Engagement and Retention: Essentials

of Retention Tools 38
Beth Sibly

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 662
Setting the Context: Retention in the Broader Picture of Human Resources . . . . . . . . . . . . . . . . . . 663
Strategic Perspective: Employer Branding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 664
Operational Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 666
Risk Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 669
Dos and Don’ts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 669
Do Tailored Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 669
Be Aware of Employees’ Plans to Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 670
Leverage the Employer Value Proposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 670
Don’t Take “Off-the-Rack” Solutions: Focus on Tailoring Human Resource Efforts . . . . . 670
Do Gather Input from Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 670
Do Measure the Success of Your Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 670
Final Comments and Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 671
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 671

Abstract
As competition and skill shortages increase, companies are continuing their
efforts to find and keep the best people. CEOs and managers are drawing upon
a range of existing human resource practices and tools that have either a direct or
indirect impact on decreasing turnover and encouraging greater retention within
organizations. Practices such as employee satisfaction surveys, flexible work
practices, team-building activities, and employer branding can all influence
employee retention and are briefly introduced in this chapter. So too are other,
more people-based factors which influence employees such as management style,
type of work, organizational image, team atmosphere, and company culture.

B. Sibly (*)
Institute for Innovation Transfer and Project Management, Berlin, Germany
e-mail: bjs@inafu.de

# Springer-Verlag Berlin Heidelberg 2016 661

M. Zeuch (ed.), Handbook of Human Resources Management,
DOI 10.1007/978-3-662-44152-7_57
662 B. Sibly

Particular emphasis is placed on the role of employer branding in this context and
the need for employers to differentiate themselves as an attractive place to work.
The alignment of the values of an organization with the desired brand image
and human resource practices is critical for ensuring the delivery of its brand
promise to employees. It is recommended that managers take a holistic approach
to managing their human resources and to the development of retention strategies
for their organization. Key steps in this approach include: (1) finding out the
views of employees (via satisfaction surveys and other tools), (2) designing
employee benefits and human resource programs in such a way that they can be
tailored to suit the needs of the workforce and the individuals within it, (3) engag-
ing employees from all levels in the development and implementation of specific
human resource initiatives and activities, and (4) strongly linking human resource
activities to company marketing and branding. Potential benefits include greater
employee motivation and engagement, higher productivity, increased innovation,
improved customer satisfaction, stronger branding, and lower employee turnover
rates in the long term.

Keywords
Retention • Employer branding • Employee satisfaction (surveys)

Introduction

As the nature of the workforce changes, organizations throughout the world are
facing increasing competition and skill shortages. The attraction and retention of
qualified employees is a critical issue for managers of all levels. Human resource
practitioners are working more closely than ever before with marketing teams and
management to better understand the factors that influence employee decision-
making and satisfaction levels in regard to their workplace and to develop initiatives
that will set them apart from their competitors and attract the best people in their field
(Biswar and Suar 2013; Wallace et al. 2014).
The benefits of retaining good people are well accepted, and many organizations
are investing heavily in initiatives, campaigns, and long-term benefit programs that
encourage their best employees to stay with them for as long as possible. For the
organizations or companies themselves, they seek payoffs in terms of innovation,
employee satisfaction, company growth and profit, enhanced brand power, positive
employee engagement, productivity, improved organizational performance, and
customer satisfaction.
Indeed, regardless of the type of organization in question (private enterprise,
nonprofit, government, etc.), all managers want to keep their best people, and the
goal of improving organizational performance and outcomes – whatever they might
be – is the same.
Equally, the implications of high turnover in organizations are well understood
and include the potential for increased costs in terms of recruitment processes and
training; loss of expertise and corporate knowledge; instability in relationships with
38 Engagement and Retention: Essentials of Retention Tools 663

customers, clients, and partners; negative impacts on company branding in the eyes
of both customers and employees (existing and potential); lower levels of innova-
tion; decreased service delivery and outcomes (e.g., for NGOs or government pro-
viders); lower profit; and lower competitiveness.
A broad range of human resource tools and approaches already exist that have a
direct or indirect impact on decreasing turnover and encouraging greater retention
within organizations. Among other things, these practices include employee orien-
tation, training and development programs, compensation and benefit packages,
succession planning, employee and management satisfaction surveys, career path
development, team building, and flexible work practices. Other important aspects of
the work experience such as management style, type of work (work content),
organizational image and success, team structure and atmosphere, social contribu-
tions, and company culture can also have a significant impact on the satisfaction
levels of employees and the likelihood of them staying with their current employer.
In this chapter, the writer seeks to draw together some of the many aspects of
existing human resource practices such as the examples outlined above to provide a
holistic view of how organizations and managers can positively influence employee
retention. In this sense, there are no “new” tools or revelations in terms of retention
strategies, but rather a focus on selecting, tailoring, and implementing existing
human resource methodologies to have the best possible impact on the employees
of individual organizations. In this context, particular emphasis is placed on the
concept of employer branding.
It is hoped that this umbrella perspective will provide the context and background
to help in the development of a culture which fosters high employee satisfaction, low
employee turnover, and good organizational performance in the long term.

Setting the Context: Retention in the Broader Picture of Human

Resources

In its basic form, human resource management is concerned with how people are
employed and managed within organizations (Armstrong 2009). When managers
think about human resources, they often look to its more tangible aspects such as
recruitment, compensation and benefits, and training opportunities. These aspects
are fundamental to modern human resource management and have an important role
to play in the area of employee retention. However, in a broader sense, human
resource management involves all management decisions and action(s) that affect
the nature of the relationship between the organization and its employees (Beer
et al. 1984). In this way, many (if not all) organizational decisions are linked in some
way to human resource management.
From a “people perspective,” this means that the process and outcomes of
virtually all organizational planning, policies, and practices have the potential to
influence employee attitudes and behavior. Not only the daily work tasks, develop-
ment opportunities, and annual leave entitlements of employees but also the man-
agement style of their bosses, the external image and prestige of the organization, the
664 B. Sibly

atmosphere in their working team, the quality of the products and services delivered,
and the broader role of the organization in society – to name just a few factors. If
organizations wish to make human resources a real priority, they therefore need to
consider the development of employees as an integrated component in overall
organizational growth and development.

Strategic Perspective: Employer Branding

One strategy that is designed with exactly these interdependencies in mind (between
organizational goals and employee needs) is employer branding. Employer branding
is a relatively new concept whose principles are based on those of consumer
branding, but have been adapted to consider the needs of an organization’s internal
market: its employees. It is defined as a combination of functional, economic, and
psychological benefits provided to an employee by an employer and includes factors
such as compensation and benefits, sense of purpose, opportunities for development,
and employee recognition (Ambler and Barrow 1996).
Research shows that effective employer branding has the potential to create
competitive advantage, to build employees’ connection to the brand, and to improve
employee retention (Backhaus and Tikoo 2004).
From an organizational point of view, employer branding refers to the efforts of a
company to develop a clear view of what differentiates it from competitors and
makes it a desirable place to work – to both existing and potential employees
(Backhaus and Tikoo 2004). Externally, it has the potential to assist organizations
in the recruitment of a sufficient number of employees and a high quality of
employees. Internally, it has the potential to (1) enhance employee satisfaction,
(2) increase retention and lower turnover, (3) improve productivity via high
employee engagement, and (4) enhance the overall brand image of the company
(Robertson and Khatibi 2013).
Internal branding, according to Berthon et al. (2005), encapsulates three things:
“communicating the brand effectively to employees; convincing them of its rele-
vance and worth; and successfully linking every job in the organisation to the
delivery of the brand essence” (p. 153). This branding framework has been identified
as a key strategic approach for managing the awareness, perceptions, and expecta-
tions of an organization’s stakeholders in the long term (Cooper 2008). When
organizations fail to meet the expectations of their employees and customers, or to
deliver on their “brand promise,” they risk disappointment and losing them
altogether.
Employer branding also has the potential to help managers in the recruitment
process by attracting the kind of employees that are best suited to their organizations
and most likely to support the achievement of their company goals (Backhaus and
Tikoo 2004).
Retention is about making people (employees) happy, but it is also driven by
organizational goals and successes. In terms of the management of existing
employees, employer branding aims to directly improve productivity and retention,
38 Engagement and Retention: Essentials of Retention Tools 665

therefore also improving employee engagement levels and reducing turnover costs
(Ambler and Barrow 1996; Backhaus and Tikoo 2004). Employer branding has
potential flow-on effects for the development of identity, image, and culture within
an organization, as well as brand associations and brand loyalty. According to
Backhaus and Tikoo (2004), these flow-on effects have the potential to impact
both the attractiveness of the employer and the productivity of its employees, two
areas of critical concern for human resource and broader company management.
From a human resource perspective, Wallace et al. (2014) argue that employer
branding comprises three main components, namely, the development of the
employer value proposition, which characterizes the employer and is based on
culture, management style, and brand image; the marketing of the value proposition
to potential employees; and finally, the marketing of the value proposition to existing
employees so that they can bring these values to life. In a broader sense, this forms
part of an organization’s efforts to deliver on its “brand promise” both for the
customers and their employees (Maxwell and Knox 2009).
From a strategic perspective, the implementation of employer branding means
ensuring consistent branding throughout the organization, from product develop-
ment to service delivery, marketing and PR, values, human resource practices, and
corporate social responsibility. The alignment of the value setting and practices of an
organization among the employers and employees allows a consistency to develop in
the culture and gives the organization the best chance of delivering this culture to the
customer.
In its definition of the employer brand process, employer branding consultants
Universum (2014) capture the ongoing strategic activities of a firm such as market
intelligence, strategy development, performance measurement, and strategy execu-
tion, within a four-pillared framework comprising: (i) understanding, (ii) planning,
(iii) execution, and (iv) measurement. They draw many links between the “standard”
operating activities of a company in pursuit of its organizational goals and the pursuit
of a strong employer brand. This approach demonstrates the manner in which human
resource management activities and in particular employer branding are connected
and intertwined throughout the “business” of any organization and how the attrac-
tion and development of employees is interconnected with organizational growth
and development.
To take this strategic viewpoint one step further, Wallace et al. (2014) describe the
employer branding process as the formation of “employees attitudes and behaviours
so that the brand identity of their organisation is projected through their work
behaviour” (p. 23). Miles and Mangold (2005) conceptualize the employer branding
process by capturing this same idea in a way that the mission and values of an
organization drive the development of the desired brand image. This image is then
transmitted to various recipients through internal and external message modes such
as human resource management systems, PR systems, culture and coworker influ-
ence, advertising and PR, and customer feedback.
The successful transmission and subsequent acceptance of these messages lead to
a connection and psychological contract with the brand, and the potential outcomes
for the organization can include changes in positioning in the minds of customers,
666 B. Sibly

levels of engagement and employee satisfaction, customer loyalty, turnover rates,

and overall reputation (Miles and Mangold 2005).

Operational Perspective

From an operational perspective, the closer integration of employee-related issues

into the broader aspects of daily business also has implications for the coordination
of “regular” human resource activities. Jacobson (2014) suggests that the most
important human resource strategies for effective talent management start from
employer branding and include recruitment processes, rewards and recognition,
performance management, learning and development, change management, and
succession planning.
Indeed, employer branding is itself a broad concept and includes consideration
and development of factors such as company culture, attributes and values, and
perceived fairness within the organization. In addition, employer branding requires a
coordinated approach to ensuring meaningful work content for employees, appro-
priate management style and organizational structure, good performance of the boss,
strong relationships with colleagues, and a positive atmosphere with the working
team (good social dynamics). Managers also have to be aware that the quality of an
organization’s products or services, its perceived image and reputation, past suc-
cesses, current performance, and prospects for the future will also impact the
strength of the employer brand and the relationship built between employees and
the organization.
Furthermore, the complex nature of human beings means that an even greater
range of factors has the potential to influence employee engagement, satisfaction,
and retention in an organization, for example, the physical working environment and
conditions in the workplace, team-building activities, flexible work practices, career
path development, job security, corporate social responsibility initiatives, and
mentoring programs.
In this regard, the application of employer branding is useful because it helps
organizations to identify the many touch points of their brand with employees.
Ideally, this awareness can help them to develop their brand in such a way that it
leads to the fulfillment of organizational goals and to a positive impact on both
employees and customers.
Using the framework of early employer branding research in combination with
these tangible aspects of current practice, Universum (2005) designed a simple
model to show the key steps in the development of an employer brand, which they
define as follows:

Step 1: Research – The starting point in any employer branding campaign. Organi-
zations should undertake research to gain information about how their brand is
perceived internally (among employees) and externally (among customers, poten-
tial employees, and the broader community). Interviews, exit surveys, and
employee/management satisfaction surveys are a good place to start.
38 Engagement and Retention: Essentials of Retention Tools 667

Step 2: Employer value proposition – The employer value proposition (EVP – also
referred to as the employee value proposition) is the unique rewards and benefits
offered to employees by their employer, in return for their skills, experience, and
contribution to the organization. The EVP is critical for helping an organization to
differentiate itself and to attract (and keep) the best people in the face of
competition.
Step 3: Communication plan – The third step in the process involves the development
of a communication plan and the selection of appropriate channels for reaching the
specified target groups. If an organization wants to ensure consistent branding and
the harmonious articulation of its values, communication regarding employer
branding must be conducted in conformity with other corporate communication.
Step 4: Communication material – On finalization of the communication plan, the
communication material itself should be developed (document contents, graphics,
campaigns, etc.), again, in keeping with the overall brand promise, values, and
goals of the organization.
Step 5: Action – Finally, step five involves the ongoing implementation, review, and
adjustment of all of the activities undertaken in the previous steps (Universum
2005).

If this employer branding model is used as a basis on which organizations should

initiate their branding and retention efforts, the first step in the process is research.
Research is required in order to gain a real understanding of how a brand is perceived
among employees, customers, potential employees, and the broader community. For
the purposes of this chapter, the author will focus on the human resource function
and the internal market of the organization – the employees.
In order to find out how employees feel about their organization, management
needs to start by looking at their existing workforce: are the employees in the
organization generally satisfied? Do they feel valued and appreciated? Do they
regularly have the opportunity to provide feedback and input into the development
of the organization? What is the turnover rate of employees? Why do they leave?
Employee and management satisfaction surveys have the potential to provide
management with useful feedback on current employee attitudes to every aspect of
their work and working environment, from the performance of the boss to opportu-
nities for development, recognition, perceived fairness, and intention to stay or leave
the organization. Of course, such surveys are only useful when the survey design and
methodology are appropriate and when communication and follow-up with
employees are conducted in a meaningful way (see ▶ Chap. 37, “Engagement and
Retention: Essentials of Employee Surveys” for more detail on employee surveys).
In addition to giving management information on how satisfied or dissatisfied
employees are with the various aspects of their work, it also has the potential (again,
depending on the methodology) to provide insight into which of these aspects is more
(or less) important. This is invaluable for choosing which resources should be invested
where, when it comes to human resource activities. Do employees value personal
recognition over team-building activities? How do they feel about their prospects for
development? Are they good? Does it matter, in comparison to other issues?
668 B. Sibly

Satisfaction surveys will also help managers to identify if there are any differ-
ences in attitudes among employees of different position levels, departments, edu-
cational backgrounds, age, geographic regions, gender, or familial status. Distinction
among the various groups of employees within an organization is important because
it allows both the identification of the different needs of different groups of
employees, as well as the development of tailored human resource management
practices and activities that best suit the needs of these different groups.
Once employee surveys have been conducted and results received and analyzed,
management will be in a position to review what kinds of actions, in which area, and
with which level of investment might be best for their employees. The other sections
of this chapter provide practical examples of what steps might be taken in this regard
(see, e.g., ▶ Chaps. 39, “Engagement and Retention: Essentials of Culture and
Social Activities,”; ▶ 40, “Engagement and Retention: Essentials of Employee
Care,”; ▶ 41, “Engagement and Retention: Essentials of Idea Management” and
▶ 42, “Engagement and Retention: Essentials of Rewards and Recognition”).
The subsequent steps in the employer branding model (steps 2–5) have strong
links to the area of marketing and must be carried out collaboratively among the
human resources and marketing departments within an organization.
The development of the EVP, for example, can follow naturally when an organi-
zation knows what its employees like and value about their work and is able to
combine this with its values and goals as an organization. Without a clear concept of
what it offers, an employer will struggle to convince highly qualified candidates to
choose them over their competitors.
The development of a communication plan and communication material (steps
3 and 4) is also captured in the third pillar of Miles and Mangold’s conceptualization
of the employer branding process discussed in section “Strategic Perspective:
Employer Branding.” That is the development and identification of different sources
and modes of brand messages such as human resource management and public
relations (PR), culture and coworker influence, advertising and PR, and customer
feedback, all of which are transmitted to various recipients and play a role in
delivering the brand image and establishing a connection with the brand.
For recruitment purposes, organizations need to ensure that the company’s
desired brand image is reaching its target employees. These ideal or target candidates
need to develop knowledge of the brand in order to lay the foundation for the
development of a psychological contract between the employer and the employee.
This means careful selection of internal and external, as well as formal and infor-
mation advertising and PR approaches and consistent, values-based branding.
When done successfully, the employee brand image will develop, and depending
on the efforts and approach of the organization, outcomes can include changes in
employee satisfaction, perceived reputation, customer satisfaction, customer loyalty,
and turnover rates.
Employer branding is a constant process, and the key components in its devel-
opment such as employee satisfaction surveys, development of the EVP, and the
communication plan need regular updating to account for changes in competition,
broader market conditions, and workforce composition. Employees need different
38 Engagement and Retention: Essentials of Retention Tools 669

things at different times in their working lives, and in addition to their own personal
circumstances, the broader context of the industry and the economic environment
can have a significant impact on their needs over time.

Risk Perspective

Managers who fail to proactively develop and implement retention strategies risk a
range of negative employee-related outcomes for their organization including lower
productivity and engagement levels, increased absenteeism, increased employee
turnover, and lower product and service quality (Marley-Wallace 2007).
Furthermore, they face potential short- and long-term costs such as loss of
corporate knowledge and expertise, loss of established customer/partner relation-
ships, and increased costs in terms of recruitment and selection processes and the
training and development of new employees. In addition, the creation of a negative
atmosphere through changing teams/constant turnover (for both employees and
customers) can result in lower productivity, poorer customer service, lower rates of
innovation, and vulnerability in the face of competitors.
Finding and keeping the best people is beneficial for organizations and, as a
principle, is not a difficult concept to sell – almost all developed-country managers
would agree with this. The challenge is finding a balance in achieving this. On the
one hand, organizations need to achieve their objectives: make profit, deliver
services, increase client base, find new resources, improve education outcomes,
etc., whatever they might be. And on the other, employees need to make a living,
to be intellectually satisfied and to find meaning. The right amount of autonomy,
flexibility, opportunity, and recognition must be balanced with incentive, pressure to
perform, and responsibility. Too much of anything (e.g., continual increases in
financial compensation) is unsustainable and will bring its own negative outcomes
in the long term, just as poor compensation or lack of recognition will.
Organizations need to use the knowledge they gain from research and employee
feedback to make decisions on how to make the best use of their allocated resources
in terms of their people. Effective employer branding and tailored human resource
measures can help to ensure the biggest impact for the financial resources available.

Dos and Don’ts

Do Tailored Research

Conduct tailor-made research to find out how the organization is perceived both
internally and externally: among current and potential employees, customers, and the
broader community. Design and implement surveys based on organizational struc-
ture, context, and needs, and make sure that research is scientifically based, able to
be implemented on an ongoing basis, and comparable.
670 B. Sibly

Be Aware of Employees’ Plans to Change

The true extent of employee dissatisfaction often only becomes evident after
employees have already decided to leave an organization. At this point, taking action
to enhance retention or to “save” good people will most likely result in a waste of
resources. Before investing in measures to enhance the retention rate, organizations
need to know the reasons why its people leave. Exit surveys and interviews can help
provide this information, together with employee and management surveys.

Leverage the Employer Value Proposition

To maintain a competitive advantage as an employer, invest in the definition of an

employer value proposition and commit to its ratification across the organization –
be sure that you know who you are and what you offer as an employer. Companies
who deliver on their brand promise and create the expected working environment for
employees are much more likely to develop employees who are able to deliver the
brand promise to the organization’s customers. This is good for the employer, the
customers, and the longer-term future of the organization.

Don’t Take “Off-the-Rack” Solutions: Focus on Tailoring Human

Resource Efforts

Be sure to avoid the implementation of standardized human resource measures that

proclaim to improve employee satisfaction and retention. Use company-specific
research results and the input of employees to develop and implement only the
measures that make sense for the organization and the people working within it.

Do Gather Input from Employees

In addition to the research results and to the information gathered through satisfac-
tion surveys and exit interviews, encourage employees to take part in the develop-
ment of ideas (or giving of feedback) regarding human resource activities.
Commitment and buy-in are much more likely to follow, and activities have a greater
chance of being targeted toward the real needs and wants of employees.

Do Measure the Success of Your Efforts

Keep track of the performance of the organization in terms of retention and human
resource efforts. Measure and publicize satisfaction rates, retention rates, and take-up
rates of employee events, training programs, or social activities. Set organizational
goals regarding gender equality and workforce participation and make departmental
38 Engagement and Retention: Essentials of Retention Tools 671

heads and individual managers responsible for achieving them. Track the progress of
the organization against key performance indicators over time.

Final Comments and Outlook

Retaining good employees makes sense for an organization’s bottom line. Lower
recruitment costs, higher productivity, and greater customer satisfaction are just
some of the potential benefits.
Both logic and experience also suggest that employee attitudes and employee
satisfaction must be linked with employee retention. It makes sense after all that
happy and engaged employees are more likely to be motivated, productive, and
committed to their current jobs than unhappy or dissatisfied employees.
Organizations need to consider the needs and wants of different groups of
employees across the many tangible and intangible aspects of human resource
management activities and to tailor their human resource practices in such a way
that it best meets the needs of their specific employees.
Customized research and the facilitation of regular employee input can help
organizations to target their human resource spending in a way that brings them
the “biggest value for their buck.” The development of a distinctive and consistent
employer brand will help to ensure that the brand promise is delivered not only to
employees but also to customers, shareholders, and broader stakeholders.
The implications of this are that managers do not need to develop a whole suite of
new human resource initiatives to directly target or influence retention. In fact, there
are no real “retention tools” that managers can pick off the shelf and apply with the
expectation that retention numbers are going to go up. High retention, or low
turnover, is an indirect result of the one or many parts of the “package” that
employers offer to employees. Good retention rates can only be achieved when a
combination of factors come together in a way that provides a valuable and worth-
while exchange from the perspective of employees – in a sustainable way for the
employer.
Organizations should therefore focus on developing a holistic and strategic
approach to values and branding which is based upon the needs of their own
employees. By ensuring that this approach becomes an intrinsic part of daily
operation, the branding and values will filter across the organization and become
absorbed in everything that they do.

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