Let this be a wake-up call for business leaders: The employees with the longest tenures in your company are also the least likely to be engaged.
Somewhere along the way, most workers lose some of their motivation to make a difference and create value for their employers. Many grow apathetic over time and spend each day doing the minimum to get by. Some nurse grudges for years and even undermine the company when they get the chance.
It might be tempting to say this is their problem, but in fact it’s yours. In today’s knowledge-based economy, companies and products are intricately specialized and experience counts for a lot. Retaining long-tenured, highly capable employees might be challenging, but minimizing their turnover is more practical than churning through new hires who, even after costly training, might or might not turn out to be a fit for the complex requirements of a role.
More positively, the typical inverse relationship between tenure and engagement points to an important untapped opportunity for most organizations: the dramatic performance gains that can be made by thwarting it, and keeping long-tenured employees engaged.
Gallup’s data suggest that the highest performing individuals in companies have three things going for them: (1) they have tenures of a decade or more in their organizations; (2) they are engaged in their work; and (3) they are in roles where the expectations of the job align well their natural talents. Each variable affects outcomes on its own, but the highest performance comes from the combination.
But here’s the unfortunate fact: in the typical company among the hundreds we’ve studied, this combination exists in just 5% of individual contributors.
Tenure matters not only because years of work in a given profession yield deep specialist knowledge. Those years also cultivate a nuanced understanding of how a company operates and how to maneuver through organizational channels and get things done with a minimum of friction. Through countless hours of collaboration with the same coworkers and teams, veteran employees gain tacit knowledge that allows them to predict how colleagues will behave and anticipate how they will respond to everyday situations. This sort of in-depth knowledge is immensely useful to employers, but prospective employees can’t obtain it in business school or replicate it by working in a similar company or role.
Indeed, numerous academic studies have found that individuals with longer organizational tenures tend to achieve higher levels of performance. Their improvement trajectory, likely a mix of their growing capabilities and the growing importance of the jobs they hold, might become less steep over time, yet it continues upward year after year. Experience is such a strong driver of performance that it allows long-tenured employees to outperform the average even despite being less engaged than their colleagues. Still, to count on tenure alone to deliver competitive levels of performance would be folly.
Engagement also makes a big difference. Gallup gathered the evidence that this is true in the course of working with hundreds of organizations trying to increase their employees’ engagement. The effect is pronounced even in employees of under two year’s tenure – perhaps because greater engagement makes them more likely to interpret and use their early experiences productively. The effect of engagement on performance continues throughout the employee life cycle to employees of long-term tenures (10 years or more).
What kind of managerial interventions can increase engagement? Here’s a strong hint. Our past research shows clearly that employees have the best chance of being engaged (and staying with their companies) when they also report that their managers understand them and give them the chance to do what they do best every day. Managers can help employees find ways to do more of what they’re good at.
This brings us to the question of natural talents, and the importance of matching people well with roles. Success starts with hiring employees with the right talents for jobs in the first place – or failing that, being quick to reposition them in jobs that fit them better. Perhaps not surprisingly, people’s natural talents matter a great deal to how well they do their jobs. This shows up in hard data: of tenure, engagement and talent, Gallup finds the latter to be the strongest predictor of performance.
To put a finer point on that, our analysis shows that talented employees with longer tenures in their jobs can achieve above-average performance even in work environments that are not very engaging. Alternatively, talented and engaged employees can achieve above-average performance even with less than two years of tenure. The effect of talent is only minimized to below-average performance when a talented person has less than ten years of tenure and is actively disengaged at work.
To understand the combined effect of tenure, engagement and talent on performance, my colleagues and I launched a large-scale study. This study included recent data from 20 studies across seven organizations and more than 7,000 individual contributors in various roles, including customer service, call centers, financial consultants, sales representatives, nurses, support staff and clinical staff.
Our finding that just 5% of employees are in the proverbial “sweet spot” — engaged at work, in roles that are the right fit for them and at their company for 10 years or more —likely indicates that few organizations are examining their workforce to understand where their people fit in this configuration. Yet our results suggest there’s much they can gain by doing so.
Employees who hit the trifecta of tenure, engagement, and talent perform 18% higher than the average employee and 35% higher than a worker who goes zero for three. For skilled, production, and support staff, this equates to a financial impact of $6 million and $12 million, respectively, per 1,000 employees. For highly educated professionals, the economic impact essentially doubles from $12 to $23 million per 1,000 workers.
In many companies, it may seem unrealistic to have a surplus of workers with ten or more years of tenure. Even among workers who have less tenure and are engaged and highly talented for their role, their performance is 9 percent better than average and 24 percent higher than someone with low talent who is actively disengaged.
The most important thing that companies must do to get the most from their workforce is to align their talent, engagement and tenure strategies. Using scientific predictive analytics to hire people with the right talents for their role gives them a better shot at becoming engaged because they have more opportunity to do what they do best. And pairing talented employees with great managers helps to boost and sustain engagement, increasing the likelihood of retention. This leads to a longer, more meaningful tenure for employees and, ultimately, a more productive and valuable workforce poised to support high organizational performance. The three parts of the configuration inherently support one another. Organizations need to combine them in a more strategic way.
Jim Harter, Ph.D., is Chief Scientist of Workplace Management and Well-Being for Gallup’s workplace management practice. He is coauthor of the New York Times bestseller 12: The Elements of Great Managing, an exploration of the 12 crucial elements for creating and harnessing employee engagement. His latest book, Wellbeing: The Five Essential Elements, is based on a global study of what differentiates people who are thriving from those who are not.