The Power of Informal Networks and Emotions
On Employee Satisfaction and Retention

A financial services company doubled in size in only three years while maintaining an impressive 15% year-on-year sales growth. As they went through this enormous growth, it was critical for them to keep morale high.

As one of their senior executives emphasized:

“We don’t want to leak social capital. We cannot afford to lose existing employees while we hire new ones. We need to put our efforts on social plumbing.”

Employee satisfaction is key to employee retention. If people are happy, engaged, and motivated, they’re more likely to stick around, which benefits both your company and customers.

Therefore, every year, Innovisor worked with them to uncover insights into their organizational informal networks and engagement to strengthen employee satisfaction and retention.

The company reached “normal” levels of employee satisfaction after three years but aimed for more. They required the project team to strive for exceptional levels, challenging them to surpass the average.

The key to this ambitious objective was found in the organizational networks – specifically how emotions and support moved through the influence network. They could not afford NOT to engage with the informal opinion leaders or influencers, better known as the #ThreePercentRule.

Innovisor’s 15+ years of experience had already shown that emotions could spread through the informal networks of organizations, and this case only confirmed it once more.

However, the major discovery for this financial services company was that the engaged and disengaged people clustered together, and engagement and disengagement were driven by the informal influencers that shaped employee perceptions. The disengaged influencers had a negative impact on the perceptions of their cluster, while the engaged influencers had a positive impact.

In the middle of the below network visualization sits ‘Adam’ who is unhappy with his company. When asked if he would recommend his workplace to a friend, he responded negatively. This does not make him a negative person. On the contrary, Adam is trusted by many people. They seek him out for help and advice and see him as a sympathetic person.

Being a dissatisfied influencer is, however, a cause for concern. As evident in the image below, his influence can easily affect the morale and motivation of other employees.

Scroll from left to right to see the effect of Adam’s influence on his connections and his connections’ connections

You may think that this is just an isolated case inside.

The answer is: NO! It isn’t!

In the middle of the below visualization sits ‘Ellen’. Contrary to Adam, Ellen recommends the company as a great workplace. Her influence is contagious to her network. Not only Ellen’s connections but also the connections of Ellen’s connections show a positive picture.

There are of course still people who are not outspoken promoters of the company – those in yellow. They are less likely to recommend the company to others and still may be more susceptible to leaving the company for a better opportunity. That’s similar to Adam’s influence network. However, the big difference is that those who are less likely to recommend the company in Ellen’s influence network are surrounded by people who actively recommend the company.

Scroll from left to right to see the effect of Ellen’s influence on her connections and her connections’ connections

This financial services company confirms what we have seen in so many years: it is crucial to recognize the power of emotions and commitment through networks.

In conclusion, this financial services company recognized the importance of understanding informal networks and the flow of emotions and feelings within them to improve employee satisfaction and retention. By going beyond traditional engagement surveys and leveraging insights into organizational networks and key influencers, they were able to target their actions more effectively and create a positive cycle of emotions and commitment through networks.

By listening attentively to influencers, building trust and engagement with them, and using their input to inform organizational-wide initiatives, they already achieved significant improvements after tracking how sentiments and commitment of influencers changed. They also have recalibrated certain actions, to increase the chances of a further improvement in their employee satisfaction, ultimately leading to greater business success.