Stay with Me: Why Good Employees Leave

By Lacey Conner, SHRM-CP on Aug 20, 2019
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There is perhaps nothing more disruptive or expensive for a small business than employee departures. According to the Work Institute, a Franklin, Tennessee-based consulting firm, an estimated 41 million people quit their jobs in 2018 – up 8 percent from 2017 – and 47 million people, or roughly one in every three workers, will leave their jobs in 2020. And, Gallup reports that 21 percent of millennials (people born between 1980 and 1996) say they’ve changed jobs within the past year. This is more than three times the number of non-millennials who report the same, and it costs the U.S. economy $30.5 billion annually.

And, employees have the upper hand in today’s tight labor market, where unemployment hovers at or below 4 percent.

The Work Institute quantifies the cost of each employee departure at about one-third of that worker’s annual earnings, including recruiter fees, temporary replacement workers and lost productivity. People quit their jobs for all sorts of reasons, but most commonly, they leave due to conditions within employers’ control. In other words, small business owners can do more to improve employee retention.

Before they can make meaningful changes, though, employers must first understand the reasons employees vacate their positions. Contrary to popular belief, it’s not necessarily about money. reports only 12 percent of employees leave their jobs for higher pay.

Know Before They Go: How to Ease the Pain of Employee Departures

Why Employees Quit

The top three reasons people quit, according to the Work Institute, pertain to corporate culture and interpersonal relationships.

  1. Lack of Career Development Opportunities

    Most employees seek upward mobility. If their careers stagnate, they’ll be more likely to look elsewhere for stimulating work. Professional development opportunities help them grow their skillsets and take on new challenges. The result is confident employees who feel valued and are much more likely to stick around.

  2. Work-Life Imbalance

    Employers who are inflexible when it comes to scheduling are likely to see higher turnover rates. In today’s fast-paced world, employers should create a culture that encourages both professional and personal satisfaction. Empathy for employees’ lives outside of work is part of what makes a company a desirable employer. Consider alternative work arrangements such as telecommuting, job-sharing, shortened summer hours or other flexible arrangements to give employees opportunities to tend to personal obligations. When they know their personal lives are in order, they’ll concentrate better when they are working.

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  3. Bad Boss

    Lack of support and incompatible personalities can lead to poor relationships between employees and their managers, one of the leading reasons for employee departures. A toxic relationship with a supervisor undermines the employee’s engagement, confidence and commitment. It’s not always the manager’s fault, of course, but employers should watch for these and other warning signs of poor management to make sure supervisors are not contributing to employee turnover:

    • Limited communication with their direct reports, who may feel like their bosses are too busy to listen to their concerns.
    • Mistrust of employees, which often manifests itself in micro-management that stunts employee growth and performance.
    • Hostility and negativity. Negative remarks will not motivate employees to high performance. In fact, performance will suffer because employees’ greatest focus will be on covering and defending themselves.
    • Taking the credit for team projects. People want to be recognized for their contributions to an organization. A CareerBuilder study, in fact, found that 50 percent of workers would be enticed to stay with a company if they received more recognition.
    • Lack of accountability, as evidenced by a manager who blames other people for departmental problems.

A Gallup poll of more than 1 million employed U.S. workers found the number one reason people quit their jobs is a bad boss or immediate supervisor.

Small business owners have a lot on their plates and often are juggling HR and other responsibilities at the same time. It can be difficult to maintain a harmonious workplace and detect signs of employee dissatisfaction. That’s where an outside resource can help.

Solid HR counsel from a professional employer organization (PEO) such as Axcet HR Solutions can provide an invaluable outside perspective on the issues that may be driving employees away. More importantly, a PEO like Axcet can help small business owners rectify the problems and retain their best employees.

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