With an increasing number of people voluntarily resigning from their jobs, retention is top of mind for most organizations. Between the Great Resignation and “quiet quitting” trends, employers are left scrambling to keep their employees motivated and engaged. One of the key factors to look at is the role of motivation in employee retention. Motivated employees are likelier to report feeling engaged in their work, are less likely to leave their job, and are more productive. In this article, we’ll explore how motivation affects retention rates, as well as actionable tips on how you can keep your employees more motivated.  

Understanding Motivation

Motivation is the driving force behind a person’s behavior. It influences their willingness to put in the effort and dedication required to achieve desired goals. In the workplace, motivated employees exhibit higher job satisfaction, engagement, and productivity levels. There are 23 motivators we found to be driving factors for all people in varying degrees. These range from prestige to social responsibility to excitement. The way these rank for each individual is unique. In fact, the odds of two people on your team with the same top seven motivators is a million to one. 

You can’t start motivating your employees without knowing what drives them. A fun outing for employees at the bottom of their motivators won’t be as effective as aligning with their top motivators. Have your employees identify their top motivators through the Motivators Assessment

Hidden Costs of Low Retention Rates

Keeping the best of the best should be one of the highest priorities for any organization. This can be more of an issue for small businesses or nonprofit organizations. The good news is it isn’t just about offering the highest salary, although that certainly won’t hurt. People don’t just leave their jobs to make more money. Some common reasons of employee turnover are lack of career development, poor company culture, and feeling like their thoughts or opinions aren’t considered. There is more to low retention rates than one might think. A few other negative impacts of retention issues include:

Organizational Costs

One of the biggest concerns for a company with low retention rates is the financial aspect. Hiring a salaried employee costs about six to nine months of their salary. To calculate the cost, combine recruitment costs, onboarding, lost productivity, and training, among other factors. If a position pays $60,000 annually, replacing them would cost between $30,000 to $45,000. However, this can go up or down, depending on the position. Hiring a C-suite executive can cost as much as 213% of their salary. An hourly employee costs around $1,500. This is a considerable expenditure, especially for a small business. 

Lower Morale

When an employee leaves their job, the remaining employees often feel like they lost a valued friend. Based on a 2017 survey, 70% of employees felt that having a friend at work was vital to their happiness. In the same study, 58% of men and 74% of women said they’d refuse a higher-paying job if it meant not getting along with their co-workers. When people leave a company, everyone left behind is impacted. This also opens the door for employees to ask questions about why their friend left and leave them wondering if they should do the same. 

Decreased Productivity

When people regularly leave the company for other opportunities, the remaining employees have to pick up the slack. Suddenly, an employee is doing two jobs for the price of one while the organization goes through the process of filling the role. Then someone has to train the new person to do the job, which takes away time they normally spend on work tasks. This can lead to overworked employees and burnout. As these people work double time trying to fill, their stress levels will rise. This will inevitably lead to them not performing their best and a marked decrease in work quality. Overworking the remaining employees could cause them to get fed up and quit. 

Role of Motivation in Employee Retention

So what is the role of motivation in employee retention? A recent study found that motivated employees are less likely to resign. They are also more likely to report higher job satisfaction and engagement in their work. Motivated employees are more productive, perform at a higher level, and contribute to an incredible work culture in which people want to participate. Little one-off bonuses aren’t enough to keep employees around. You need a long-term retention strategy. This should aim to develop a meaningful relationship between the organization and your employees and make it a great place to work. Motivation is the key. Some of the benefits you can expect from a motivated workforce include:

Job Satisfaction

Motivated employees are more likely to be enthusiastic and passionate about their work. They tend to feel a sense of purpose and fulfillment, which makes them less likely to look elsewhere for job opportunities. If someone is happy with their job, why would they leave? Fostering a motivational environment can increase job satisfaction, improving retention rates. 

Employee Engagement

When employees are highly motivated, they are more engaged in their roles. This leads to an increase in productivity and overall organizational success. Engaged employees are emotionally invested in their work and take pride in doing it well. They are committed to the organization’s goals and actively contribute to them. When employees are motivated, they are more likely to go above and beyond their assigned tasks without experiencing burnout. 

Performance and Productivity

Motivated employees are better performers than unmotivated ones. They’re more focused on their work and more likely to find ways to improve workflows. Motivation fuels a strong work ethic, increasing employees’ desire to improve. They are more likely to seek ways to grow and develop their skills. They also tend to complete projects faster and more efficiently. 


Studies have found that their performance is likely to improve when an employee sits next to a high-performing colleague. Having motivated employees will have a positive impact on the entire workforce. When someone sees their co-worker excelling and doing excellent work, they’re likelier to try harder and feel more motivated to excel. Starting with employee motivation can cause a positive domino effect to occur. This positive impact will reverberate throughout the organization, driving better performance and happier employees. Customers will also reap the benefits as their concerns or issues will be addressed by people committed to keeping them around. 

Improving Employee Motivation

The first step in improving employee motivation is finding out what motivates them. Don’t just assume everyone is only motivated by gift cards and an occasional free lunch. After you’ve identified those motivators, it’s time to start getting creative. Some relatively minor shifts can make a big difference here. Find ways to job sculpt so people do a little less of the frustrating tasks. Offer a flexible work schedule with the option to work from home to be more accommodating to caregivers and parents. Help employees feel appreciated by celebrating their life events and work achievements. Small (and cheap or free) efforts can reap great rewards. Give frequent feedback and truly listen to your employees when they express concerns or ideas. Doing these things will help your employees feel appreciated and seen in the workplace.  

Another way to motivate your workforce is by being as transparent as possible. This is particularly effective with Gen-Z employees but will undoubtedly be appreciated by most (if not all) employees. Clearly explain the mission of the organization and repeat it often. Explain the reasoning behind certain business decisions, and share growth targets or commission rates. Share the team’s strategy and the challenges you’re facing in management. Sharing this type of information and reasoning helps employees know they are valued. It helps them know they are an integral part of the organization and gives them a sense of ownership over the company’s successes and failures. 

The role of motivation in employee retention cannot be overstated. By nurturing a motivated workforce, organizations can improve job satisfaction, increase employee engagement, and reduce turnover rates. Avoiding low retention rates can help companies save a substantial amount of money, improve employee morale, and limit the risk of burnout by other employees. Keeping your employees motivated means keeping them around for a long time. Take the time to understand your employee’s motivators and find ways to align work tasks with them. Find motivators the team shares in their top ten and find ways to motivate them as a group. Prioritizing employee motivation benefits the individual employee and contributes to the organization’s overall success and competitiveness.

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