What if the most powerful metric that your leadership is working is a shrinking exit list? In the current labor market, employee engagement isn’t a “nice to have.” It’s a hedge against turnover, and arguably the clearest way to measure return on investment (ROI) in your people strategy.
Why Retention and Reduced Turnover Should Be Your North Star
Across industries, the data is sobering. Only about 31% of U.S. employees are engaged right now. That figure from Gallup’s mid-2025 update mirrors the lowest levels seen in a decade. Globally, the situation is even grimmer, with roughly 21% of employees worldwide feeling engaged in their work.
This matters because low engagement isn’t just a morale problem. It’s a business-performance problem. Research shows that teams with strong engagement are up to 18% more productive and 23% more profitable than their disengaged counterparts. Conversely, disengaged or poorly supported teams have turnover rates 18% to 43% higher than highly engaged teams.
Consider what this means for your company. Every percent decrease in turnover isn’t just fewer exit interviews; it’s potentially hundreds of thousands of dollars saved in recruiting, onboarding, training, and lost productivity. In other words: retention is profitable.
“Job Hugging” Why Low Turnover Isn’t Always a Win
There is, however, one potential catch. A shrinking exit list doesn’t always mean people feel loyal or inspired to give you their best work. Enter the emerging phenomenon known as “job hugging.” This is a trend where employees stay put not because they’re engaged, but because they fear instability, economic uncertainty, or lack of opportunities elsewhere.
This is where leadership becomes the difference-maker. Employees stay out of fear when leadership is passive. They stay out of commitment when leadership is intentional. Leaders who coach their teams, create development pathways, create an authentic feeling of being valued, and remove obstacles convert reluctant stayers into energized contributors. This shift is where real ROI appears, because engaged employees do more than stay. They advance your business in ways that stagnant teams never will.
According to a 2025 study, 75% of U.S. employees say they plan to stay put through 2027, not necessarily out of satisfaction, but out of caution. This type of retention can mask deeper, more costly problems, such as lack of innovation, flat performance, and a disengaged culture where people do the bare minimum work.
In short: retention + stagnation ≠ real engagement.
Measuring What Matters Not Just What Looks Good
That’s why measuring the ROI of employee engagement requires more than tracking who came and went. The real win is when you see fewer departures caused by dissatisfaction because employees feel valued, challenged, and committed.
That’s also why I built the free Employee Engagement Fund ROI Calculator (linked below). This tool helps you model the true financial benefit of improved retention by estimating the cost savings when turnover goes down, factoring in recruitment, onboarding, lost productivity, and more.
👉 See How You Compare — Industry Turnover Benchmarks + Replacement Cost Cheat Sheet and ROI Calculator
Use it to benchmark where you are now and where you could be with a strategic engagement investment.
The Bottom Line: Engagement Isn’t a Perk It’s a Profit Lever
In 2025, with only a third of U.S. employees engaged and just one in five globally doing more than the bare minimum, engagement is no longer optional, it’s critical. Leaders who consider engagement an expense will likely see it as such in their budgets. Leaders who treat engagement as an investment will reap the returns in stability, performance, and long-term growth.
If you want to move beyond guesswork and see the real cost (or savings) tied to engagement, especially through the lens of turnover, start with retention as your anchor metric. Then, use tools like my ROI calculator to translate engagement into bottom-line value.
Because when done right, engagement doesn’t just feel good. It pays.
Leaders who invest in fulfillment and growth unlock engagement that lasts. Take the next step by assessing your team’s turnover risks and evaluating where leadership can create a more motivating environment. Use the ROI calculator to quantify the opportunity and begin building a culture people want to be part of long-term. Get in touch with me if you want to schedule a short, no-cost advisory conversation.
