Engaging employees with purpose boosts retention
Companies that engage employees with their corporate purpose experience lower levels of turnover, a new report has found, particularly among newer recruits.
The Talent Retention Study, which analysed data from 10.6 million employees at more than 400 companies using the Benevity platform, found that turnover of employees that engaged in charitable giving, volunteering or other positive social actions fell 24 per cent.
But the impact was most felt among employees with up to three years’ service. Turnover of employees engaged with corporate purpose with two years’ tenure was 50 per cent lower than among those employees without a connection and 52 per cent lower in those with 30 months’ service.
With the cost of replacing an entry level employee estimated to be as much as 50 per cent of their annual salary, and considerably higher for specialised team members, the report claims that there is an economic for those responsible for recruitment to leverage corporate purpose to drive retention.
It also predicts that the figures could rise in coming years as Gen Zers make up a greater proportion of the workforce. Career website Zety claims that 62 per cent of Gen Zers want to work for companies with a purpose beyond making profits, while 72 per cent would take a pay cut to do more meaningful work.
The study found that the findings hold true across regions but differ across industry sectors, with the reduction in turnover for those working in insurance just 14 per cent down against 60 per cent in retail and 53 per cent in professional services.
It recommends engaging recruits with corporate purpose as early as possible as that is key to participation and longer tenures, and offers seven ‘proven tactics’ to implement.
- Infuse purpose into onboarding, offering a taste of its impact.
- Communicate your company’s contribution and commitments.
- Activate middle management to champion social impact activities.
- Tap into and support employee networks to help new recruits find their ‘people’ and build a sense of community.
- Use apps to connect with remote workers, demonstrating an inclusive and equitable culture.
- Engage all year round, drawing on awareness days and national events to demonstrate company actions. Encourage employees to share their experiences.
- Give people a say on where corporate donations and grants should be targeted. More than eight in ten employees claim that the more they are engaged in charitable giving decisions, the more trust they have in the business.