Employee Retention vs. Engagement

Shawnee Love   •  
January 19, 2012

Two of the big buzzwords in HR are retention and engagement.  They are often used interchangeably and that is a shame because they are two very different things.

Retention refers to length of service and lack of turnover. Good retention means you have few people leaving your company.  Retention is evaluated with metrics like voluntary and involuntary turnover (aka layoffs and firings), and retention rates. Good retention usually means lower hiring and training expenses due to fewer replacements, so good retention is something HR teams often put a lot of energy into achieving.

Engagement encompasses a blend of culture, morale and productivity.  We don’t have a perfect “engagement ‘o meter” but companies with good engagement tend to see great participation rates, high morale, strong productivity, and fewer people problems such as interpersonal conflicts or attendance issues.

Interestingly, good engagement usually means you will also have good retention.  You will recognize companies who have success at engaging and retaining employees, because those are the places where you see happy, helpful people; quality products and services; and amazing customer service.

Good retention doesn’t imply good engagement. In fact, many companies that have poor engagement actually have excellent retention – of the wrong people. If you doubt me, think of the last time you waited in a horribly long line up that wasn’t moving.  I can say with a great deal of confidence that the engagement levels of employees in that place were low.  Retention may have been fantastic, but it is a poor measure when the product or service being delivered is terrible, customers are unsatisfied and employees are unhappy.

If I had to pick between engagement and retention, I’d start with engagement.  How about you?