The Impact of Tenure on Employee Engagement and What to Do About It
Employee engagement training experts define employee engagement as the combination of employee advocacy, discretionary effort and intent to stay.
- Employee Advocacy – Do employees think and speak highly of the organization – its leaders, managers, employees, products, quality and future outlook?
- Discretionary Effort – Do employees think of ways to do their jobs better, improve service delivery and operational efficiency?
- Intent to Stay – Do employees want to be a part of the organization?
Companies with higher levels of employee engagement report 18% greater productivity, 12% higher customer satisfaction and 51% less voluntary turnover. Companies with lower levels of employee engagement report 12% lower profits, 19% lower operating income and 28% lower earnings per share. So not matter which way you cut it, employee engagement matters.
When we run our Best Places to Work Employee Engagement Surveys, companies receive an overall employee engagement score. This single rating provides a nice and simple metric for the general state of employee engagement at an organization. But that’s really all it does – give an overall temperature check. It’s not until you start segmenting survey results by favorability, uncertainty, un-favorability and demographics (e.g. location, manager, department, position level, gender and tenure) that you find truly insightful and actionable data into what actions can measurably increase employee engagement for your unique strategy and culture. When further analyzing engagement by how long an employee had worked at an organization, we uncovered a very interesting trend – coined the “tenure curve.”
What is the Tenure Curve?
The tenure curve is an employee engagement trend seen in many organizations. We find U-shaped curves (similar to the one below) across all organizations, demonstrating how employee engagement changes over their time with an organization.
We can see that employee engagement is highest for the newest employees, takes a nosedive for the next group, decreases and levels off for the following three groups, and finally increases for the “old timers.” *
* Research Method
Data presented in the above graph are comprised of 54 randomly selected organizations that have taken our engagement survey. Some organizations use varying cutoffs for tenure (e.g., 1-3 years, 5-10), so only organizations that used our standard tenure cutoffs were considered for inclusion. Additionally, weighted averages were calculated for each tenure group to accommodate for size differences across organizations.
Breaking It Down
To better understand the implications of the tenure curve on employee engagement, let’s take a look at each group.
< 1 Year
As we’ve all experienced, new hires typically go through a lot of development and adjustment in a relatively short period of time. New hires have to acclimate to a new culture, quickly learn organizational procedures, adapt to specific technologies, and know who to contact for information, all while navigating personal and professional relationships with their immediate coworkers, managers, and other employees across the organization. Despite being bombarded by new expectations, rules, and relationships, new hire engagement is comparatively often off the charts. These higher levels of engagement are likely related to the novelty and optimism associated with a new workplace. The new hires are going through the honeymoon phase; they focus on limitless possibilities, receive tons of attention, and learn a lot about their new relationships.
At one-to-two years on the job, the shine on the relationship starts to dim, and imperfections are more frequently and readily noticed. That starry-eyed optimism turns to realism — dare we say, cynicism? — as employees gradually see fewer learning possibilities, plateau in their development, become more involved in office politics, and receive less attention. We’re reminded of two theories that can adequately explain the large drop in favorable perceptions.
Breach of Psychological Contract. When one party (e.g., the employee) believes another party (the organization) isn’t holding up its end of the bargain, there is a violation of trust and expectation. In the case of plummeting engagement, employees in the 1-2 year bracket likely believe that they should continue to receive the learning opportunities and attention they enjoyed during their first year. When that “contract” is broken, employees feel a bit abandoned. They begin to wonder if their jobs are really all that great or if the organization really cares.
The Gartner Hype Cycle. This cycle was originally designed to explain and forecast the adoption and maturity of technologies, but we believe it’s quite relevant to newer employees. Specifically, the hype cycle suggests that new technologies go through four distinct phases. First, a technology reaches a “peak of inflated expectations” in which the technology is held to unrealistic or unattainable standards. Second, after failing to fulfill those expectations, perceptions of that technology quickly drop into a “trough of disillusionment.” Slowly yet surely, the technology increases through a “slope of enlightenment” and reaches a “plateau of productivity” in which its applications are more grounded, realistic, and optimized. With regard to the drop in engagement for newer employees to those with slightly more tenure, there are strong parallels with the drop from the peak of inflated expectations (e.g., new relationship energy) to the trough of disillusionment (e.g., breach of psychological contract).
The next three groups are interesting because, at an aggregate level, they’re indistinguishable from one another (all three are within one-tenth of a percentage point in the above graph). Although there are some rather nuanced differences across such a huge swath of employees, anecdotally we’ve found that these individuals have something in common: they’re hitting a ceiling. This ceiling often relates to some sort of advancement, whether it be career development via promotions and increased responsibility or professional growth via acquiring new skills and knowledge.
Employees in this stage aren’t just employees at the organization; they are the organization. This isn’t egotistical or narcissistic, but rather a natural result of having stayed with an organization through ups and downs, changes in personnel and strategies, and redefinitions of competitive landscapes. Employees with this much tenure are more likely to hold higher positions of formal or informal influence within the organization, which further strengthens their desire to support, protect, and guide the organization.
The Tenure Curve and Employee Engagement Surveys
One of our colleagues connected the dots between this tenure curve research and recent research indicating that conducting an annual engagement survey is better than less-frequent surveying: For your employees with 1-2 years of tenure, engagement will fall even more quickly without an annual engagement survey to monitor their perceptions. If an engagement survey is conducted on a less-frequent timeline, then employees who start at your organization shortly after an engagement survey is administered won’t be able to take part in an organizational conversation (an engagement survey) for 18-24 months. This means that you will skip an entire “generation” (< 1 year) of employee opinions, and may even skip two generations (< 1 year and 1-2 years)! Likewise, without renewing the conversation with a data refresh, you could be shaping new hire/onboarding strategies based on data that are 18-24 months old. This all adds further evidence that surveying on an annual cycle is paramount for a successful engagement strategy.
Key Takeaway: Keep the (Engagement) Momentum Going
For the success of your organization, it is crucial to maintain the high level of engagement that comes with a new hire. But as shown in the above graph, most organizations don’t try to keep that momentum going. Now that you know about the trend of engagement dropping sharply, you can develop strategies to try and counteract it. Adopt these strategies, and be sure to apply them across all tenure groups:
- Hold more frequent (monthly or quarterly) and higher-quality performance conversations between managers and direct reports
- Offer more varied and in-depth learning and development opportunities
- Ensure that all employees are well-informed about the organization’s future and how they individually fit within that future
To learn more about increasing employee engagement, download The Top 10 Most Powerful Ways to Boost Employee Engagement.