Employee turnover is expensive. While some turnover can be expected, poor management can cause the normal turnover to climb to an excessive level. According to the U.S. Bureau of Labor Statistics, turnover can cost an organization 33 percent of an employee’s total compensation, including wages and benefits. The impact, however, is not only financial; it also adversely affects employee morale. Although hard to quantify, poor morale results in a domino effect that negatively impacts efficiency and effectiveness.
Obviously, it’s important for organizations to reduce turnover rates. However, in order to reduce these rates, organizations must first understand the main reasons employees leave for other positions. Good people don’t leave good organizations—they leave poor managers!
Good employees quit for many reasons. The following is a list of what might be considered 12 reasons for employee turnover.
- Rude behavior. Studies have shown that everyday indignities have an adverse affect on productivity and result in good employees quitting. Rudeness, assigning blame, back-biting, playing favorites and retaliations are among reasons that aggravate employee turnover. Feeling resentful and mistreated is not an enticement for a good work environment.
- Work-life imbalance. Increasing with economic pressures, organizations continue to demand that one person do the work of two or more people. This is especially true when an organization downsizes or restructures, resulting in longer hours and weekend work. Employees are forced to choose between a personal life and a work life. This does not sit well with the current, younger workforce, and this is compounded when both spouses or significant others work.
- The job did not meet expectations. It has become all too common for a job to significantly vary from the initial description and what was promised during the interviewing stage. When this happens it can lead to mistrust. The employee starts to think, “What else are they not being truthful about?” When trust is missing, there can be no real employee ownership.
- Employee misalignment. Organizations should never hire employees (internal or external) unless they are qualified for the job and in sync with the culture and goals of the organization. Managers should not try to force a fit when there is none. This is like trying to force a size-nine foot into a size-eight shoe. Neither management nor employee will be happy, and it usually ends badly.
- Feeling undervalued. Everyone wants to be recognized and rewarded for a job well done. It’s part of our nature. Recognition does not have to be monetary. The most effective recognition is sincere appreciation. Recognizing employees is not simply a nice thing to do but an effective way to communicate appreciation for positive effort, while also reinforcing those actions and behaviors.
- Coaching and feedback are lacking. Effective managers know how to help employees improve their performance and consistently give coaching and feedback to all employees. Ineffective managers put off giving feedback to employees even though they instinctively know that giving and getting honest feedback is essential for growth and building successful teams and organizations.
- Decision-making ability is lacking. Far too many managers micromanage to the level of minutia. Micromanagers appear insecure regarding their employees’ ability to perform their jobs without the manager directing every move. Organizations need employees to have ownership and be empowered! Empowered employees have the freedom to make suggestions and decisions. Today “empowerment” seems to be a catch-all term for many ideas about employee authority and responsibility. However, as a broad definition, it means an organization gives employees latitude to do their jobs by placing trust in them. Employees, in turn, accept that responsibility and embrace that trust with enthusiasm and pride of ownership.
- People skills are inadequate. Many managers were promoted because they did their jobs very well and got results. However, that doesn’t mean they know how to lead. Leaders aren’t born—they are made. People skills can be learned and developed, but it really helps if a manager has a natural ability to get along with people and motivate them. Managers should lead by example, reward by deed.
- Organizational instability. Management’s constant reorganization, changing direction and shuffling people around disconnects employees from the organization’s purpose. Employees don’t know what’s going on, what the priorities are or what they should be doing. This causes frustration leading to confusion and inefficiencies.
- Raises and promotions frozen. Over the years, studies have shown that money isn’t usually the primary reason people leave an organization, but it does rank high when an employee can find a job earning 20 to 25 percent more elsewhere. Raises and promotions are often frozen for economic reasons but are slow to be resumed after the crisis has passed. Organizations may not have a goal to offer the best compensation in their area, but if they don’t, they better pay competitive wages and benefits while making their employees feel valued! This is a critical combination.
- Faith and confidence shaken. When employees are asked to do more and more, they see less evidence that they will ultimately share in the fruits of their labor. When revenues and profits increase along with workload, organizations should take another look at their overall compensation packages. Employees know when a company is doing well, and they expect to be considered as critical enablers of that success. Organizations need to stop talking about employees being their most important asset while treating them as consumables or something less than valuable. If an organization wants empowered employees putting out quality products at a pace that meets customer demand, they need to demonstrate appreciation through actions.
- Growth opportunities not available. A lot of good talent can be lost if the employees feel trapped in dead-end positions. Often talented individuals are forced to job-hop from one company to another in order to grow in status and compensation. The most successful organizations find ways to help employees develop new skills and responsibilities in their current positions and position them for future advancement within the enterprise. Employees who can see a potential for growth and comparable compensation are more inclined to stay with an organization
As managers, we can spend time arguing whether these are the most important reasons good employees quit…or we can find ways to entice them to stay! iBi