Have you thought about why employees stay at a company?
Employee retention is one of the biggest concerns of HR managers—and with good reason. When good employees leave, the cost to find and replace people usually starts around 150 percent of that person’s salary. Projects become delayed. Team dynamics change. And then there’s the learning curve associated with any new person learning to take over where the previous employee left.
Sometimes when an employee leaves, it’s unavoidable.
But much of the time, it is avoidable. And by spending just a little more time looking at what makes employees want to stay at companies, you can save yourself a lot of headaches later. HR managers have focused on employee retention for years. However, there is a limited number of levers they can use to affect employee retention.
One of those levers is workplace well-being. The issue of well-being in general has been popular for many years. However, no one had really applied the ideas of well-being to the workplace.
In 2016, The Myers-Briggs Company began a multiyear effort to examine the potential impact of well-being at work for organizations. To do this, we included a set of established organizational outcome measures related how well a company performs. And the correlations we found were incredible. Not only did they relate to organizational performance but also to employee retention.
Higher Well-Being Means Higher Job Satisfaction
Employee workplace well-being had a .787 correlation with employees’ job satisfaction. Job satisfaction means how happy an employee is with their current position—the job that they do every day. This means that for every bit you can increase your employee’s well-being, there’s a positive increase in how they rate their job satisfaction. Efforts made toward improving employee well-being should also result in an increase in job satisfaction.Higher Well-Being Means Higher Company Loyalty
Affective commitment is the same as company loyalty. Affective commitment is part of Meyer and Allen’s three component model of commitment that explains an employee’s commitment to an organization as a psychological state. Each of these three components (affective commitment, continuance commitment, and normative commitment) influence how an employee feels about the company that they’re working for.Affective commitment is an emotional bond to the organization. Do they like the people they work with? Do they like their supervisor? Do the company’s mission and values align with the employees’ values? If you have a high level of affective commitment to the organization, you enjoy your relationship with your company and you’re likely to stay because you want to stay.
Higher Well-Being Means Higher Organizational Citizenship Behavior
Organizational citizenship behaviors are things that you do for your company that are above and beyond your job description. Actions like volunteering for a committee or helping out a co-worker who needs a hand moving boxes or supplies. For example, The Myers-Briggs Company has a diversity and inclusion committee, and being part of this committee is not part of anyone’s job description. It does take extra time, but it’s something that is good for the company culture and the people in your workplace community. At our company, joining a team or committee like that would be an example of an organizational citizenship behavior.Research found that when employees have a higher workplace well-being, they also have higher levels of organizational citizenship behaviors. Organizational citizenship behaviors are positively connected with company performance outcomes.
Higher Well-Being Means More Assistance
There is also a positive relationship between workplace well-being and employee’s individual organizational citizenship behavior. Compared to the organizational citizenship behavior (OCB) mentioned above, individual OCB talks about helping co-workers individually above and beyond an employee’s job description. Individual OCB is “I help my team members” and OCB is “I help my organization.”People who have a higher employee well-being also report being engaged in activities to help their co-workers above and beyond their job description. Organizations that have higher individual OCB tend to have higher organizational performance.
Higher Well-Being Means a Lower Likelihood That Employees Will Want to Leave the Company
If an employee is planning to leave the company but is not actively searching for a job, they have a high turnover intention. The question we asked is if people are looking to leave their current job in the next one, two, or three or more months.High employee turnover is a big problem for HR. Not only does it take time to get things in order for that employee to leave, but then the burden falls on HR to update the job description, search for and find new job candidates, go through multiple rounds of interviews, and onboard those candidates.
But this research has found that as employee well-being increases, employee’s turnover intention decreases. And as turnover intention decreases, so do HR headaches. A lower employee turnover rate has a positive effect on organizational performance outcomes.
Higher Well-Being Means a Lower Likelihood That Employees Will Search for New Jobs
“Over the years on the issue of employee retention, a lot of times people leave a job for things that are beyond their control. Maybe they were in an accident, had a heart attack, or maybe they even retired. But other times people leave because they don’t like the job,” said Rich Thompson, senior director of research at the Myers-Briggs Company.“If you ask people ‘Do you have any intention of leaving?’ they’ll often say ‘Yes, I do. I’m planning to leave.’ But if you ask if they’re actively searching for a job, a lot of times people will say no. So there’s a disconnect in people’s behaviors at times compared to what they report. This is why we ask about both turnover intention and job search.”
The employee well-being research shows that as employee well-being increases, job searches decrease. And fewer employees searching for new jobs is connected to higher organizational performance.
Higher Well-Being Means a Lower Continuance Commitment
Continuance commitment, a part of Meyer and Allen’s three component model of commitment, explains that an employee’s commitment to an organization is a psychological state. Each of these three components (affective commitment, continuance commitment, and normative commitment) influence how an employee feels about the company that they’re working for.Continuance commitment is the amount you think that leaving the organization would be costly to you. When an employee looks at the pros and cons of quitting, they may think about the risks. Losing your salary, your seniority at the company, and perhaps even losing your work friends are examples. The theory states that older employees have a higher continuance commitment because they have more to lose if they were to quit.
A high level of continuance commitment means employees stay with the organization because they feel like they must stay due to the risks of leaving being too high.
Our research found that as employee well-being increased, they felt they had more to lose if they left, which is ultimately better for the organization’s performance.
Want to learn more about what you and your employees can do to help your well-being? Check out our tips here on what employees and employers can do to monitor and enhance well-being at work.
Or join Rich Thompson, senior director of global research for The Myers-Briggs Company, on March 31 for the webcast Research Revealed: Why Workplace Well-Being Is Key to Company Performance.
