In our last blog, we touched on the adage that “employees don’t leave bad companies, they leave bad managers.” But beyond a crummy manager, what are the other reasons that employees jump ship and what can you do to fix it before they hand in their letter of resignation?
But before we dive in, let’s first toss out a few stats about why slowing your revolving door for employees is good for business. According to a Gallup Poll, it costs a company up to two-times the employee’s annual salary to replace them should they jump ship. However, extrapolating that to an entire organization, Gallup notes that the overall annual turnover rate was 26.3% in the US in 2017, meaning that a 100-person company with an average salary of $50,000 per employee pays between $660,000 and a staggering $2.6 million per year to account for employee turnover and replacement.
So, now that we all understand the gravity of the situation, particularly in today’s tough economic times, let’s look at the key drivers of turnover and a few solutions that can stem the tide.
Failure to jive with company culture:
In a recent survey, a whopping 43% of respondents indicated that they were looking for a new job and cited corporate culture as the main reason. Now, the thing about corporate culture is that it generally evolves over time, as do the wants and needs of your employees, so it is not that far-fetched that the two will fall out of alignment at some point. However, it is still a salvageable problem if you conduct exit interviews. Ask your departing employees if there is any aspect of your company culture that they struggled with. Some are obviously going to be non-negotiable, but if you hear that the managers are unsupportive or that they hate always being left out of the loop, you can take action on your end to fix these things before you lose more valuable workers.
Failure to be flexible:
This may come up in a company culture discussion, but being a flexible workplace deserves its own bullet point here, with one survey by FlexJobs finding that 82% of workers would be “more loyal” to their employer if the company was more accommodating. Usually when we think about flexibility, we think about work from home set-ups, with a Gallup survey finding that 37% of employees would leave their current gig for a work-from-home opportunity. If you can make it work for your companies, even if it’s just one day a week, it can help some of your workers achieve a better work-life balance and feel more engaged in your business. For some industries and even some jobs in more flexible industries, working at home simply isn’t feasible, but there are other ways you can show your flexibility, such as offering alternate work hours or even job sharing to demonstrate your flexibility.
Failure to acknowledge contributions:
When someone does something well in your company, do you take the time to praise them for their contributions? According to a study by Office Team, two-thirds of employees are considering quitting their jobs because they feel under-appreciated, with the number even higher among millennial workers. As we touched on in an earlier blog post, one option that can make workers feel valued, as well as improve your corporate culture, is to offer an employee incentive program that rewards those employees that go above and beyond with either praise or tangible gifts. Now, it should be noted that contributions do not always need to be noticed in cash. In fact, a study finds that only 12 percent of employees leave their jobs in search of more money, and nearly three-quarters would actually take a pay cut if they thought that it would nab them a better job.
Failure to move up the career ladder:
Moving up the career ladder may seem like a task that should fall squarely on the shoulders of the employee, but employers have a lot to do with the process! Providing training to help employees advance, for example, is associated with a 30-50% higher retention rate than companies that don’t promote a culture of learning, according to one study. Further, a study by Willis Towers Watson finds that nearly three-quarters of “high-retention-risk” employees want to leave because they see no future advancement in the current job. This is a problem that could be easily rectified by helping employees lay out what their trajectory within the company looks like and what skills or experiences they need to achieve in order to move up to the next level.
Failure to address work stress:
No matter what industry you’re in and what role your employees carry out, at some point or another, work can prove stressful. When an employer fails to acknowledge these stressors, folks start looking for outside opportunities. In one study, 30% of respondents said they would consider quitting if they were unhappy at work, and followed up that statement with a suggestion that a hair under 80% of their bosses didn’t care about their happiness level. Further, 20-50% of those who quit their jobs cited burnout as a top reason, and this is particularly acute among millennial workers, who feel that job stress is particularly damaging to their mental and physical health. Luckily, there’s much you can do to stave off burn out, including heading it off before it becomes an issue (as detailed in an earlier blog post).
Need more tips on stemming your revolving door? Give us a call and we will be happy to trouble-shoot the problems and provide solutions to address your top concerns.