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.