Attracting and retaining top talent is a strategic imperative for leaders, emphasizing the need to focus on employee engagement and experience. Engaged employees not only contribute to a positive workplace atmosphere; they are also more productive, innovative, and committed to their roles, which directly enhances organizational performance and success. This blog post will delve into the significance of fostering employee engagement and how tools like Microsoft Viva Engage, part of the Viva Suite, can significantly boost retention. Glint, a people success platform now integrated into Viva Suite, emphasizes that engaged employees are 87% less likely to leave their organizations, further underscoring the importance of cultivating an environment that promotes commitment and advocates for the company as a great place to work.
Viva Engage and Employee Retention
As part of Network Analytics, we report a proxy of employee retention to not only highlight the value of Viva Engage but also highlight opportunities to more deeply engage employees in order to further improve the employee experience. In developing this metric, we’ve explored the relationship between Viva Engage usage and employee retention and consistently find — in line with research from Glint People Science — that employees who use Viva Engage have higher retention rates than those who don’t. Looking at the 1,000 largest Viva Engage customers (in terms of monthly active users), we see the employees at companies that using Viva Engage have an average yearly employee retention rate that is 16 percentage points higher than those who didn’t use Viva Engage (93%-77%). Note: All data has been anonymized and aggregated prior to analysis. Any statistics, trends, or insights shared are based on collective data.
We have also found that the difference in retention rates increases the more intensely the employee uses Engage. That is, employees who write or react on Engage have higher retention rates than employees who only view; employees who only view on Engage have higher retention rates than those who don’t use Engage at all.
While we can’t say that using Viva Engage causes employees to stay at their jobs longer, we can say, at the very least, data shows that engaged employees tend to gravitate to Engage and that Viva Engage helps a company to activate engaged employees at scale.
We're exploring whether using Viva Engage has an effect on how long employees stay with a company. Direct experiments aren't possible in this case, so we've turned to existing data for insights. We observed this trend: companies with a higher percentage of employees using Viva Engage also show higher employee retention rates after one year. We looked at different industries and adjusted for factors like company size, country, and industry type. Our analysis suggests that for every 10 percentage point increase in Engage usage within a company, there's an associated increase of 1.1 percentage points in the rate at which employees are retained, annually. Notably, this retention increase holds true whether comparing different companies or when tracking the same company over time. It's not definitive proof that Viva Engage alone boosts retention, but it indicates that Viva Engage, alongside other employee engagement strategies, seems to be linked to better retention outcomes.
Average of share on Engage and employee retention rates by industry
To put this impact into perspective, let’s assume a company has 10,000 employees and 70% of their employees are using Viva Engage. Increasing usage to 80% (1,000 additional employees using Engage) would lead to 110 more employees retained within the year. The cost of replacing an hourly employee is estimated to be $1,500. This would translate to $165,000 in yearly savings. The cost of replacing a salaried employee, on the other hand, is estimated to be 50%-200% of their annual salary. Assuming a $60,000 average yearly salary and the cost of attrition being 50% of their yearly salary, the potential savings in retention costs is $3.3 million.
As excited as we are to share these findings, we are even more excited to continue expanding the value of Viva Engage by creating features and experience that improve the employee experience. For more information about Viva Engage Network Analytics, check out this blog post (Network Analytics available now in Viva Engage - Microsoft Community Hub).