Staff engagement, co-workers' complementarity and employee retention: evidence from English NHS hospitals

Abstract

Retention of skilled workers is essential for labour-intensive organizations like hospitals, where an excessive turnover of doctors and nurses can reduce the quality and quantity of services provided to patients. Exploiting a unique and rich panel dataset based on employee-level payroll and staff survey records from the universe of English NHS hospitals, we investigate empirically the role played by two non-pecuniary job factors, staff engagement and the retention of complementary co-workers, in affecting employee retention within the public hospital sector. We estimate dynamic panel data models to deal with reverse causality bias, and validate these estimates through unconditional quantile regressions with hospital-level fixed effects. Our findings show that a one standard deviation increase in nurse engagement is associated with a 16% standard deviation increase in their retention; and also that a 10% increase in nurse retention is associated with a 1.6% increase in doctor retention, with this co-workers' complementarity spillover effect driven by the retention of more experienced nurses. Nurse and doctor engagement is positively associated with managers who have effective communication, involve staff in the decision-making process, and act on staff feedback; in particular, older nurse engagement is responsive to managers caring for staff health and wellbeing.