The challenge of employee retention is more relevant than ever for many companies. With voluntary turnover rates skyrocketing in recent years, employers must explore why their people are quitting and how to address employee satisfaction in a way that improves retention and reduces turnover.
Since employees consider work to be a primary source of meaning in life, they are unlikely to feel satisfied if they can’t find meaning in their work. According to research conducted by Benevity, 53% of Gen Z (the generational cohort following millennials) believe it is very important for their work to have meaning, and 71% would accept less pay to do more meaningful work.
The Connection Between Purpose And Retention
Employee satisfaction and retention can be improved by connecting employee efforts with a meaningful company purpose. A company's purpose is more than just a slogan or mission statement. It encompasses organizational goals and values, explains why the company exists, shapes its culture, and drives its employees to perform their best and remain loyal to the organization.
“People want more than fair day’s pay for a fair day’s work; they want to find alignment with purpose.” - Michael Schrage, visiting research fellow at the MIT Initiative on the Digital Economy
According to Michael Schrage, a net purpose score reflects if an employee would advocate for the organization and its purpose by asking if “they feel like the organization stands for something” and if “they feel like the organization reflects and honors the principles and purposes for which it says”. Schrage found that many employees have low net-purpose scores, with 72% of respondents stating that they assign a high degree of importance to working in a company with a purpose they believe in and only 49% saying they believe in their organization’s purpose.
There is an evident link between an employee’s connection with a company’s purpose and how long they stay at a company, especially for new hires. Companies observe a 52% lower turnover rate among new employees who are involved or connected with their company’s purpose (“new” refers to employees who have been with the company for 2.5 years or less).
This data reveals a powerful opportunity for company leaders to connect new employees with the company’s purpose and encourage them to participate in purpose-driven initiatives. This is key to producing longer tenure and overall employee satisfaction. So, what are some tactics companies can apply to increase their employees’ sense of purpose from day one?
5 Ways To Engage Employees With Purpose To Increase Retention
1. Educate employees on the health benefits of living purposefully.
A strong sense of purpose contributes to one’s overall health and happiness, both inside and outside of the workplace. For some employees, fully understanding and engaging with their company’s purpose may seem like a waste of time; until, of course, these same employees end up burning out and feeling meaningless in their day-to-day work. Then, they quit.
Companies can avoid this cycle and improve employee retention by educating them on the importance of purpose. Not only will this improve employees’ emotional, psychological, and physical well-being, but by valuing the purpose of their work, they are more likely to remain motivated and perform at a higher caliber. A purpose challenge is an effective tool for engaging employees with purpose by educating them, encouraging participation in purpose-driven activities and rewarding them for their efforts.
2. Prioritize purpose during onboarding.
The likelihood of turnover decreases for new employees who are connected to their company’s purpose. However, Benevity’s research shows that employees who have been with a company for under one year are less likely to engage with company purpose than their longer-employed peers. This reveals that companies need to be intentional with how they communicate the company’s purpose during onboarding processes.
Rather than simply mentioning their company purpose to new hires, companies could provide them with donation currency or organize group mission-driven activities for all the new cohorts, creating an opportunity for purpose-building in addition to team bonding.
3. Lead by example.
Employees tend to look to their leaders as examples of which qualities to strive for and which actions to take. Therefore, leadership commitment to company purpose sends the message that the rest of the company should follow their steps. Consistently communicating the company’s commitments and contributions to a purpose or cause will help employees see the value of involvement.
4. Connect employees’ work with the greater impact.
Every employee should believe their work is valuable. Employers must make company goals clear while providing employees with an understanding of how their work contributes to the bigger picture. Giving employees a “why” to their tasks allows them to understand their part in achieving larger-scale goals, motivating them to perform their best and integrating a sense of purpose in their workday.
5. Create opportunities for employees to grow in all aspects of life.
Good employees are an investment. Companies often provide employees with the tools and training to further their development within their area of expertise, but often undermine the importance of fostering growth in other aspects of life. The dimensions of one’s well-being go far beyond occupational. An employee’s well-being also consists of physical, emotional, financial, social, intellectual, and environmental factors.
Investing in overall employee well-being is vital to promoting happiness within a company and ensuring that employee health is optimal for performance and productivity. Therefore, incorporating a holistic wellness program can make all the difference in employee retention performance. Such programs acknowledge the fact that every employee is a unique individual with a complex scope of needs and provides them with the resources to nurture those needs.
The importance of company purpose continues to grow as employees search for meaning in their work, especially younger generations. It is evident that there is a strong connection between company purpose and employee retention. However, many employees report low net-purpose scores, highlighting the fact that companies must prioritize purpose engagement.
Employees want to feel valued, both in the sense that their work contributes to a greater goal and that their overall well-being is being supported. By incorporating strategies to create a sense of meaning within the workplace, companies can experience greater retention and employee satisfaction.