A common concern across all industries is employee retention. Though various factors may contribute to turnover among personnel, recent research may shed new light on practical means of improving retention and reducing the costs associated with excessive employee turnover.
Human resources professionals can gain a wealth of insight into best retention practices by learning about job embeddedness and its implications. A more nuanced approach to employee retention than traditional metrics such as employee job satisfaction, job embeddedness theory offers a multi-faceted means of identifying and addressing challenges that could potentially lead to unwanted turnover within their organization.
What is job embeddedness?
The theory of job embeddedness was developed over more than a decade of research conducted by Georgetown University’s Brooks C. Holtom and his colleagues. Their research (“Increasing human and social capital by applying job embeddedness theory,” published in Organizational Dynamics in 2006) of various elements leading to employee retention or turnover incorporates a range of concepts and potential applications that HR departments may consider useful.
Holtom posits that employees can be viewed as individuals with a series of connections among different aspects of their lives. Those whose lives integrate more roles, responsibilities, and relationships have more connections and thus can be described as more embedded. Specifically, individuals who are involved in a wider range of work-related roles, responsibilities, and relationships are more “job embedded.”
When viewing individuals’ job embeddedness as a series of connections, it becomes apparent that those with more connection points may experience more intense disruption across more aspects of their life and career if they remove themselves from the central point of connection — their work. Those with high job embeddedness may avoid leaving their job due to the higher number of factors that will be affected by this disruption.
Conversely, individuals who do not possess many roles, responsibilities, or relationships in the workplace are considered to have low job embeddedness. According to the research, these individuals may have fewer connections among various aspects of their lives and face less disruption if they decide to leave their organization. This may decrease HR’s ability to retain these employees.
Core elements of job embeddedness
Job embeddedness theory identifies three critical elements that indicate the level of connection that individuals may develop within their organization. These can be broadly defined as:
- Fit — How an individual’s work relates to their values and goals
- Links — How an individual is connected to other people and activities
- Sacrifice — The level of disruption an individual would experience if they were to quit their job
By understanding these key factors in job embeddedness, we can assess to what extent employees are risk of leaving an organization and how best to promote retention where desirable.
Holtom and his colleagues define an employee’s fit as “perceived compatibility or comfort with an organization and [their] environment.” As a fairly subjective metric, human resources can assess fit by seeking to understand individual career goals, talents, and knowledge to determine how well they may fit into organization and its community.
When an individual has high job embeddedness in terms of fit, they will likely feel a stronger tie to the organization itself. For human resources departments seeking to improve employee fit, training events and group learning sessions may allow them to develop compatibility and comfort with an organization, improving job embeddedness.
Links are defined as connections between an individual and their organization and community. These connections may be formal, such as that between management and employees, or informal, such as co-worker interactions and friendships. Groups within the organization and physical work environments may also be considered links that factor into an individual’s job embeddedness.
Increased links between an employee and their organization can result in improved job embeddedness. Human resources may develop links through a variety of means such as encouraging positive interaction between management and employees, providing opportunities to develop cohesion in various groups, and even implementing changes to an organization’s physical work environment that allow for increased connections between employees.
Job embeddedness theory defines sacrifice as “the perceived cost of material or psychological benefits that are forfeited by organizational departure.” Aside from the most obvious benefits of employment such as income and insurance, a variety of secondary incentives may be withdrawn or concluded if an individual leaves their job. These may include formal benefits such as pension plans, stock options, or opportunities for future career advancement. They may also include informal benefits such as co-worker friendships, personally significant tasks or projects, or even the reputation of holding a certain position.
The level of sacrifice that an individual may endure if leaving their job can have strong effects on job embeddedness. Employers who wish to decrease turnover may consider increasing the perception of value in organizational benefits, both formal and informal in nature. Developing individual satisfaction in perceived value will by default increase employees’ reluctance to sacrifice benefits associated with their work and organizational community.
How to use job embeddedness theory to increase employee commitment
Although organizations vary widely across assorted industries, there are many ways that HR departments can seek to improve job embeddedness and reduce turnover. First, common factors contributing to employee turnover must be understood. Next, consideration should be given to predictors of employee retention and how an organization might leverage this information to achieve their goals.
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3 Strategies for Building a Successful Company Culture
According to a study conducted by Glassdoor.com, there are several metrics that tend to predict individuals leaving their employer. These include:
- Changing roles: 73% of employees who change roles within their organization eventually quit.
- Age: 69% of 18-24 year-olds and 32% of 40-48 year-olds quit within one year in an organization.
- Sector: Certain industries lend themselves to high turnover rates, whereas others tend to retain employees much longer. Organizations in government, air and space, media, IT, and non-profit sectors tend to have more difficulty reducing turnover.
- Pay: 63% of employees who quit their job earn an average of 5.2% more income from their next employer.
- Culture: Turnover rates tend to be higher at organizations where there is a widespread negative perception of organizational culture or where no identifiable culture exists.
Several strategies related to job embeddedness can help organizations achieve higher employee retention rates. For example, Glassdoor.com lists the following as main factors in employee retention:
- Culture: Employees who identify with organization culture and values are 5% less likely to quit.
- Outlook: Employees who believe their career advancement opportunities within an organization have a positive outlook are 5% less likely to quit.
- Income: Those who earn 10% higher than the average pay for their position are 1.5% less likely to quit.
- Promotion: Companies who fail to provide clear paths towards career advancement and promotion opportunities may reduce employee retention by 1%.
The downsides of job embeddedness and how to overcome them
Although job embeddedness theory shows promise for numerous applications within HR and organizational strategy, there are some potential negative aspects to consider.
Since job embeddedness emphasizes employee retention, there may be instances in which individuals feel bound to their position and associated responsibilities. In some cases, employee turnover may be preferable to retaining individuals who do not wish to be employed at an organization or who do not find themselves to be a good match for organizational values.
HR’s efforts to increase fit, links, and perception of sacrifice for improved job embeddedness may prove counterproductive in situations where certain employees are no longer an ideal fit for their position. If an individual is exposed to initiatives that run counter to their intentions, i.e. if they feel they are being pressured to stay in a job that is no longer desirable to them, they may react with resentment or act in counterproductive ways as a means of bypassing the organizational emphasis on job embeddedness.
To prevent excessive application of job embeddedness theory, organizations should define specific success metrics, as well as any potential situations in which embeddedness is not desirable. Efforts to improve job embeddedness should be balanced with consideration of overall organizational goals and capabilities. Just as employee turnover can negatively impact an organization’s profit and stability, so can excessive pandering or accommodation of employees affect the organization’s ROI.
Correlations between training and business success
Holtom and his colleagues concluded their research with the assertion that companies and organizations must invest in strategies that effectively increase job embeddedness long term. They recommend that organizations assess the specific needs and desires of their employees and find ways to address these in accordance with cost-effective programs, initiatives, and training that will lend itself to increase job embeddedness.
Additionally, training within HR itself can increase the department’s awareness of and capacity for job embeddedness strategies. This may better equip them to work towards positive employee retention trends in keeping with organizational goals and needs.
Clearly, job embeddedness theory offers many practical applications to HR departments and organizations seeing to improve employee retention and reduce the risk of excessive turnover. Balance should be maintained between job embeddedness initiatives and overall ROI. However, research seems to indicate a positive outlook for those organizations that embrace the metrics of Fit, Links, and Sacrifice to identify areas where individuals may benefit from activities or initiatives geared towards job embeddedness.