Satisfied Workers Stay: The Benefits of Employee Satisfaction on Retention in Europe


November 8, 2022

Key Findings

  • Less satisfied workers are more likely to apply for work elsewhere. Employees in the UK, France and Germany who rate their companies only two stars (on a five-star scale) on Glassdoor are nearly twice as likely to begin applications to other companies than those giving the full five stars.
  • This trend holds true across nearly all workplace factors in the UK, France and Germany. Five-star ratings resulted in low application rates across most workplace factors in all three countries. On the opposite end of the spectrum, negative work-life balance in France, low compensation in Germany, and poor culture and values in the UK resulted in the highest application rates in each country.
  • Even after controlling for other factors, a one-star increase in an employee’s overall Glassdoor rating is associated with a substantial decline in the likelihood they apply for a new job. In the UK, France and Germany, this equates to a 19.1, 24.9 and 14.8 percent drop respectively in new job applications within a week of leaving a review.

With the labour market still tight despite cooling off in recent months, retention and attrition remain top priorities for employers. While it’s no surprise that lower satisfaction in an organisation can lead to higher attrition, Glassdoor’s Economic Research team in August found that higher employee satisfaction in the U.S. was linked to a lower probability of applying for a new job. 

Our analysis went further than most by confirming that this link can be seen at an individual level in addition to an institutional one. In other words, satisfaction in their current role is central to individual employees’ job search decisions.

We then examined turnover rates for employees in the UK, France and Germany using the likelihood of beginning a new job application within a week of leaving a review on Glassdoor. In the UK and France, employees rating their employers only two stars (out of five) were the most likely to apply to new jobs, with 5.4 and 4.5 percent of employees, respectively, applying within a week of leaving a review. In Germany, one-star raters had the highest application rates, with application rates decreasing consistently as ratings increase. 

In all three countries, the most satisfied workers, not surprisingly, were the least likely to apply somewhere new, with 2.9 percent of UK, 2.2 percent of French and 2.5 percent of German employees doing so within a week of leaving a review. Application rates within four weeks of leaving a review showed the same pattern, with those workers leaving two-star ratings in the UK and France and one-star ratings in Germany the most likely to apply elsewhere. 

Application Rates by Workplace Factor

We then examined the six workplace factor ratings that employees can choose to review on Glassdoor: Career Opportunities, Compensation & Benefits, Senior Leadership, Work-Life Balance, Culture & Values, and Diversity & Inclusion. Across each of the ratings, results were broadly similar. This suggests that dissatisfaction, regardless of the specific factor driving it,  may lead to employees turning elsewhere. 

In the UK, every workplace rating reflected the same pattern as Overall Ratings, with two-star ratings seeing the highest application rates and five-star ratings the lowest. Culture and Values sub-ratings of two stars saw the highest application rates overall, perhaps reflecting its role as the most important factor in overall workplace satisfaction

French employees showed broadly similar results, although unlike British or German reviewers, one-star work-life balance ratings resulted in the highest application rates, perhaps arising from the greater importance French employees give to life outside the office. 

Similarly, German application rates by workplace factor generally declined as ratings increased. However, unlike the other countries, poor compensation was the biggest “push factor” for German employees, possibly a reflection of the higher wages generally offered there.

The Impact of Low Workplace Factor Ratings on Applications

Although employees with lower workplace satisfaction are more likely to apply for new jobs, this could also be the result of other factors such as in which industry the employee works. For instance, the economy-wide trend we see may be because workers in some industries, like healthcare or food service, have lower overall workplace satisfaction in addition to higher turnover rates independent of individual satisfaction rates.

To isolate the impact of satisfaction on application decisions, we ran several logit regressions controlling for other factors such as salary, super-sector (a broad grouping of similar industries), past application behaviour, and years of experience. 

The results were broadly similar across regressions: higher workplace ratings led to a significant decline in application rates. Including all the control variables, a one-star increase in workplace satisfaction led to a 19.1, 24.9 and 14.8 percent average drop in applications in the UK, France and Germany respectively.

Conclusion

With many companies still reeling from the aftershocks of the Great Resignation, employers know the importance of retention and minimising attrition. Our results suggest that fostering higher workplace satisfaction is an effective way of reducing turnover in the UK, France and Germany, just as in the US .

Methodology

In this research, we linked the job search activity and workplace reviews of Glassdoor users. Application rate denotes the share of full- and part-time employees who left reviews and then clicked ‘apply’ on a job on Glassdoor’s platform within a week of leaving their review. Unless otherwise specified, ratings refer to the overall rating (on a 1-5 scale) that all employees must leave when reviewing their workplace. 

The regression analysis is performed with a logit regression, where the dependent variable is a binary variable denoting whether an employee has applied to a job within a week of leaving a review. We controlled for past job application behaviour with a binary variable denoting whether an employee applied to a job within a week prior to leaving the review. We also included the natural log of salary, years of experience, years of experience squared, and a variable indicating which super-sector (a broader grouping of industries) the employee worked in.

Industries were grouped into super-sectors as follows:

  1. Information Technology, Finance, Media, Biotech & Pharma, Accounting & Legal 
  2. Education, Government, and Nonprofit
  3. Healthcare
  4. All Other Industries

For the regression, one-star ratings were excluded, focusing instead on two to five star reviews where the linear relationship was the strongest.

To speak with Lauren Thomas about this report, please contact pr@glassdoor.com. For the latest economics and labor market updates follow @LaurenTEcon on Twitter, connect on LinkedIn, and subscribe to Glassdoor Economic Research.