Employee Engagement Leads to Retention: Building It Into Your Operating Plan
People are humans, not cogs in a machine.
What matters most to employees is their team and how much their direct leader cares for them as individuals. Leadership through love isn’t soft . . . it’s strategic. Ask yourself: How would you want your daughter to be treated at work?
The key is to know who your top performers and core contributors are, then engage them in ways that make them want to stay. These employees consistently deliver high productivity, innovation, and customer satisfaction. By involving them in problem-solving, seeking their ideas, and valuing their insights, you strengthen retention and uncover valuable RIOs (Risks, Issues, Opportunities) that can drive improvement across the business.
Why Engagement Matters More Than Strategy
Some leaders say “strategy eats culture for breakfast.” I disagree. Culture eats strategy for breakfast. Strategy is critical for leadership, but for employees, culture is the glue. It’s what keeps them engaged, committed, and willing to give their best.
In Band of Brothers, the men of the 101st Airborne, 506th PIR didn’t fight for General Omar Bradley or an abstract army group - they fought for the person in the trench next to them. 1st Sgt. Carwood Lipton earned their trust by caring for them and holding them together under fire, earning praise from Maj. Dick Winters. In the workplace, people fight for their team - and especially for their direct leader (presuming their leader trusts and fights for them!)
When creating your annual operating plan, start with your North Star - where the company is headed, and then build engagement intentionally into your plan. Setting direction is leadership’s job—but building engagement is done at the team level.
Here are three practical ways to embed engagement into your operating plan:
1. Structure Meetings to Build Connection
Regular (biweekly or monthly) 1-on-1s with a simple structure create engagement naturally:
In the business – Discuss current work, challenges, and resources needed.
On the business – Ask the “magic wand” question: If you could change anything in your area, or anywhere in the company, what would it be? High performers will often surface bottlenecks, cost-saving ideas, and innovation opportunities.
About the individual – Talk about career goals, training needs, and their development path.
Tell me something good – Invite them to recognize others’ achievements. This builds positivity and uncovers unsung contributors.
2. Empower Problem-Solvers
In Turn the Ship Around, author Captain David Marquet refused to make every decision himself. He empowered his crew to bring solutions, not problems, cultivating ownership, trust, and continuous improvement. Similarly, decentralizing decision-making nurtures innovation and engagement.
3. Use SOPs as Engagement Tools
Documenting standard operating procedures (SOPs) isn’t merely about consistency—it’s a way to involve employees in shaping the how. Having team members document their own processes signals trust, engages critical thinking, and invites creative improvement.
If you hold skip-level meetings (meeting with employees two or more levels down), make them trust-building, not intimidating. These should be safe spaces focused on connection and curiosity—not performance evaluation, which remains the manager's role.
The Data: Engagement Drives Retention
Here’s what the data shows:
Highly engaged teams experience 43% lower turnover in low-turnover organizations and 18% lower turnover in high-turnover ones.The Manufacturing Institutegetfrankli.comSimbo AI+3Gallup.com+3getfrankli.com+3
In manufacturing settings, 84% of employees report positive relationships with supervisors and coworkers, reinforcing engagement, satisfaction, and retention.The Manufacturing Institute
Employees with positive manager relationships are much more likely to stay: 74% would stay even if they didn’t need the money, compared to just 37% with neutral relationships.nectarhr.com+1
Companies with strong cultures (high engagement) have turnover rates of only ~14%, compared to ~48% for those with low engagement.en.wikipedia.org
The Bottom Line
Team leaders hold the most critical position in any organization. They shape daily engagement, trust, and innovation. Positive engagement at this level boosts retention, builds culture, and unlocks performance.
When crafting your operating plan, include specific, measurable engagement goals alongside financial and strategic objectives.
Make engagement intentional. Track it. Hold leaders accountable.
Because in the end, people stay not for the quarterly targets—they stay for a leader who cares and a team they believe in.
Ready to keep your best people?
At On the Floor Consulting, we help leaders bake engagement into their operating plans so retention and performance go hand in hand.
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