How Does Employee Engagement Affect Retention

employee engagement and retention

For employers, finding the best talent is a difficult task, however, retaining your talents and ensuring you keep them with you as long as possible can be even more challenging.

To retain the top talent and build a successful organization or business with them, the leading companies have come up with a magic-tactic that so far has worked amazingly for them. That magic-tactic is insert a drumroll here employee engagement!

Employee engagement and retention are closely related, since engaged employees are more likely to feel a sense of commitment and loyalty to their workplace, which results in high retention.

It helps employees to be more invested in their work, more productive, and go above and beyond in their roles. They also tend to have a more positive attitude towards their job and their colleagues, which can foster a collaborative and supportive work culture, as well as lead to increased job satisfaction, better job performance, and a lower likelihood of seeking employment elsewhere.

To fully grasp how employee engagement and retention are connected, let’s first understand what each of them means. In this article, we will not only define these two, but also discuss the proven strategies to improve employee retention through engagement. So, without further ado, let’s dive right into it!

What Is Employee Engagement

Employee engagement is a term used to describe the emotional connection and commitment that employees have towards their work. When employees are engaged in their work, they can be more productive, loyal and devoted.

Moreover, it goes beyond job satisfaction and involves a deeper level of involvement, enthusiasm, and a sense of purpose. Engaged employees are more likely to be motivated to perform at their best, be innovative, and contribute positively to the workplace culture. They are also more likely to stay with their organization for the long term.

Even though keeping employees happy at their workplace is the key factor of employee engagement, achieving it is realized by some carefully planned strategies, about which we’ll talk later in this article.

What Is Employee Retention

Now, what is employee retention? A simple explanation is that, the employee retention refers to an employer’s ability to keep its employees for an extended period of time. It is a critical measure of a company’s success in maintaining a talented and skilled workforce.

High retention rates indicate that the organization is providing a positive and supportive work environment, including opportunities for professional development and career growth. Meanwhile, a company with low retention rates may struggle to attract and retain top talent, which can result in higher costs related to recruitment and training.

By prioritizing employee retention, organizations can build a loyal and committed workforce that contributes to the long-term success of the company. This can be achieved through engaging employees in different activities, making them feel welcome to express their opinions and views, and in general, feeling as if they are not only an employee, but a valuable member of the team.

Hence, we can confidently state that employee retention is the company’s ability to keep their talent through employee engagement.

Proven Employee Engagement and Retention Strategies

Alright, now that we covered the connection between employee engagement and retention, you might be wondering how exactly you can improve one through the other. Don’t worry, we’ve got you!

Below, you’ll find the proven employee engagement and retention strategies, which can help you improve your retention rates and encourage your employees to stick with you through thick and thin!

employee engagement and retention strategies infographic
  • Grant opportunities for growth and development: According to a survey by LinkedIn, 93% of employees would stay at a company longer if it invested in their careers. By providing opportunities for employees to learn new skills, take on new responsibilities, and advance their careers, companies can not only increase employee engagement and retention, but also use those new skills and knowledge to their advantage and grow their business with the help of their employees. In short, it’s a totally win-win situation for both sides.
  • Foster a positive work culture: A survey by SHRM shows that 55% of employees say that a positive work culture is very important to them. A positive work culture is a workplace environment that encourages employees to be engaged, loyal, collaborate with each other, love what they do and do what they love, as well as increases employee productivity. It’s a place where employees feel that they are appreciated and are motivated to do their best in various ways. So, by creating a supportive and inclusive work culture, companies can improve employee morale, job satisfaction, and retention. They can do it by welcoming flexibility, supporting remote work, establishing diversity and much more. Find out all the tips and strategies to creating a positive work culture in our detailed article about the topic.
  • Recognize and reward good work: The key to high retention is employee recognition. Yes, simple as that! In fact, 57% of employees who receive regular recognition would hardly look for a new job, which is exactly what most successful companies aim for when it comes to employment – keeping the talent they already have. By recognizing and rewarding good work, companies can increase employee engagement and retention, resulting in longer collaborations and tighter connections. One of the most effective ways to show the employees the recognition they deserve is by rewarding their good work. Software like Lucky Carrot make the rewarding process fun and productive. Besides, by using Lucky Carrot you will not only motivate your employees, as well as encourage peer-to-peer recognition, which plays a huge part in building a healthy and positive work culture.

Interested to find out more about Lucky Carrot? Click the button below to experience all the positive ways it can influence your work culture!

  • Provide work-life balance: The work-life balance means more to employees than you though, even more so after the pandemic, that made everyone consider their everyday life and dreams. Based on Achievers Workforce Institute’s 2021 Engagement and Retention Report, the top reason employees would stay in their current job is work-life balance (23%). So, by offering flexible schedules, remote work options, and paid time off, organizations can motivate their employees to stay and therefore improve employee retention.
  • Offer competitive benefits: Many companies offer various benefits to their employees, however not all of them matter. You can start with providing health benefits, such as medical insurance, massage hours and gym discounts, as well as a number of other perks that would benefit your employees in their daily or work life. Of course, to set up benefit packages that matter to your employees, you first need to understand who they are and what they need. If you have no idea what would motivate your team, you can always run anonymous surveys to find the answer. Providing competitive benefits to your employees will help you encourage them to feel more connected to their workplace and feel like their needs truly matter to the company.
  • Regularly seek feedback and address concerns: Everyone wants and deserves to be heard, especially when it concerns something they are a big part of. Take the time to communicate with your employees, hear their feedback and give them yours, consider their suggestions and implement the best ideas to make them feel that they matter. After all, they spend a significant amount of their time at their workplace, so they know the ins and outs of the company, and giving them the mic will only benefit you.

How Does Employee Engagement Affect Retention

Not investing in employee retention is expensive, and no we’re not joking!
Gallup estimates that the cost of replacing an employee is one-half to two times the employee’s annual salary.

That expense includes recruitment and training costs, advertising job postings, as well loss of organizational knowledge, time and resources. It also costs a lot of energy to replace an employee that could have stayed with a good retention strategy.

Sure, sometimes it’s hard to tell why an employee quits their job, however most reasons align and according to many surveys, employees usually leave because of being under-appreciated and bored with what they do. Employees who feel disconnected from their work or their organization may be more likely to leave in search of better opportunities, since they might experience work burnout and lack of motivation.

This is why employee engagement is the key aspect of high employee retention. Well-engaged employees are far less likely to look for a job elsewhere, since they are connected to their workplace and love what they do. Employee engagement increases employee satisfaction with their jobs, their work environment and company. This in turn results in lower turnover rates and higher profitability.

So, save your time, energy and resources you’d spend on finding replacement for your team members, and instead invest in employee engagement to build a more loyal and committed workforce, which will help your business reach all the set goals and achieve huge success.


Employee engagement is a crucial factor in achieving long-term retention of top talents. Engaged employees are more productive, innovative, and loyal, and are likely to contribute positively to the workplace culture. They are also more likely to stay with their organization for the long term.

By prioritizing employee retention and engagement, companies can build a loyal and committed workforce, which contributes to the long-term success of the company.

The proven strategies for employee engagement and retention, such as granting opportunities for growth and development, fostering a positive work culture, and recognizing and rewarding good work, can help you achieve these goals and gain success.

Overall, investing in employee engagement and retention is a win-win for both employers and employees, and the positive outcomes will have a ripple effect on the success of the company.

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