Employees are quick to spot the qualities that differentiate healthy workplaces from those that drain mental and emotional energy. It doesn’t take very long for the most common workplace pain points to become obvious, causing workers to pump the brakes on career plans within an organization. Once employee retention issues pop up, employers must make crucial changes or risk the loss of top performers.
Although employee turnover is a common phenomenon, simply expecting it to be the status quo is both expensive and problematic. Regardless of why your employees are opting out, understanding their intrinsic motivations is key to enticing them to stick around.
What primary factors drive employee turnover nowadays? We’re spilling the tea on common causes—and offering practical advice on how to instill positive change from the top down.
Main causes of employee turnover
It’s tough to pinpoint one leading cause of turnover because everyone’s experience is unique based on career trajectory. Expectations, personal lives, and professional goals are different for all employees—from intro-level interns all the way up to C-suite executives.
With cultural waves like the Great Resignation, more companies are investing in tools like employee turnover software to measure major turnover drivers. As a result, employees stand to benefit from incentives that transform stale workplace cultures into people-first environments.
The turnover causes below are just a few examples of why employees head for the exit. Responsible employers should be proactive, collaboratively with team members to improve conditions and reduce known stressors like the ones below.
1. Inadequate compensation and benefits
When employees start to leave in large numbers, look at the root causes. Not surprisingly, one of the biggest organizational problems that creates turnover is low base pay, or rates that don’t keep up with market value for specific skills.
The Pew Research Center conducted a turnover survey in 2021 (during the height of the Great Resignation) and found that up to 63% of workers who left did so because the pay was reportedly too low. Whether this is merely perception in the worker performing the job or an inarguable and objective fact, the results clearly indicate a problem.
Employers must be transparent and strive for competitive compensation when recruiting for new roles, maintaining current employee benefits, and issuing pay increases fairly.
2. Lack of opportunities for growth and development
For employees looking to stay put, personal development and career opportunities are key. Employers who take a proactive stance on engagement have a better chance of higher turnover, even though Gartner projects that new turnover rates could be up to 50-75% higher than in previous decades.
Want to support employees who are eager to keep learning? Offer plenty of internal training, mentorship opportunities, and job development courses. Corporate sponsorship for continued education is also a major perk that helps employees bring their best skills to the table.
3. Poor leadership and management
In modern workplaces, numerous reports now indicate that out-of-touch leadership takes the blame for many employee turnover causes. Forbes highlighted several shocking examples in recent years, including internal emails from upper management asking employees to work for free or displaying a downright lack of concern for personal leave.
Toxic culture or management styles at the top of the executive chain have ripple effects all the way to entry-level employees. Pay careful attention to the way that managers and leaders interact with everyone at the organization. When inappropriate leadership rears its ugly head, HR representatives must tactfully confront and provide on-the-job accountability to mitigate new concerns.
4. Negative workplace culture
Most employees can quickly point out or describe the type of environment they don’t want to work in: “Greedy,” “self-focused,” “stressful,” or “high-stakes.”
A negative workplace culture doesn’t just affect business operations or productivity. Daily negativity seeps into personal lives, too. Over time, employees might feel the need to escape in order to protect themselves mentally and emotionally.
Negative sentiments can be abstract and hard to track regularly. A textual analysis platform like Erudit offers a non-invasive way to keep the negativity in check and build a healthier environment for everyone at work.
5. Lack of work-life balance
In the midst of the Great Resignation, up to 39% of employees reported working too many hours for an employer. As remote and hybrid work becomes the norm, the lines between work and home are blurry for workers across the board. Nowadays, employees feel increased pressure to stay plugged in, constantly responding to communication and tasks even after the clock hits 5:00 PM.
But no matter how flexible modern working styles become, employees need time away from their screens. Without healthy boundaries, mental stressors pile up, and the decision to leave an otherwise steady job can feel like an urgent need.
To avoid work-life chaos, regularly ask employees how they perceive their separation between the professional and personal. Check-in to ensure that burnout levels aren’t high, and practically encourage workers to use accrued PTO or days off as needed.
6. Unfair treatment and discrimination
Getting singled out at work—for all the wrong reasons—can motivate employees to take their talents elsewhere. Even though there’s plenty of up-front HR training for issues like discrimination and unfair policies, these problems unfortunately still happen. The Society for Human Resource Management (SHRM) reports that racial inequality in the workplace can cost American businesses up to $172 billion annually.
Transparency, trust, and equality are non-negotiables for avoiding high employee turnover stemming from diversity and inclusion concerns. When workers experience unfair treatment based on race, gender, sex, or personal values, the fallout is serious.
Not only are these workers more likely to leave, but harmful treatment exposes companies to litigation and compliance issues. It goes without saying that such circumstances are costly and extremely damaging to brand reputation.
7. Commute and location issues
The COVID-19 pandemic gave millions access to the perks and advantages of work-from-home life. But with return-to-office policies making a comeback, factors such as commute times and location constraints are once again at play when discussing turnover.
Workers in the 18-34 year age bracket (Gen Z and younger Millennials) are more likely than other employees to leave a job due to long or laborious commutes (typically over 30 minutes each way). Plus, they’re more likely than other generations to describe the commuting experience as “painful.” An extension of the workday due to travel is no longer desirable, especially with so many flexible and hybrid policies up for grabs in the job market.
Avoid extra tension post-hire, and be as upfront as possible in the posted job description for any new role. List special exemptions or in-office expectations so that employees know ahead of time what they’re getting into, particularly if they’re not local.
8. Inadequate training and support
Imagine starting a new job opportunity and the manager simply tells you, “Go for it!” No matter how confident the manager feels in launching an employee, the worker might experience it differently.
Stress, overwhelm, frustration, and burnout are all common feelings when there’s a lack of adequate training and on-the-job preparation. Without support, even top performers may lack the tools and resources they need to fulfill work responsibilities adequately.
Poor training also results in employees who feel undervalued and even unappreciated for the work they do—major turnover factors in the workplace. Always provide appropriate levels of onboarding, reinforcement, and personal development.
9. Personal reasons and life events
Regardless of how much employers do to keep the workplace inviting and motivational, there will always be external factors that cause employees to leave. In many cases, these circumstances are beyond the control of the employer and may even be positive for the employee in question. Situational life events might include:
- Birth or adoption of a child
- Relocation for personal reasons (e.g., caregiving for a family member; partner’s work)
- Return to school for a more advanced degree
- Personal lifestyle changes unrelated to professional performance
In these situations, an employer may not be able to intervene or change the mind of the employee, but support and encouragement are still essential. When employees (both present and former) move from one chapter to the next, be flexible. Provide recommendations or referrals, deliver on any parting benefits, and leave bridges open for future opportunities.
10. Health and wellness concerns
Modern employees have unique needs and interests, and they sometimes maintain an entirely different perception of workplace benefits than workers did many generations ago. Tapping into some of these expectations (when it’s realistic and feasible to do so) boosts employee retention and provides holistic support to top-performers.
A recent Gallup-Workhuman initiative calls attention to the wellness-turnover connection. Researchers discovered that the global cost of turnover and lost productivity amounts to $322 billion dollars annually “when low wellbeing shows up as employee burnout.”
Ask yourself—what makes sense for your team or business? Are you regularly checking in with employees to see which benefits (even non-traditional ones) would be most beneficial? If not, take some time to gather opinions and build out a long-term strategy for putting some of those perks on the table.
11. Missing diversity and inclusion initiatives
As more data emerges, a pattern is becoming clear—diversity and inclusion efforts could easily be directly tied to how confident workers are in their ability to advance internally within an organization. According to a CNBC workplace happiness survey, 42% of workers felt that their company was failing at diversity initiatives and that there was little room to move forward in their career at the company.
Wise leaders take note: diversity builds career confidence for workers across the board. To retain employees committed to growth and development, take inclusion initiatives seriously.
12. Disorganized restructuring or acquisition
Companies merge and join forces (or get acquired) all the time. But behind all the boardroom discussions and handshakes are real employees who crave job security, stability, and assurance. It’s up to responsible leaders to keep employees engaged and productive—and to avoid massive turnover in the wake of a business shakeup.
Deepa Sud, CEO at Plum Jobs, puts it this way:
“Business leaders set the tone for how well a restructuring will be received and executed. Company restructuring should be viewed as a fresh start as it can revitalize an organization and reinvigorate new and existing employees. Effective Planning, execution, communication and support are the main four factors which will determine whether your reorganization is a success or failure.”
Types of employee turnover
As we’ve mentioned, employee turnover is rarely one-size-fits-all. Individual circumstances dictate the decisions of employees and their respective managers. But in general, most turnover situations fit into two categories.
- Voluntary turnover – Departing from a job voluntarily is the personal decision of an employee. Works may receive a new job offer, accept a promotion, or transition out of the workforce for reasons unrelated to actual job performance.
- Involuntary turnover – Conversely, involuntary turnover is what happens when an employee is terminated unexpectedly. This happens when job performance falls below set standards or when a specific action goes against corporate policies that allow an individual to retain their role and benefits.
While both types contribute to the overall employee turnover rate at an organization, some companies publish metrics separately. Doing so allows employers to distinguish between factors that are within and outside of their direct control.
The costs of high employee turnover
It’s no secret that employee turnover is costly—both to HR departments and the organization as a whole. When employees leave, there are a number of extra expenses associated with filling those gaps. Unexpected costs include recruitment fees, travel expenses, salary band increases, and benefits-related charges.
Although the research numbers vary based on industry and level of role, recent data shows that employee turnover costs businesses up to 6 to 9 months of an existing employee’s salary. Executive-level turnover is even more vast, with costs up to 213% percent of what a previous executive earned annually.
Don’t forget, these totals include both soft and hard costs (when you can assign specific dollar amounts and when you can’t). Just because an organization can’t quantify the amount of money lost doesn’t mean that the hit isn’t significant.
Strategies to reduce employee turnover
Reducing employee turnover in the workplace is a team effort, so get everyone involved in the effort. Encourage normal conversation about what’s working and what isn’t. It’s only through proactive transparency and honesty that you’ll succeed in relating to real people who want to show up daily and perform their best work.
Get started with simple strategies to reduce or mitigate employee turnover where you are.
- Measure insights. We know—it might sound strange to talk about numbers and metrics when you’re prioritizing individuals, but many measurements indicate real experiences. Pick an employee engagement platform like Erudit that delivers a daily pulse check on employee experience, burnout, and engagement.
- Create tangible value for employees. It’s hard to keep employees excited without offering real-life benefits that make their lives better. Compensation is only the tip of the iceberg when it comes to value. Promote things like personal growth, advancement, community, and good mental health, too.
- Stay competitive. In the digital job market, employees know where to look if they’re not happy. Keep tabs on your competitors, and explore how they recruit. Which benefits make new roles most attractive? Whether it’s a four-day workweek or bi-monthly team happy hours, implement a few benefits that place your organization at the top of the pack.
- Intervene early. It’s normal (and even expected) to see some turnover or spot red flags. After all, it’s not realistic to think that every opportunity is the perfect fit for each person. But when it’s in your power to do so, intervene and instill positivity early on. Even if an employee decides to depart, the manner in which they leave impacts your culture and even influences future job recommendations.
Stay one step ahead
As you can see, the reasons for employee turnover are complex and personal. There’s no single factor that forces employees out the door, but experiences differ based on the amount of support that workers stand to gain in the workplace.
Innovative employers can (and must) counter feelings of doubt and disengagement with solutions like Erudit, AI-powered people software. Staying one step ahead counters negative sentiments that lead to regular turnover while helping you develop people-first strategies that build trust and longevity.
Make your employee-driven efforts count. Try Erudit free.