Why do your employees quit?

August 1, 2016 Mirette Sedarous

Why employees quit

You court them on social media and at job fairs. You interview, test, and reference-check them. You negotiate with them, file paperwork, and onboard them. And after pouring all that effort and resources into your hires, you watch in frustration as they walk out the door. What causes a good employee to quit?

Every time an employee quits, it creates disruption and costs your organization approximately 1.5 times his or her salary to replace them. And the overall effect of a high turnover rate can erode both organizational continuity and morale. The stakes are high, but unfortunately, so are attrition rates for most workplaces.

According to the Bureau of Labour Statistics for 2014, the average length of time an employee stayed with one company was 4.6 years. And as younger generations enter the workforce, that timeframe is likely to shrink even further; a study by Future Workplace showed that Millennials expect to stay in one job for less than three years.

According to Equifax, more than 40% of US employees leave within six months of starting a new job. And while some turnover is inevitable (and even desirable), a LinkedIn study found that most of it is avoidable. In the US, the majority of turnover—about 66%—happens for preventable reasons.

So what are the top factors influencing the decision to quit?

Lack of vision

According to a multi-year research initiative by Gallup, a strong corporate vision that filters down into every job is one of 12 dimensions that strongly influence employee retention. Employees who are able to connect the job they do to the company’s core values and reason for being enjoy a more satisfying emotional connection to their work.

>>How competencies can help: While a mission and vision statement are important, they don’t always connect meaningfully to the work employees do. To translate company values into on-the-job behaviours, consider selecting core competencies for your organization.

Lack of opportunity

Frustration with a lack of opportunity to advance is one of the most common reasons employees move on, and that’s likely to continue to be a key decision point in future. According to a “Class of 2014” study conducted by Achievers, Inc., the youngest group to enter the workforce (Generation Z) prioritize opportunities for advancement ahead of money, and they put benefits such as training and mentorship and workforce challenges at the top of their list of meaningful incentives.

A recent Forbes article looked at the traditional corporate ladder and identified its shortcomings in a world where employees are increasingly motivated by opportunities to learn and grow. By turning the ladder on its side and creating more opportunities for horizontal career exploration, the author suggests, the organization can keep more of their employees engaged and challenged. At HRSG, this approach is called “latticing”—supporting employees to explore myriad career directions across departments or silos by showing them how their existing skills, experience, and potential may be applicable to new opportunities.

>> How competencies can help: When jobs are defined with competencies, it enables employees to see how their existing skills and experience match up to other opportunities across the organization. For insight into how competencies support career lattices and self-directed development, download this HRSG ebook.

Work-life imbalance

An EY report identified “stagnant wages” as the top reason full-time workers quit their jobs globally, but but it also revealed that three of the top six factors influencing the decision were related to the work-life balance, including the inability to work flexibly and the need to put in excessive overtime hours.  One-third of full-time employees globally say it has gotten more difficult to manage work/family in the last five years, and nearly half (47%) of managers work more than 40 hours per week.

While always-on employees has become the new norm and the fast pace of business isn’t going to slow down any time soon, it’s worth asking whether the organization is willing to sacrifice its best talent in order to maintain these high expectations of availability and commitment. Something as simple as offering shared work arrangements and remote-work opportunities could dramatically improve retention.

Poor leadership

In a 2015 Gallup study, about half of the 7,200 survey respondents indicated that they quit a job to get away from their manager. The main reasons for the deterioration of the relationship between managers and subordinates appears to hinge on a lack of open communication, especially around performance expectations. There was a direct correlation between employee engagement and their belief that they can approach their managers “with any type of question” and that their managers “help set work priorities.”

Similarly, another Gallup study found that companies where employees get regular feedback have a 14.9% lower turnover rate than companies where regular feedback isn’t provided.

>> How competencies can help: Competency-based job profiles define performance in terms of objective and observable behaviors, which gives managers and employees a neutral, common language for discussing improvement and potential. Applying the right competencies to management job profiles can also help managers improve in key areas, such as fostering communication and ensuring accountability. Learn more about transformational leadership, or download the HRSG guide to transformational leadership

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