to their supervisor, HR, or whoever makes decisions about salaries in the company, but they were told there was not enough budget. The manager gives that information to the employee to let them know that they value them, and vouched for them in their request, but the blockage is higher. It is a good opportunity to show the employee is valued and also explain how raises work at the company. The employee might still decide to leave, but at least the relationship with the manager is safeguarded and the exit interviews will point to the company policies as the issue, rather than the manager. An even better action from the manager would be to push further on the supervisor/HR to know why the raise cannot be granted and when one could be granted, and to then pass that information on to the employee. That extra curiosity on the manager's part shows how much they care about retaining that employee. But it is key to inform the employee that all this was done. Too often we've seen managers not share how much they championed their employee with the employee him/herself, and as a result the employee left feeling not valued by their manager. There is a line between "not pointing fingers at others" and "being honest". In this case the manager wouldn't be pointing fingers. The fact is that blockage is higher up in the chain and the manager did do what they could to ensure the employee would be first in line for a raise when one would be available. So mentioning it is just being honest/transparent. Pointing fingers would be saying the blockage is elsewhere without even trying to know if a raise is possible, or if the blockage is you. As you can see this is also easily solvable. The only potential "hard" part is having the courage as a manager - and care enough - to push further than the first "no" when bringing the raise up to your own manager/HR.

c) The manager gives the employee honest feedback on why they were passed for promotion. It can be honest feedback on their performance, with suggestions on how they can do better to have more chances for the next promotion, or honest feedback on the fact that they will never get the promotion because a particular supervisor always picks males, or people coming from sales, or a given university etc...Like in case b) it is better in those cases to be honest/transparent as to the real reasons an employee is prevented from growing in their career. When they leave the employee will point to the unfair promotion practices of that other manager, rather than point to you as being a poor manager. Note: It is also important to be honest when the reason is that you'd prefer to keep the employee because they are great at their role and you need them. Of course this is not a good reason to pass someone for a promotion, and it requires self-awareness to realize you are doing this, but if this is the reason, it's better to be honest about it with your employee. At minimum they will feel valued and proud that you find them so useful, at best they will decide to stay with you for a bit longer (maybe against a raise, or a special project, instead of a promotion), and at worst they will stick with wanting that promotion, and you will have to let that employee go where their growth leads them. At least it will be in the company and not at a competitor.

So when we say solutioning EER rates is easy. It really is. You only need to take action when employees mention their need, issue, concern or ambition, and be honest with them as to why they are not getting it, or what they need to do to get it. Caring about having engaged, satisfied employees is also key here. If managers do not care, employees will continue to leave.

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Real life examples:

• A high level executive in the finance sector in his 50s, left his role - and the country he had lived in for several years - because of a bad manager . (which shows it's not only a "millenial issue")
• A managing consultant left a big management consulting firm because after being promised a promotion after taking on a project no one wanted, the firm didn't keep its promise. He is now at a Director level in another company.
• A manager at a big retail company who left because the company cancelled the Christmas bonus that year because it had been a "tough quarter", and 3 days later announced record earnings. The bonus amounted to 8 million $ company wide, and the profits were 400 million $. It is the lack of integrity shown by the company, not missing the 50$, that made the manager leave. That manager also shared that he had applied to a higher role and was told he did not get it because of the type of experience he had at the company. Only to learn the person hired for that role had the same experience as him.
• A software engineer working at a big tech company left because he was only given bugfix and other menial tasks to do, despite the company hiring for "people wanting to change the world" like most tech companies do. He talked with his manager about it several times and the manager took no action.
• A senior designer who left because of the big egos and lack of listening of the company leadership. "They hired us as experts and then ignored us. I'm usually able to keep my temper in check but that was quite infuriating."
• A Senior Leader in a big advertising company who left because his manager threw him under the bus when an issue arose with a potential conflict of interest case that made a lot of noise at the company.
• An individual contributor who left because her manager was bullying staff. 11 people on the team left and nothing was done about it.
• Many more we know left roles because they felt there was no opportunity for growth for them at the company, either because the managers higher up had been in their roles for decades, or because it took decades to be considered for a role, or because they were never considered for promotions despite applying multiple times.

Each of those cases could have been solutioned with greater honesty, listening and action. So it is really as simple as that. And in the cases where you cannot solution the desire of the employee, at least listening, showing you took the action you could, and being honest limits the level of disappointment employees feel towards your company when they leave. It also shows that when we say "employee" and "manager" we don't just mean line employee and line manager. The manager/employee dynamics we have described can be at every level of the organization, even the highest.

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Conclusion

Employee Engagement & Retention is a top priority of many companies and for good reason. A constantly changing workforce creates disruption in the day to day cohesion of the teams and can is costly to replace. But to solution employee attrition managers/leaders need to understand the values of the society that surrounds them, be willing to have an honest look at their practices and get feedback as tough as that they give to their employees during performance review, truly listen to employees when they voice a need or a grievance, and take action to show the employees are valued and you do not want them to leave. It really is as simple as that. But for this to work you have to be honest as to the real values of your company and the value you place on retaining your employees. It is better you be honest on the fact that you do not care about having a 20% turnover rate, rather than pretend you care about employee engagement and retention and market yourself to potential candidates as having values you do not have.

PS: Of course it is a balance. The manager is not always wrong. Sometimes the employee is in the wrong as well. We have had to let go people because of their poor performance, and have had to face the cases listed in section 3. But this article is focused on the business case where you have good employees leaving and you do not know why, or how to solution it. We of course do not prone that employees overuse the above to take advantage of their managers like in the Dilbert cartoon below. The funniest part of that cartoon is that everything the employee list are things managers should do to increase engagement. It just looks weird when the employee says it :)

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(for more info on Honest Look Consulting services, visit our website: www.honest-look.com. We provide Agile, Leadership and DEI consulting for companies wanting to improve profits, employee engagement and customer satisfaction. If you like this article and would like to bring us on to have an honest look at your company, reach us at [email protected])