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 (feel free to weigh in here with your own thoughts, data or case studies, by the way — Rachel needs data, and you may have more than I do):
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% 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% 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%).
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% 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.
