Measuring the Organizational ROI of Talent Retention – How Engagement Factors In

Organizational ROI of Talent Retention
Measuring the ROI of Talent Retention

For as long as human resources has existed, the ability to retain talent in order to get some type of return on investment has been a major focus of most organizations. But, this is often an objective goal that can mean different things to different types of companies.

Why do we place so much emphasis on talent retention as a measure of success? After all, just because employees stick around for the long haul doesn’t mean they are actually being productive. In recent news, workforce studies have shown quite the opposite — people are disengaged and discouraged about their jobs. Gallup Poll puts this figure somewhere around two-thirds of the adult working population. That’s a lot of “retained” talent that’s going to waste.

How can organizations improve both retention rates and gain a positive ROI at the same time?

In terms of actually improving the bottom line whilst increasing retention rates among employees, the key to success is placing the focus on actively engaging employees. Why is this so critical? When employees believe that they have a real impact on the organization, are included in the decision-making processes, and sense their value to the corporate leadership – they are more apt to be active participants in their roles, which means they are working on a higher level than disengaged employees.

In other words, engaged workers are loyal and they see the bigger picture of how they fit into the success of the company.

A Mercer survey of 12,500 employees in a US based financial services firm discovered that there are certain drivers of engagement that can lead to a more positive ROI, including:

  • The opportunity to do challenging work daily
  • An accessibility of training, information and resources
  • The ability to see and reach certain career objectives

Stop and think about these factors for a moment, as they relate to your own workplace. Do you offer a work environment that’s supportive of your employees’ ability to learn and to grow in their careers? Do you offer challenging enough tasks and rewarding projects?

Now, getting back to the ROI of retention and how engagement fits into things.

The same Mercer study revealed that by increasing the favorable scores of the above engagement drivers by as little as 5 percent resulted in a 3 percent increase in retention, which when calculated by recruitment terms resulted in a $3 million annual cost savings – just in recruitment, training, and customer retention. That’s a fairly positive ROI, by any standards!

How can a company improve retention and get this kind of ROI?

There are a number of ways that any company can start focusing on improving engagement and retention rates.

  • Provide regular and timely feedback on specific concerns that employees have, focusing on empowering employees.
  • Clearly explain and give examples of performance expectations and how these actions impact the company for the best.
  • Carefully match up employee skillsets and interests with projects and tasks so they have a chance to shine.
  • Be open and transparent with communications, guiding employees towards self-motivating behaviors.

By following the above tips, your organization can come closer to producing the kind of engagement and ROI that it needs to leverage as a leading company.

For more ideas about increasing employee engagement, please be sure to review our previous blog posts at Thymometrics.


For more about how Thymometrics can help your company retain top talent, email info@thymometrics.com, call +1 646 760 9323 (US) or +44 (0) 1223 750 251 (Europe) or visit thymometrics.com.

Image courtesy of franky242 at FreeDigitalPhotos.net

About the author

David Godden

An online marketing entrepreneur with over 18 years experience in the high-tech sector, specialising in HR SaaS solutions. Responsible for the marketing success of several US and European-based start-ups and the international launch of ExactTarget, Pardot and eTrigue. https://uk.linkedin.com/in/dgodden

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