Staff satisfaction, engagement and retention

Satisfied and engaged employees are more committed and connected to their roles, their teams and your business. Keeping these productive and engaged staff is especially important in a competitive and challenging recruiting environment.

Why staff satisfaction and engagement is important

Employee satisfaction and engagement affect your business's productivity and profitability.

Employees who are satisfied and engaged are more likely to:

  • be committed to their role
  • stay with your business
  • work hard and be willing to upskill and take on extra responsibilities
  • take pride in their job
  • want to come to work
  • be involved and invested in wanting your business to succeed.

This results in:

  • reduced recruiting and hiring costs
  • decreased conflicts and grievances
  • higher levels of workplace morale and respect
  • lower levels of absenteeism
  • satisfied clients and customers
  • improved quality of work
  • improved collaboration, innovation and creativity
  • increased business productivity and profitability.

On the other hand, employees who are dissatisfied and disengaged are more likely to:

  • look for other jobs
  • not be concerned with productivity or profits
  • do the bare minimum
  • take many leave days
  • be vocal about their discontent and create a toxic work environment with low morale.

Webinar recording: Becoming an employer of choice

Watch our webinar on becoming an employer of choice for information, advice and resources on increasing staff satisfaction, engagement and retention.

How to increase staff satisfaction and retention

There are many things you can do to increase employee satisfaction, engagement and retention in your business. These activities don't need to be expensive or complicated – they just need to focus on creating the best employment experience for your employees. Consider the following:

Communication

  • Make sure your business has a clear vision and share this with your employees.
  • Be clear about how you expect employees to contribute to your business. Make sure every employee understands:
    • what they are doing
    • where they are doing it
    • when they are doing it
    • why they are doing it
    • how they are going to do it.
  • Keep employees informed about what's happening in your business, any changes you foresee and your plans for your business's future.
  • Ask employees for their opinions and encourage employee feedback.
  • Communicate in ways that suit your business and employees. What works for one business will not necessarily work for the next. Choose the right tone to reflect your business culture.
  • Be open, transparent and accessible to your employees.

Involvement

  • Create a good onboarding process to make new employees quickly feel part of the team.
  • Try to get all employees involved by encouraging new ideas and being open to different points of view.

Acknowledgement and recognition

  • Find out how your employees prefer to be recognised for achievements or hard work (e.g. publicly or privately, written or verbal, awards or rewards).
  • Acknowledge and celebrate milestones (e.g. birthdays, anniversaries with your business and their accomplishments outside of work).
  • Celebrate employees who are leaving and acknowledge the contribution they made to your business.

Work-life balance

Relationships and interaction

  • Invest time to maintain good relationships with employees.
  • Organise social activities outside of work.
  • Create workplace traditions.
  • Get to know your employees' personalities.
  • Trust and empower employees.
  • Manage poor performance and behaviour in a solution-focused way.

Career support

  • Offer training, development and mentoring opportunities.
  • Keep existing employees in mind before starting a recruitment process to fill a position.

Action item: Implement 3 activities

Pick 3 of the activities listed above that you think could make a difference in your business, and follow these steps:

  1. Think of practical ways you could implement these activities in your workplace.
  2. Set up a team meeting and discuss your ideas with your employees.
  3. Invite employees to give feedback and suggest their own ideas.
  4. Consider all feedback and decide what you'll do.
  5. Consider allocating responsibility for each activity to different staff members and involving both managers and other staff.
  6. Make the necessary preparations, set a start date, communicate this to your staff, and get started.
  7. Monitor and review staff engagement and satisfaction levels.

Measuring staff satisfaction and engagement

Measuring staff satisfaction and engagement will:

  • help you identify problems in your business before they get out of hand
  • give you the opportunity to make the right improvements.

Top 5 tips for measuring staff satisfaction

  1. If you're going to the effort to measure staff satisfaction, act on the results.
  2. Be prepared to hear negative feedback and to handle it with a solution-focused approach.
  3. Make sure your employees understand why the activities are important.
  4. Communication must be two-way. Employees must feel confident that their feedback is being listened to.
  5. Remember privacy and confidentiality:
    • if you share feedback or results, don't identify individual responders
    • consider giving employees the option to submit feedback anonymously.

How to measure staff satisfaction

Options for measuring staff engagement and satisfaction include:

  • onboarding surveys
  • regular one-on-one discussions with employees
  • employee feedback processes
  • employee satisfaction/engagement surveys
  • exit interviews.
Thumbnail of employee exit feedback Word document form

Exit interview template

To help you get started, use this employee exit feedback form when an employee leaves your business. You can adapt it to your business needs and branding.

Consider the feedback you receive and see what changes you can make to improve employee satisfaction.

Indicators of staff satisfaction or engagement issues

High levels of absenteeism, sickness or turnover may be signs that satisfaction and engagement is an issue.

Ratio of sick days to total paid days

Measuring the ratio of sick days taken to total paid days can give you an indication of staff satisfaction. It can also help inform work health and safety measures. A high ratio of sick days to total paid days could mean that your employees are unhappy at work or injuring themselves at work.

If this is the case:

  • consider some morale-boosting activities
  • review your work health and safety policy.

Also look at the days most of your staff take sick days. For example, if your business is open Monday to Friday and absences usually occur on a Monday or Friday (rather than mid-week), this might indicate a lack of job satisfaction.

You can use the following calculator to work out the ratio of sick days to total paid days ratio over a specific period (e.g., 12 months). To do this, simply type the relevant numbers into the fields below.

To make the result meaningful:

  • look online to find average absenteeism rates in your industry
  • ask other business owners in your industry.
Calculate sick days to total paid days ratio
$$\text{Sick days to total paid days ratio} = \frac{\text{Total sick days}}{\text{Total paid days}} \times 100$$
Show calculator

Staff-turnover ratio

Every workplace will experience staff leaving. Different industries will have varying levels of staff turnover. If you're not sure what acceptable rates of staff turnover are, you can speak to other business owners in your industry or do research online.

A very high staff-turnover ratio can indicate your staff are unhappy at work. Addressing their issues may help you:

  • reduce the amount of time and effort you need to spend recruiting new staff
  • retain experienced staff who'll benefit your business.

Use the following interactive calculator to help you work out your staff-turnover ratio. Simply type the numbers relevant to your business into the appropriate fields, for example, the number of staff who have left in a 12-month period and the average total number of staff across the same 12-month period.

Calculate your staff turnover ratio
$$\text{Staff turnover ratio} = \frac{\text{Number of staff who left}}{\text{Total number of staff}} \times 100$$
Show calculator

Also consider...

  • Last reviewed: 28 Sep 2022
  • Last updated: 30 May 2024