I received a question from Rachel on my blog post, “The 5 Big Ideas of Enterprise 2.0 -- Number 4: Enterprise
2.0 = Retention = Success.”
Here’s Rachel’s question:
“I am conducting research at the moment and I’m trying
to back up the claim that social media increases employee retention rates, but
I am struggling to get any hard facts and figures - do you have any?”
As I worked to answer that question, I realized I wanted to
post a list of useful resources too, so I’ve decided to post my answer to
Rachel in the form of a new blog post. Here goes:
Rachel—
There are a number of ways I can think to answer you, but
the first is to point out that while most companies do have an
intranet, and I think a majority of them still haven’t realized
that making their intranet into a social workspace could benefit the
organization, I do understand that social computing can’t in and of itself
create employee retention. Not in a direct way.
If you have an environment with no social computing and a
certain rate of employee retention and then you generically install social computing,
I don’t think you're going to see the employee retention numbers change
significantly. It’s what you do with social computing that matters. It’s where
and how you apply it that matters. What you need to be focused on is this: what
are the conditions and factors within an organization that do impact employee
retention more directly? And once you’ve identified those, which of them can be
enhanced and more effectively facilitated using social computing?
Here are some answers to those questions:
Studies certainly show that overall job satisfaction
directly impacts employee retention numbers. McKinsey did a survey and found
that among the companies they surveyed that had installed social computing
tools internally there was a median 20 percent increase in employee
satisfaction. Therefore, you can draw a connection between social computing and
employee retention by way of the increased job satisfaction delivered by social
computing.
Within the general category of job satisfaction are the
specific elements of employee recognition, employee productivity, and
employee engagement. Where employees are
able to be participative and empowered, they tend to be more productive and
more engaged. And where they’re more engaged, they tend to stay. Here are a
couple of interesting stats related to both productivity and engagement:
Productivity: An
MIT study found that in organizations where employees had a strong online
social network, they were 7 percent more productive than in organizations where
they didn’t have strong online social networks.
Engagement: A study
by the Corporate Leadership Council found that when employee engagement
increases, you see a corresponding increase in employee retention (up 87
percent)
Related to this last point is a survey finding by Salary.com that the
top three reasons for low job satisfaction in 2009 were
- Inadequate compensation
- Inadequate development opportunities
- Insufficient recognition
I point this out because, given social computing’s two-way
communication capabilities, it can be an effective tool for increasing
opportunities for employee input which can lead to opportunities for attention
and recognition. And that recognition achieved through the social computing
environment can lead to increased job satisfaction, which, in turn can improve
employee retention.
But perhaps most telling in the Salary.com survey results
was the fact that the number 1 reason employees said they stay at a job is good relationships with co-workers. This brings us back to the power of social networking—it
not only makes people more productive, but if employees are able to use the
network to build relationships with each other, that can positively impact
their decision to stay with the company.
Here are some additional resources that might be helpful
to you:
The MIT study I mentioned is discussed in this article at
the AppGap: The ROI of Being Social at Work.
The McKinsey study can be found here: How Companies are Benefiting from Web 2.0 (unfortunately this one will cost you money to
download, but you can see a screen shot of some key survey findings in this
recent blog post of mine: We’re so excited
to learn about Enterprise 2.0 -- part 2.
This is the Salary.com
annual job satisfaction survey I
mentioned.
You may find it useful to read this blog post I wrote about
the importance of building relationships at work, the effectiveness of social
computing in that effort and the impact it can have on engagement: Social Computing as an Engagement Tool: The Enterprise
2.0 Relationship/Engagement Virtuous Cycle.
Related to my point in that blog post, a Forrester study: Corporate Social Networks will Augment Strategic HR
Initiatives, which shows that “Strong
personal ties increase employee retention” (this is another one that will cost
you money to download).
And finally, that figure of 87 percent improved retention
where engagement increases comes from this report by the Human Capital Institute: The Value and ROI of Employee
Recognition.
Summing up, then, to achieve better employee retention
through social computing tools is possible if you apply those tools to enhancing areas of your operation that are
known to impact retention, such as:
- Employee recognition
- Employee productivity
- Employee engagement
Retention is a by-product of getting these things right. I hope
this helps. Thanks for reading.
Ethan Yarbrough is co-founder and president of Allyis.