Top Causes of Employee Turnover and How to Address Them

October 10, 2022

Top Causes of Employee Turnover and How to Address Them 2560 1707 Shegerian Law

Employee retention can be a challenging ordeal for many companies. Think of sudden resignations leading to grueling hours of resume sorting, interviews, training sessions, and many more. Since recruiting can take up a significant amount of time and resources, retention should instead be the focus of employers and managers.

Talents are one of—if not—the most important resources of a company. Losing one employee after another can be heartbreaking, not to mention detrimental to your company’s overall productivity. It may also hurt your reputation in the long run if managers don’t properly address internal issues that may be causing the resignations.

To reduce employee turnover, employers and HR professionals must identify its top causes. Doing so will make it easier to pinpoint and implement the right retention strategies. Before taking a deep dive, let’s start by defining employee turnover.

What is Employee Turnover?

Employee turnover is the rate “at which employees leave a company and are replaced by new employees.” There are two types of turnover.

Involuntary turnover – refers to fired or furloughed employees due to performance or management issues. They did not leave the company on their own accord.

Voluntary turnover –  is when they quit for various reasons—to retire, change careers, pursue opportunities, and others. Employees who resigned consciously decided to leave their jobs, thus making it a voluntary turnover. Most parts of this article will discuss the reasons for voluntary turnovers among top talents.

Employee turnover is often interchanged with employee attrition, which also occurs when an employee leaves a company. However, attrition only happens when an employee is retired, discharged, or terminated due to the elimination of the company role.

In a nutshell, employee turnover requires replacing the talent who left the organization, while attrition doesn’t seek new hires for the same position.

A good turnover rate varies among industries. In customer service, the average turnover rate is 17%, 14% in sales, and in manufacturing, around 15%. Even though the average annual U.S. turnover is 20%, the numbers are split among varying industries. It’s best to check yours for better measure.

The Cost of  Losing an Employee

Losing employees can be emotionally and financially costly. For a better picture, losing an employee can cost up to 33% of their annual salary. More money will be spent on advertising the job vacancy, screening, interviewing, and just the cost of the entire hiring and onboarding process.

The numbers are even higher for entry-level positions. It costs 50% of the employee’s salary to replace the job post. Luckily, 75% of employee turnover reasons can be prevented.

The Top Reasons for Employee Turnover

1. Interpersonal conflict

A good working environment is vital to employee productivity. However, there are times when employees will not like everyone they’re working with. If not handled with care, differences could ultimately lead to conflict.

While interpersonal conflict is often attributed to individual differences, it may also be due to company culture in some cases. Some groups may be treated differently, leaving an unfair disadvantage for the rest. Even though it’s a primary human function to give mutual respect despite differences, it is the companies’ responsibility to step in.

What to do about it:

More internal efforts should be made to ensure a healthy environment where everyone can thrive. Regular and intent check-ins must be made to secure workplace harmony. Team building activities may also help establish camaraderie among employees.

2. Lack of career growth

It is innate for people to strive for growth and development. Whenever they feel stuck and stagnated at work, the tendency is to seek another path where professional growth is more attainable

What to do about it:

Promotion may be the traditional way to grow, but sometimes there just aren’t enough senior roles for everyone. Companies may try consulting with employees on where they see themselves in the future. Once their plans are laid out, managers can try setting goals and learning opportunities to prepare them for greater responsibilities. 

3. Lack of appreciation

Employees need to feel seen and appreciated for the hard work they do for the company. Scorecards and evaluation sheets help them track their wins, but giving them sincere words of appreciation and reiterating their importance in the organization are just as vital. Doing these may help motivate them to do a better job, so they stay in the company longer.

What to do about it:

Affirmations like “You did a great job today” or “You are an asset to the company” can go a long way. Practicing a culture of words of recognition is not limited to managers to employees only; it can also be done in a peer-to-peer setup to ensure appreciation among teams.

4. Substandard compensation, tools, or facilities

Whether you admit it or not, pay is one of the strongest driving forces of employee motivation and satisfaction; however, it can also be one of the most significant causes of dissatisfaction. Aside from this, employees must work with the right tools to deliver optimal results, including work devices, benefits, and even allowances.

What to do about it:

To maintain employee retention, paying overtime can help. Companies may also lay out programs and keep an open ear to hear their workers’ struggles with work-from-home equipment, health insurance, and more to supplement these needs.

5. Poor and inefficient management

Successful organizations are built on competent leadership because employees need guidance and proper organization. As the saying goes, employees do not leave companies—they leave the management. Poor and inefficient management could lead to disorganization and a lack of a sense of purpose among employees.

What to do about it:

Leadership training programs must be taken seriously in a company with a growth mindset. Handpick the best talents to develop and ensure they possess integrity and sharp decision-making skills. To ensure the type of management enforced works, you may try regular check-ins and anonymous feedback across teams.

6. Stiff work environment

Companies were able to adapt to flexible work options, especially during the COVID-19 outbreak. But even pre-pandemic, employees were already yearning for a more flexible working environment. A  2019 survey found that 30% of employees left their jobs because of stiff working environments, and 16% were looking for more flexible companies. 

What to do about it:

Employees’ comfort is necessary to their productivity, as they cannot deliver their best if forced to meet demands under unpleasant circumstances. Start with asking them how they define “work flexibility.” From there, ask for their suggestions to meet them halfway. You may also regulate “on” and “off” hours for your employees to meet and communicate concerns.

7. Burnout

There are many aspects to employee burnout. Sometimes, employees are expected to perform so much by giving little time to breathe and focus properly. It also happens when someone’s job description is not clearly defined. Like others, employees have activities and duties to look forward to after work. Overworking may cause stress and dissatisfaction with their employers.

What to do about it:

To avoid overloading certain employees with work, you may hire new people who can take care of the other tasks. Managers also need to be more receptive to their employees’ energies. Even the most reliable and enthusiastic needs some breather. Pressuring them to do more work won’t necessarily produce the best results.

8. Retirement

No one can’t win against age, and that’s okay. Before someone else’s retirement, ensure that you have fostered an insightful and productive leadership program among the next generation of leaders in your organization. You may not prevent turnover for this cause, but at least you can mitigate stress and inconvenience in your workplace by being prepared.

Make Employee Retention a Top Priority

Employees are happier, more engaged, and more productive when valued and appreciated. They spend the majority of their time every day helping your business reach its goals. Thus, their time in the company must be as worthwhile as their time outside of work.

People are less tolerant of workplace inequities and abuse in this time and age. Thanks to the rise of movements and social changes, every employee is now treated just as important as the bosses—and that’s how it should be.

If you have ever experienced workplace bullying, you may always seek the help of our lawyers here at Shegerian Law. Why consult with us? Our 98% success rate is proof enough that we can assist you. Get help now!

 

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