Employee engagement isn’t a new concept. It’s been around since the 1990s, when psychologist William Kahn first published his research on workplace behaviour. However, in many workplaces it is still overlooked. As businesses deal with pressures such as fluctuating exchange rates and an increasing number of competitors, many leaders feel they don’t have time to prioritise employee engagement strategies.

This approach is short-sighted. Employee engagement is not only related to a business’s performance – it’s integral to it. Engagement is at the core of issues such as employee retention and employee motivation, and affects the mood of an organisation at every level. 

This is just one of the reasons why 85% of HR leaders say that employee experience is the most important HR capability. High employee engagement rates are, simply, better for business.


Employee engagement definition


  • What is employee engagement? 

Employee engagement is about ensuring that employees are fulfilled in the role – in Kahn’s words, able to harness their “full selves” at work. Engaged employees put energy into their jobs, and are energised by them in turn. 


Kahn identified three drivers of employee engagement:


  1. Meaningful work: the employee feels that it is worth investing their energy into what they are doing
  2. Safety: the employee does not fear negative consequences of being their ‘full self’ at work
  3. Availability: the employee has the mental and physical energy and focus to engage 

Engaged employees are happier and more fulfilled, and their work is more likely to be productive and innovative.

Rather than being static, engagement fluctuates over time. A disengaged employee can become an engaged employee – and vice versa.

1. Q. What is employee retention?
2. Employee retention measures how many employees stay working within their current company in a given time period. 

When discussing employee retention rate, the term “turnover” is often used. Employee turnover is essentially the opposite of employee retention: it refers to the number of employees who leave the business. They may be seeking employment elsewhere or retiring, or they may have been made redundant. 

If we refer to employee retention statistics, a retention rate of 75% means that 75% of employees at that company stayed within the given period. This given period is most usually one year, though it’s often insightful to also look at longer periods: 3-5 years.

If you’re looking for an employee retention rate formula, hopefully, this example will help:

A company has 100 people, but an annual employee retention rate of only 60%. Over the course of the year, this company will have lost 40 employees. That’s a lot of people to replace!

Employee retention rates: what to focus on and why


What is a good employee retention rate? Different industries have noticeably varying retention rates, but the average employee retention rate is around 78%. 

Businesses should work out their current staff retention rate and consider it in connection with previous rates. It’s often helpful to try to identify patterns – has the retention rate dropped dramatically over the past year or so, after previously achieving employee record retention? Did this coincide with a management restructuring or a move to new offices?

This can also help track changes, and – once companies implement the employee retention ideas suggested in this guide – measure positive improvement.  

– Why is it important to use employee retention strategies?

Let’s look at some of the issues that can come with having a low employee retention rate. 

Employee retention: why it matters

Employee retention: why it matters

Employee retention: why it matters

Companies put a lot of focus on hiring the right people, but making sure they stick around is just as important. Although some employee turnover is unavoidable, a low staff retention rate can cause significant damage for several reasons – often interrelated. Here are three consequences of a low employee retention rate:

Loss of money

Loss of money

Loss of money

Loss of money

Loss of money
Loss of money

Studies focusing on employee retention have found that, on average, the cost of losing one employee amounted 33% of their annual salary.

That’s money that could be better spent investing in skill development.

Hiring people is an intense process that can take resources away from where they are needed. A poor employee retention rate requires businesses to frequently hire new employees, who will – however qualified and enthusiastic – require training and supervision before they can really handle things alone.

This takes up the time of current employees and can lead to other work tasks and goals becoming sidelined. Unfortunately, recent additions are more likely to make mistakes or complete inaccurate work that costs the company.

Loss of knowledge and professional connections

When valuable employees leave a company, they take valuable information with them. Although handover processes might attempt to mitigate this, often there’s simply more information than can be successfully transferred. 

Long-standing employees have years of expertise and experience to call on when making decisions – this knowledge is invaluable.

In client-focused industries, a lot of decisions are also likely to depend on relationships between employees and external partners. A low employee retention rate means that businesses will need to spend significant time and effort rebuilding these connections.

Loss of staff morale

A low employee retention rate can become a circular problem. Frequent departures may make employees more aware of their own dissatisfaction, or insecure about whether their position is secure and valued. They may also have to work extra to train new staff or deal with staff shortages. This makes them more likely to look for new opportunities, exacerbating the situation.

The knock-on impact of these losses is why the importance of employee retention rate shouldn’t be underestimated.

However, businesses experiencing low employee retention rates shouldn’t panic. Read on for employee retention techniques that can help get things back on track and create a loyal workforce.

Employee retention ideas and strategies

Implementing employee retention strategies will increase company retention, which will not only save money, but ensure that staff are happier and more satisfied in their roles.

There are many employee retention theories floating around that may seem confusing, but really the cornerstone is simple: make employees feel valued. 

Easier said than done? No, with a proper strategy it’s both achievable and straightforward. Across businesses of all sizes and kinds, focusing on four key areas can rapidly increase employee retention and create a happier workforce in general. 


1. employee management 


2. Management training and coaching


3. Skills development and career advancement


4. Remote working and employee wellbeing

Whether employees feel emotionally invested in the work they’re doing is the ultimate decider in whether they’re likely to stay with a company. 

Employee engagement and retention

Studies have confirmed that employee engagement and retention rates are ultra-connected, showing that employees who are engaged perform 20% better and are 87% less likely to leave

Maintaining good employee engagement should be a priority for every organisation. CoachHub’s Guide to Employee Engagement explains the topic in more detail, and outlines the key areas that businesses should focus on to see results.

Management is key


“People don’t leave jobs, they leave managers.” 

This is a popular saying because it’s true! Employees unhappy with their relationships with their managers are likely to look for other opportunities.

Of course, sometimes personalities simply clash and managing styles are different. However, many problems arise through lack of management experience, and there are few situations that can’t be improved with training. In one survey, nearly half of employees reported that they’d quit a job because of a bad manager, and 60% said that managers need more training.

21st-century coaching for managers

Managers struggling to guide their team can particularly benefit from a coaching program that enables them to build on their skills, identify their weaknesses, and reconfigure how they relate to their colleagues. CoachHub transforms people into highly effective, inspiring managers through leadership coaching. Opportunities like this will make people feel supported and help them cope with the associated challenges of running a team.

Being aware of employee needs before they are vocalised, and helping managers develop their skills in a positive way that will benefit everyone, can have a game-changing impact on employee retention.

Skill development shouldn’t be an afterthought

While praise, respect and trust can help motivate employees, investing in them is concrete proof that they’re valued. Employees who know that their company is helping them level up their skills are much more likely to really focus on building their career there.

Which skills does a workforce have, and which would they like to develop? Everyone enjoys learning something new and improving their career chances for the future. There might be considerable buried talent just waiting for an opportunity to emerge.

While whole-workplace training can be useful, in these situations personalized, flexible digital coaching is more likely to help employees find something they really excel at, increasing their confidence and job satisfaction. 

Creating futures within the company

Attitudes to job stability have changed rapidly over the past ten years. Young professionals are increasingly less tied by company loyalty, and may be hesitant to stay in one place if they can’t see a clear route forward.

Focusing on skills development is one way to counter this. However, this should be done in tandem with the provision of real potential for advancement within the company.

It’s not that young people want to go elsewhere – it’s that they often have to. 

93% of employees say they would stay at a company longer if it invested in their careers. 

Leaders can improve employee retention by valuing their current workforce, opening routes to success and rewarding loyalty. Use talent management tools to find out where staff want to be in five years and support them to make their aspirations reality. 

The remote work revolution

With 2020 revolutionising the world of flexible and remote working, companies are increasingly finding it harder to justify requiring daily office time. 

But one thing that’s been under-appreciated during discussions about the future of work is the amazingly positive impact that remote working options have on employee retention rate. 

Studies have shown that companies which encourage remote working have a turnover rate of 25% higher than companies that mandate office working. 

This means it’s absolutely worth adopting a modern approach to work and bringing in remote working options – if they aren’t already in place. 

TIP: If in-person meetings are necessary, could staff have the option to work two days/week from home? Of course, every industry is different, but this change could make a positive difference for the whole workplace.

If staff skills are stagnating or the lack of face-to-face check ins during remote working time are concerns, there are ways round that, too. Flexible online coaching An online coaching platform is a 21st-century way to keep employees accountable, on track, and learning new skills – without requiring much time from management. And with potential savings to be made on office space, where better to invest that money than in staff?

95% of HR leaders are concerned that employee burnout is sabotaging workforce retention. 

Remote working can go some way to combatting this, enabling employees to effectively balance work tasks with off-the-clock duties. However, there’s more that leaders can do – such as promoting flexible working schedules.

More and more businesses are adopting flexible policies with core hours that enable employees to collaborate, while tailoring their day to fit their personal needs and productivity levels. 

Employee wellbeing and work-life balance

Moving beyond presenteeism and towards a way of work that suits employees and leaders reduces staff stress, and increases job satisfaction and staff retention.

TIP Health is another factor to consider in preventing burnout. Check that staff don’t feel pressured to work when ill. Rest and recovery are important for ensuring people can bounce back, rather than feeling overwhelmed and uncertain about their future.

Employee retention: on the way to success

Not all of these changes can be implemented overnight, but starting with the first steps today will pay off. 

By following the employee retention strategies laid out above, businesses can achieve employee record retention and enjoy a whole host of associated benefits, such as increased productivity, job satisfaction and happiness. 

Employee retention may seem as if it’s focused on the numbers, but really it’s about people. Keep talent and expertise on your team, and you’ll go far. 

As experts in Digital Coaching, CoachHub have enabled many businesses and careers to transform. We’ve outlined a few of the coaching services we offer here, and you can request a demo on our website.


How CoachHub works

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Regular coaching sessions with a top business coach.

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Enhance sessions by choosing from an extensive library of micro-learnings to complete between sessions.

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Chat with your coach 24/7 in-app.


Why is talent management important?

Talent management is an integral part of every organisation. In recent years there has been a monumental shift in power from employer to employee. Organisations must compete for the best talent. Hiring can be a lengthy and expensive process, so ensuring that you manage your talent from the very beginning, even during the hiring process, is crucial for an organisation to thrive. Employee turnover is also very expensive. By implementing talent development programmes, you can nurture and retain your employees.

What are the key components of talent management?

Employee planning and recruitment – by clearly identifying what your organisational goals are, you can identify what employees you need to get you there.

Talent acquisition, mapping and retention – It is important to look at talent both internally and externally. Retaining your employees and hiring from within is a more cost effective way to establish leadership positions. A good way to build an internal talent pool is to establish a talent management programme within your organisation.

Performance management – To help move an organisation forward, the right employees need to be aligned with the right roles, developing objectives for success and supporting their development.

Learning – Learning is more than just training. Effective learning programmes should include activities that support the organisation’s objectives and culture When an employee sees how their growth impacts the organisation, they acknowledge how valuable their role is.

Career development – This relates to the talent retention component of noticing that hiring from within is not only an option but more often than not, the preferable more cost effective option. Provide your talent with the necessary professional development tools, like coaching, that can advance their career.

Succession planning – What happens when positions become available? Who will fill these roles and what needs to be done to get there? Having a plan in place means that the decisions are already made and there will be no disruptions when the organisation needs to fulfil new roles.

How do you identify high-potential employees?

Do not confuse high performers with high potential. Performance is of course important, but is not the only indicator. It requires solicit management input to establish a list of candidates and then confirm with a multi-trait assessment to ensure the list is accurate. This assessment should be in live with the company values. Intuition and performance are both acceptable but these must be paired with high potential assessment methodologies that can measure desired traits, for example agility, flexibility and drive.

How is talent management measured?

A mixture of both quantitative and qualitative metrics should be measured. Quantitative metrics include: turnover, percentage of high potential talent, percentage of external vs. internal hiring, financial and logistical onboarding costs (both internal and external). Qualitative measures include employee and manager satisfaction, employee engagement, exit interviews and performance review comments.


Rosie Evans
Behavioural Scientist at CoachHub.io

Rosie is a behavioural scientist at CoachHub, where she applies insights from positive psychology, neuroscience and behavioural science directly into digital coaching programmes and an approach that drives individual and organisational transformation. She works as part of the in-house research and development team, the Coaching Lab, and contributes to the advancement of the science of coaching and behaviour change; in addition to working both internally with in-house researchers and with world-class external academic teams to design and execute groundbreaking studies.


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