The intranet as an employee retention tool

by Toby Ward — The intranet is a key driver of employee retention. Studies show that employees who were highly satisfied with their intranet or corporate portal also had a high level of job satisfaction. When employees are satisfied, they stay on longer, their productivity rises and training costs fall.
It’s a buyer’s market. There is a shortage of skilled workers and we all know it. In fact, while the shortage is estimated at a couple of million workers in the U.S. alone, the shortage is increasing rapidly and expected to grow to 14 million by 2020.

Is it any wonder why so many HR professionals are completely and totally obsessed about employee retention? Retention has become such a hot issue for executives that even The Economist dedicated an issue (October 2006) to “The search for talent: Why it’s getting harder to find.”

Despite the need and focus on employee retention Spherion Corporation’s IT Employee Confidence Index dropped 4.3 points to 54.1 in the third quarter, according to the latest IT Employment Report (conducted by Harris Interactive). However, some 73% of IT workers say they feel it is not likely to lose their job. So job confidence is not a factor in affecting their job confidence and satisfaction.

“On the surface, this quarter’s data may seem contradictory, but the tech sector itself is operating counter-intuitively,” said Brendan Courtney, senior vice president of Spherion® Professional Services. “IT workers are still being enticed to stay with their current employers through a series of retention efforts which may explain why even more of them are confident in their own job security.”

So employees are not worried about their jobs, but their confidence and job satisfaction is declining – and the market is screaming for skilled workers with a massive shortage that is dramatically on the rise.
What’s the problem? Why aren’t more companies doing more to retain workers? The answer may lie in the results of a Career Systems International study on employee retention. Employee priorities are “exciting work and challenge” and “career growth and learning.”

Top Drivers of Retention

 1. Exciting work & challenge 48.4%
 2. Career Growth, Learning & Development 42.6%
 3. Working with great people & relationships 41.8%
 4.  Fair pay 31.8%
It is clear that the intranet is a primary driver and enabler for fulfilling the top two drivers for white collar workers – exciting work & challenge, and career growth & learning. The intranet is an incredible learning tool, and there’s no question that if executed properly, that leading edge technology can bolster employee satisfaction.

“There's no disputing the value of effective internal communications in any small or medium-sized business. Employees who are better informed are more satisfied, feel more involved in the fate of your company and ultimately contribute more to your success,” states the Business Development Bank of Canada (BDC) (see Creating effective internal communications). “Companies that make internal communications a priority are more likely to reach their objectives with motivated employees. In turn, you can resolve conflicts quickly and improve employee productivity.

BDC’s top two recommendations for improving employee communications: a company newsletter (paper or electronic), and the intranet. The intranet allows employees to be better connected to the company and each other by improving communications, enhancing collaboration, and increasing individual productivity. Employee spend less time searching for information to do their jobs, and complete tasks faster.

IBM knows all too well the value of the intranet on employee retention. At IBM, the human resource services via the intranet (loosely called e-HR) is saving the company more than $500 million a year - $284 million in e-learning alone. But the benefits are far higher than just mere dollars. Since improving the intranet and adding e-HR services, employee satisfaction with human resources has risen from 40% to 90%. The financial impact of such an increase must be immeasurable.

As for the intranet as a whole, IBM has some other very important non-financial metrics:

  • Usage and value: 80% of IBM employees access the intranet daily
  • Workforce enablement: 68% view the intranet as crucial to their jobs
  • Employee retention: 52% are more satisfied to be an IBM employee because of information obtained on w3

(source: Liam Cleaver, IBM, From Intranet to the On Demand Workplace)

When employees are satisfied, they stay on longer, their productivity rises and training costs fall. The combination of a higher employee job satisfaction rating, along with improved knowledge and experience, leads to better customer service.

Studies show that employees who were highly satisfied with their intranet or corporate portal also had a high level of job satisfaction. Conversely, those who were very dissatisfied with their intranet or corporate portals were much more likely to be dissatisfied with their jobs. Other research has shown that effective internal communications – often the responsibility of HR – is a driver of job satisfaction. Since the portal functions as an online communications tool, it naturally flows that a significant correlation between the effective portal and higher job satisfaction would exist.

If employee retention is a top priority for most organizations, the increased investment in the intranet is a must. Those organizations that continue to treat the intranet as a cost center rather than an investment in the future will be losers in the race to retain talent.

Toby Ward is the President and Founder of Prescient Digital Media with 15 years of progressive professional experience & business consulting expertise. Contact us directly for more information on how to transform your intranet into a high-value employee & business system.