How employee engagement impacts attrition

Recruitment is expensive. As well as the cost of sourcing a new employee, there’s the cost of training them and a potentially higher salary to consider. Add to that the impact of a vacant role on the rest of the team and the loss of knowledge, and it’s clear that the departure of an employee can have a huge impact on the business and the rest of the team. 

Therefore, organisations invest in, and monitor, employee engagement and fulfilment. Understanding the reasons that employees leave businesses enables them to implement plans to reduce attrition and increase retention, thereby lowering costs, reducing instability, and increasing morale.

Seven in 10 workers plan to change jobs in 2025, according to new research. This is significantly higher than the global average. A 2024 report by Ipsos notes that 44% of workers plan to leave their jobs due to lack of recognition. Low motivation, culture, management and new career opportunities are also common reasons but, unsurprisingly, pay and benefits are the main factor for people wanting to leave their current role. This is particularly important for workers aged 18-24. 

Every employee wants to feel valued and supported but, despite its importance across the workforce, pay is often overlooked in employee engagement discussions. If wages don’t keep up with inflation, employees struggle to make ends meet at home and this in turn affects their engagement at work.  Similarly, if employees feel that they’re being paid below market rate, or less than their colleagues, it’s easy to see why engagement would drop.

Employee engagement depends on financial stability and workplace culture. Fair compensation and a positive environment aren’t just nice to have – they’re critical for employee engagement and retention. Neglecting either can result in high attrition, with the associated costs and disruption that come with it. 

Clearly, there are a range of factors that employers need to consider when embarking on an employee retention drive. With pay and benefits being the most important factor for employees, that should be the first issue for employers to address. Consider:

• Salary benchmarking and reviews, to ensure salaries are competitive within the market
• Analysis of pay equity, to ensure fair pay across diverse employee groups
• Establishing pay ranges based on experience and performance, to enable in-role pay increases
• Training managers, to address unconscious bias in pay awards

However, when the budget simply isn’t there or the compensation package is already strong, there are other ways to increase staff retention:

• A great workplace culture, where inclusivity is encouraged and employees feel a sense of belonging, can create an environment that makes workers more loyal
• Leadership and management development programmes can help to overcome the problems created when employees are promoted into roles with no prior leadership experience, thereby reducing attrition due to poor management
• Open communication across the organisation can foster a sense of transparency and help employees to feel heard and valued
• Opportunities to upskill or receive mentoring can support employees in developing their careers within the business
• Employee recognition schemes ensure that strong performance is recognised and valued 
• Creating a wider benefits package, rather than simply looking at salary, can support employee retention through benefits they truly value – such as medical benefits, paid time off, and work-life balance programmes

The global economy is being impacted by the rise of AI, global conflicts, and climate disasters. The Singaporean workforce is additionally concerned about the cost of living, mental wellbeing, and job security. Workers are under pressure like never before. 

Recent reports highlight the continued importance of offering employees competitive pay and benefits, in order to alleviate some of their worries and therefore increase engagement and retention. 

Recognition, workplace culture, and wellbeing is also essential to employee satisfaction and businesses need to act now to address these concerns.
At Careerminds, we offer outplacement services to support employees through career transitions. Our packages provide peace of mind to displaced workers, whilst protecting the company brand and supporting the retention of existing staff. If you’re interested in learning more, don’t hesitate to contact us to connect with our experts and explore whether we’re the right partner for your business.

Jen David

Jen is a careers writer and CV specialist, with many years’ experience writing for leading careers platforms and her own business, CV Shed. She loves to support job seekers in progressing their careers, whether they’re looking to step up the ladder, take a sideways move, or change career entirely. She writes attention-grabbing CVs that show off her clients’ expertise and their value to a business, helping them to secure new roles quickly.

Jen also writes SEO blog content on a wide range of careers topics, for clients in the UK, US, Singapore and Australia. She has produced over 300 articles to date and also edits the work of other writers. She maintains her own blog to support job-seekers with up-to-date, best practice information on CVs, LinkedIn profiles and other related topics, and has a book available on Amazon Kindle, How to write a CV for the modern job market.