• Startup
  • Payroll/Taxes
  • Human Resources
  • Employee Benefits
  • Business Insurance
  • Compliance
  • Marketing
  • Funding
  • Accounting
  • Management
  • Finance
  • Payment Processing
  • Taxes
  • Overtime
  • Outsourcing
  • Time & Attendance
  • Analytics
  • PEO
  • Outsourcing
  • HCM
  • Hiring
  • Onboarding
  • Recruiting
  • Retirement
  • Group Health
  • Individual Insurance
  • Health Care
  • Employment Law
  • Tax Reform

Employee Retention: Know Why Your Employees are Leaving

Human Resources

Successful employee retention begins with a comprehensive understanding of why people choose to leave a company. According to the Bureau of Labor and Statistics, in February 2016, nearly three million people quit their job; defined as, “voluntary separations initiated by the employee.” Rapid turnover is even higher in the retail and leisure industries. Small business owners who previously paid little attention to this trend should take notice as they head through 2016.

The effects of unwanted employee departures are well known—a drop in productivity, disruption in team dynamics, the additional costs involved in recruiting and hiring a replacement, etc. If this pattern is evident in your business, the first thing you can do is isolate the causes behind the departure and then correct the situation.

Here's a look at some primary reasons employees choose to leave a business and find work elsewhere:

A Lack of Feeling Appreciated

Perhaps the single greatest factor in making the decision to leave comes down to a feeling that the employee is not valued. This perception may arise from a lack of praise for doing a job well or being asked to perform duties in an unsafe work environment. Another common example involves being asked to "fill in" for an absent or underperforming employee during an especially busy time; the dedicated employee will likely feel stressed that his or her own job responsibilities aren't being attended to, and that the people in charge are failing to provide the support needed to get everything done.

Job Isn't as Expected

Whether due to issues related to the hiring process or a lack of useful information provided during orientation, many employees decide to leave because they misunderstood what their job entails or didn't grasp what was expected of them. Offering a realistic portrait of job expectations can help eliminate this as a cause for employee exodus.

Teller applicants at Wells-Fargo Bank, for example, are shown videos of irate and demanding customers, with hiring managers then providing guidance on how to cope with this situation. New employees understand this can happen on the job and may feel better when they're equipped to deal with it.

Not Getting Along with the Boss

If an employee can't get along with his or her manager, leaving the job behind often seems like the best solution. In fact, a 2015 Gallup survey of 7,200 adults noted that approximately half had quit their jobs "to get away from their manager."

If you determine that employees are leaving because of issues with their boss, it might mean the boss himself is the one who needs better training in interpersonal skills. Obviously, no one can predict exactly how a new hire will get along with the boss, but giving the two an opportunity to interact during the hiring process might be a good way to address this potential problem early on.

Inadequate Compensation

A poor salary or a compensation and benefits package markedly below the industry standard isn't the only reason an employee quits a job, but it can definitely be a factor. Lower salaries may attract prospective job candidates who may not be a good fit with your business. Plus, it's been shown that when an employee does quit for another position, they may see as much as a "10-20 percent increase in salary" at their next job. It may be unrealistic to think you can get away with paying your employees poorly and expect them to stick around.

Little Opportunity for Career Advancement

A good employee may be defined as someone who wants to learn and grow in their job. Businesses that fail to take this into account (and thus provide little opportunity for career advancement) could experience high turnover. An employee who feels "stuck" may start looking elsewhere for a position that promises they'll be able to put their talents and experience to better use.

Competitive pay, improved employee-manager relationships, and opportunities to grow are key elements in successful employee retention. Take action to retain your valued employees and the benefits could be felt by your entire organization.


Worried about payroll? HR? Compliance Issues? We can help.
This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.