Managing Employee Engagement and Retention for Small Businesses
Agencies, professional services firms, and even tech companies rely on people to move their business forward, which is why it’s critical for these people-oriented businesses to invest in employee engagement.
At its most basic, employee engagement is a series of interactions between you (the employer) and your employees to boost morale and enthusiasm in the workplace.
This article will outline best practices for employee engagement and retention for small businesses.
If you’re a business owner or operator and need help managing the people side of your business, we offer fractional HR services designed for small, growing businesses.
The Employee Engagement Model
Just like investments in sales and marketing, investments in HR should yield business results, especially for people-oriented businesses. Employee engagement can accelerate the growth of a strong employer brand, reduce employee churn, and help attract quality candidates. At a high level, here is how the employee engagement model creates business impact:
The Relationship Between Employee Engagement And Motivation
Employee engagement boosts morale and enthusiasm, but it can also lead to higher levels of employee motivation, too.
Sure, employees can be motivated by external factors such as pay raises, competition, and deadlines. But when employees feel engaged at work, they are more enthusiastic about doing work that generates business results. In fact, this internal motivation is arguably more effective than external motivators because self-motivated employees are less likely to burn out.
6 Drivers of Employee Engagement
At Same Page HR, we believe there are six main drivers of employee engagement. Here is a breakdown of each:
Care and Concern for Employees: Employees are more engaged when they feel their organization genuinely cares about their well-being, safety, and work-life balance. Demonstrating care and concern can be done through supportive HR policies, flexible work arrangements, a smooth onboarding process, employee assistance programs, and recognition of employees' personal and professional milestones.
Belief in Leadership: Employee engagement is significantly influenced by their confidence and trust in the organization's leadership. When employees believe their leaders are competent, transparent, and genuinely interested in the success of both the organization and its people, they are more likely to be motivated, committed, and engaged.
Open and Honest Two-Way Communication: Transparent and effective communication is a fundamental driver of employee engagement. Encourage open dialogue, actively listen to employees' feedback outside of quarterly performance reviews, and provide regular updates on company developments to foster an environment of trust and inclusion. These activities will help employees feel valued and respected.
Sense of Belonging: Employees who feel a sense of belonging and inclusion are more likely to be engaged. Promote this by encouraging diversity and inclusion, recognizing and celebrating individual contributions, and fostering a positive team culture where everyone feels accepted and appreciated.
Doing Meaningful Work: Employees are more engaged when they find their work meaningful and aligned with their values and aspirations. Clearly connect employees' roles to the company's mission and purpose, offering challenging and rewarding tasks, and providing opportunities for employees to make a positive impact on their colleagues, customers, or society.
Opportunities for Professional Development: Organizations that invest in their employees' skills, knowledge, and career advancement demonstrate a commitment to their growth and encourage loyalty and dedication.
Fun employee engagement activities and ideas
Employee engagement should be fun. But if you’re stuck in the HR swamp, it might not be your top priority. Here are some fun employee engagement activities to consider for your team:
Ice breakers — use ice breakers in Slack channels and at the onset of meetings to get people involved and in an active state of mind.
Sunny day fund — squirrel away a fraction of your monthly OPEX budget to include fun activities for your team on those sunny days when you want to be outside instead of in the office.
Lunch with leadership — schedule one-on-one or small groups to sit down and have lunch with a member of your company’s leadership team.
Community service — form a tighter bond between employees by volunteering at a local soup kitchen or organizations like habitat for humanity.
Perk petitions — encourage employees to submit ideas for new perks the company could offer. Review feedback and show employees you’re listening to their ideas.
Brainstorming sessions — give employees a chance to think creatively about a business challenge without constraints. This helps employees feel connected to the business and, who knows, the next big idea could come out of these sessions!
Show & tell — give your employees a platform to share their hobbies, side projects, or another part of their life outside of work.
Mentorship programs — connect senior employees with up-and-comers to preserve internal knowledge and give opportunities for professional development.
Gamification — turn activities like social media engagement into a competition, and give out prizes for the most engaged employees each month.
Measuring Employee Engagement
Pulse surveys are short, anonymous surveys sent out regularly (e.g., weekly or monthly) to employees. Designed to be answered quickly, they minimize disruption in the workplace and allow employers to identify issues early and take steps to address them. They also help employers recognize and celebrate areas of strength.
Tools such as Officevibe, Culture Amp, Survey Monkey, and Google Forms can help you deliver pulse surveys. Additionally, some HRIS systems have built-in capabilities to manage them. This can help you customize survey questions and quickly view and analyze the results directly in the system.
Simple engagement or pulse surveys sent via email or even Slack at least once a year can give employers a feel for employee satisfaction while also giving employees an outlet to express concern. These can easily be cobbled together in Google Drive or Typeform and administered by a teammate, a third-party partner like Same Page, or managed by a service like 15five or Culture Amp.
Employee engagement metrics
1. Net Promoter Score
One of the most commonly used metrics to measure brand affinity among a group of people, Net Promoter Score can be a good gauge of employee engagement. In an employee survey, ask On a scale of 0-10 (where 10 is most likely), what’s the probability you would recommend a career at COMPANY to a friend or colleague? Then, as a follow-up, ask Why did you give that rating?
Net Promoter Score is measured on a scale from -100 to +100. To calculate Net Promoter Score, subtract the percentage of respondents who gave a “6 or less” from the percentage of respondents who gave a “9 or 10”.
NPS = [ (% 9 or 10) - (% 6 or Less) ]
Let’s say, for example, you send out a NPS survey and receive the following scores:
9 or 10 — 45%
7 or 8 — 35%
6 or Less — 20%
Your NPS would be 25, because 45 - 20 = 25.
2. Retention Rate
Retention rate is the percentage of employees who stay with your company over a period of time. While all companies have some level of churn,
3. Employee Engagement Survey Participation
Periodically, your company should administer employee engagement surveys. While the surveys may serve a specific purpose, measuring the percentage of employees who actually take the time to fill out the survey is insightful in of itself. The results of your employee engagement surveys should reflect a majority of your employee population.
3. Employee Perk Usage
What percentage of employees are using the perks your company offers? This will help you assess two things:
How engaged are your employees with your current perk offering?
What perks should you consider adding and/or removing from your offering?
Calculating these metrics is pretty straightforward, but the data may live in disparate sources. Nothing a good spreadsheet can’t handle! Comparing the usage rates of each perk in a single view will help with this kind of analysis.
Build and Implement an Employee Engagement Plan
Employee engagement plans should be tailored to your employees. Need help implementing this at your company? Same Page HR offers fractional HR services for small businesses.
