Fluctuation and “great resignation” are currently on everyone’s lips.

Also in Germany data shows that more and more employees are rethinking their relationship with their employers and looking for alternatives on the market. How can companies still retain employees?

From Klementine Klein

Rising fluctuation puts companies under increasing pressure

 56% of CEOs surveyed in August 2022 said that increasing employee turnover is a relevant issue for them (Statisitca). The recent Gallup Engagement Study also showed that 26% are looking at the market for other options and 14% are already actively looking for a new job. Most notably, this number is twice as high as in previous years and the first time it is higher than for U.S. employees.

Individual empowerment increases satisfaction and engagement

Managers can learn a lot from numerous studies on turnover. Some of these studies have shown that employees who are psychologically empowered are more satisfied with their jobs and more engaged (Seibert, Wang, Courtright, 2011). Psychological empowerment is uniformly defined as a combination of four cognitions: meaningfulness, self-determination, competence, and efficacy. Meaningfulness refers to the fit between the demands of one’s job and one’s beliefs. Self-determination is the freedom to initiate or regulate one’s own activities. Competence refers to one’s belief in one’s ability to successfully perform work activities. Effectiveness is the belief that one’s own work has an impact on activities and outcomes in one’s own field.

Empowerment can lead directly to higher retention

When people in organizations feel these four elements in their everyday work, their satisfaction with their job increases. Lived autonomy and self-determination lead to employees shaping their job in the way that suits them best. Perceived competence and effectiveness strengthen the feeling of realizing one’s own potential.  Meyer, Becker, and Vandenberghe (2004) found a strong relationship between intrinsic forms of motivation and affective commitment. When people see a high fit between their values and their job, their commitment to the organization and willingness to contribute are also strengthened. Theoretically, self-determination and the associated assumption of responsibility can be perceived as an additional stressor. However, science shows that by being able to influence and have a say in these stress factors themselves, the benefits outweigh the risks. Reinforced by competence and effectiveness, evidence shows that empowered employees perceive their work as less stressful. When invested in an employee’s empowered work experience, it is unlikely that a comparable ratio will be readily available in the labor market. As a result, the net benefits of alternative employment opportunities decrease, and so does the likelihood of turnover (Griffeth, Hom, & Gaertner, 2000).

How can empowerment be strengthened?

 Individuals who are particularly good at self-reflection have a good sense of their competencies, the fit of their job with their values, and how they would like to work. Managers can support empowerment of their employees by assisting in reflection. For example, a leader may be supported in reflecting on what kind of leadership style fits them. When the right fit is established here, they feel more empowered and effective in their leadership role (Schermuly, Creon, et al., 2022). In addition, studies have shown that information sharing, decentralization, and participative decision making – pushed by strong leaders, promotes empowerment in organizations (Liao et al., 2009).