In the midst of high rates of employee turnover, companies need to use all the tools at their disposal to improve employee engagement and retention. One of these tools is 360-degree feedback. Learn more about the connections between engagement, retention, and a 360 feedback tool and how to make the most of feedback to enhance the employee experience and reduce turnover.
The Pressing Issue of Employee Turnover
Voluntary turnover rates have steadily risen over the past few years, reaching 32.7 percent for all industries in 2021. In some industries, that rate is even higher.
Employee turnover is a costly issue for companies, negatively affecting:
- Finances: Employee turnover is an expensive problem. In addition to recruiting costs to backfill positions, there are many indirect costs that come with high turnover rates, including training new employees and lost productivity.
- Productivity: When you’re understaffed or have a high percentage of new employees, your productivity can take a hit. This can hurt you financially and also keep you from achieving both short- and long-term business goals.
- Morale: As employees and departments struggle to accomplish their goals without key personnel, they can quickly become overstretched and discouraged. Seeing other employees leave may also make some feel they should do the same.
- Relationships: Both relationships among employees and relationships with customers can be negatively impacted when an employee leaves, especially when employees seem to come and go through a revolving door. Strong working relationships develop with time.
Employee turnover is a major issue, and it’s one that more and more companies are having to grapple with in the current job market.
The Connection Between Turnover and Disengagement
Employees leave their jobs for various reasons, but one major issue that prompts employees to leave is feeling disengaged. Employees today want to feel invested in their work and like valuable members of the company. And yet, many aren’t experiencing this ideal.
According to Gallup, just 36 percent of U.S. employees are engaged at work. That means the majority of employees are disengaged. For these disengaged employees, there’s not much keeping them at their jobs. They know their skills are in high demand at many other companies that are struggling to fill open positions, so why not try a new environment that may be more engaging?
Employers that want to reduce turnover and improve retention should focus on improving employee engagement. This is a powerful way to reduce turnover and stay fully staffed without having to take on the costs and disadvantages of ongoing recruitment efforts.
Even if you’re not struggling with high attrition rates, improving employee engagement has far-reaching benefits, including improved:
- Performance and productivity
- Employee morale and workplace culture
- Collaboration between employees
- Customer service
Employee engagement is critical in many ways to your company's success—including when it comes to retaining employees.
What Does Feedback Have to Do with Employee Engagement?
We’ve seen that improving employee engagement is key if you want to reduce turnover. So, how can you actually improve engagement? It may seem like an elusive goal, but there are practical steps you can take to make it a reality. Consider what problems are causing employees to become disengaged so you can proactively address these issues.
Employees want more feedback.
Employees can become disengaged for various reasons, but one prominent issue is a lack of feedback. This is an issue you can easily address to instantly boost employee engagement. Gallup data shows that when employees strongly agree they received "meaningful feedback" in the past week, their chance of being engaged increases by nearly fourfold!
When employees feel like they’re doing their work day in and day out without anyone even really noticing how they’re doing, it’s discouraging. On the other hand, hearing from others who notice and appreciate the work you do can increase an employee’s pride in their work, motivation to succeed, and desire to stick around.
Feedback encourages growth.
Feedback can also promote growth—another critical ingredient in the recipe for employee engagement. Research shows that, along with acknowledgment, employees want growth opportunities at their jobs.
They want to feel they’re making progress rather than getting stuck or even regressing in their performance. Feedback is a necessary first step in identifying areas for growth. Managers can follow this up with development planning to help employees remedy performance issues and sharpen their skills.
→ Read our case study to learn how a viaPeople client successfully utilized 360-degree feedback to improve culture and strengthen leadership.
How to Retain and Engage Employees with 360-Degree Feedback
There are various ways you can facilitate feedback to enrich employee engagement in your organization. One of the most effective methods is known as 360-degree feedback. It may also be referred to as 360 feedback for short or as multirater feedback.
This approach to feedback involves getting performance-related ratings and observations from multiple people who work with the employee in question.
Use a multirater approach to increase the impact of feedback.
Combining a variety of perspectives provides a rich and detailed picture of an employee’s performance. It can also cause employees to have more confidence in the feedback they receive.
If only an employee’s manager shares a point of criticism, for example, the employee may write it off as unfair or inaccurate. They may not be too far off in feeling this way at times since only 14.5 percent of managers strongly believe they are effective at giving feedback. However, if an employee hears the same critique from multiple coworkers, this will likely carry more weight.
When it comes to positive feedback, getting complimentary comments from multiple coworkers can go a long way in increasing an employee’s confidence and engagement. If an employee contributes a lot to their team and is appreciated by their coworkers, they deserve to hear that positive feedback.
Offer feedback frequently to keep employees engaged.
When it comes to using 360-degree feedback to increase employee engagement, frequency is another important factor to pay attention to. Remember that, in the Gallup study, it was employees who had gotten meaningful feedback within the past week who demonstrated such high levels of engagement compared to other workers.
Feedback should be gathered and shared on a regular basis in order to keep employees engaged. Providing feedback more frequently ensures that the day-to-day details of an employee's performance are recognized.
Prioritize both positive and constructive feedback.
When collecting 360-degree feedback, ensure that reviewers understand that both positive and constructive feedback are helpful to employees. Feedback that is all negative isn’t likely to improve employee engagement. In fact, it’s likely to have the opposite effect.
According to Gallup, among employees who felt demoralized from negative feedback, just 10.4 percent were engaged as a result. What’s more, four out of five of these employees started looking for a job elsewhere. Negative feedback should always be couched by positive feedback so employees are left feeling more engaged and more likely to stick around—not less.
On the flip side, feedback that is purely positive (while fine from time to time) won’t ultimately help an employee improve. Negative feedback shouldn’t sound like a reprimand but rather constructive insight to empower improvement and growth.
Keep Employees Engaged and Invested for Long-Term Success
360-degree feedback is a powerful tool for keeping employees engaged and reducing employee turnover. In addition to 360-degree feedback, there are other strategies you can employ to hold onto employees during the Great Resignation. Learn more in the Ultimate Guide to Combating Talent Shortages.
Ultimate Guide to Combating Talent Shortages
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