Truth & Trends in Employee Turnover

Work Institute has released its yearly Retention Report, a deep dive analysis into the factors influencing employee turnover and retention, along with recommendations to employers for reducing such turnover. As the economy grows and the employment rate plummets, employers are forced to recruit already employed workers. This interaction provides employees the flexibility to assess their opportunities, and become “increasingly selective about where they work and… [empowered to] change jobs when a better opportunity is present” (p.8).

Consequently, just as qualified employees are recruited by other companies, employers who do not shift their retention strategy to one that aligns with the reality of increased employee control will be left with the less qualified talent they might have let go had their top talent not been recruited by more desirable options.

As such, “companies must make intentional efforts to attract and retain talent to meet the demands of their business” (p. 14). Understanding the factors employees cite as their reasons for leaving can highlight for management necessary changes needed to encourage retention of quality talent, particularly in such a competitive landscape. The sections that follow summarize Work Institute’s findings and recommendations to support employers in better understanding their employee satisfaction levels and how to retain top talent.

Work Institute found the following ten reasons employees cite in their exit interviews when leaving a company. Understanding these reasons can help managers make intentional changes in their organization that contribute to employee retention.

Top 10 Categories of Reasons for Leaving in 2017

Because Relocation, Involuntary, and Retirement are less preventable reasons for leaving, the summary below will outline the insights and recommendations found in the seven remaining categories, as researched by Work Institute.

Career Development

In considering available career development options, employees explain that they might not have enjoyed the work they were doing or felt there wasn’t an opportunity to grow in their careers or gain new skills. Other employees within the Career Development category also expressed the desire to return to school for an advanced degree. To account for these factors within the Career Development category, employers must actively work to understand the “needs, preferences and goals of their workers” (p. 18) or risk losing top talent.

Work-Life Balance

Second in the list of categories is Work-Life Balance. Elements within this balance include more desirable schedules, more ideal daily commutes, and different levels of travel commitments. The emphasis on scheduling within work-life balance means employers must understand how to offer the schedules their employees desire in order to attract and retain talent. In sectors in which flexible schedules are requirements of the position, employers must design ways to improve other conditions within the company to increase overall desirability.

Manager Behavior

Manager behavior problems including unprofessionalism, lack of support, poor employee treatment, general behavior, poor communication, lack of manager competence manager fairness, and upper management. Employees want to see managers behaving professionally and fostering a supportive, respectful work environment. To remediate these issues, employers must properly train managers in relationship skills and proper conduct.

Well-Being

While Well-Being is within the Top 10 Categories of Reasons for Leaving, it has seen a decline since 2010 from 12% to 9%. Employees do still prioritize caring for themselves and their families, but it seems that “at least some of the efforts companies have made to promote general healthy have had a small, but noteworthy impact” (p. 24). To retain high-quality talent, employers should continue their efforts in supporting employee well-being by paying attention to their workers’ needs and the challenges they and their families may face.

Compensation & Benefits

Compensation & Benefits made up 9% of the reasons for leaving in 2017. A “lack of raises, below-market salaries and higher-paid co-workers were often cited by employees who left due to compensation issues.” Though compensation is not often the sole reason an employee may leave, “employers must become increasingly concerned about the role of pay in employee retention and they must understand the specific pay elements of why people leave” (p. 25).

Job Characteristics

Over the past seven years, the Job Characteristics category has increased by 130%, up from 3% in 2010. With increased control in where employees choose to work, “workers are not tolerant of jobs that do not meet their expectations” (p. 26). Factors within the Job Characteristics category include general dissatisfaction, an overload in what the role asks for, limited resources, feeling they were poorly trained, dissatisfaction with the work, and a lack of empowerment. To counter such possibilities, employers must better provide realistic job previews, communicate the core characteristic of the role, and provide effective training to prevent turnover.

Work Environment

Work Environment, or company culture, has trended up in the reasons provided by employees. This category includes problematic co-workers, a culture-employee misfit, problem with the mission or values of the company, an unsafe work environment, a hostile atmosphere, general environment, and poor facilities. The growth of this category demonstrates that employees must more intentionally improve conditions that could prevent turnover, as employees do not need to tolerate an unfavorable work environment if another option becomes available elsewhere.

As illustrated, several factors can be addressed in preventing employee turnover. Considering the estimated turnover cost to an organization is 33% of the employee’s salary, or $15,000 on average, organizations are wise to begin addressing the preventable root causes of turnover.

By gathering feedback from employees about their preferences, expectations, and intents, organizations can create conditions that attract and retain employees before risking preventable turnover. This involves creating a culture that encourages employees to use their voice to offer ideas, to express concerns about workplace policies, and to have influence in decisions that are made by the organizations. Constant and healthy communication between employee and employer in the form of feedback that is then acted upon “increases attraction and retention and creates a productive workplace” (p. 34), a small cost considering the high expense of turnover.

Andrew Gagen is the Founder & Lead Recruiter at MVP Recruiters. His recruiting practice has an exclusive focus on the Public Relations & Corporate Communications function. Andrew works nationwide with corporate clients helping them to identify and hire fabulous communications talent. He is an expert in recruiting individuals who have the essential planning, critical thinking and creative skills required to drive a business forward – individuals with gravitas and business acumen who know how to think strategically, digitally and globally.