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6 Reasons Employees Leave a Company

Human Resources
Article
06/26/2014

While it's difficult to place an exact figure on the business expense of employee turnover, experts estimate that it can cost as much as twice an employee's salary to find and train a replacement. These costs — coupled with the damage done to workplace morale when colleagues quit — make it vital to understand why employees leave and how to retain them.

Employees choose to leave a position for a variety of reasons. Here are six major factors that may go into making this decision:

  1. Inadequate compensation – Depending on who you ask, the amount of an employee's wages may or may not be the most crucial factor in deciding to leave a company. Unless you've been diligent in conducting compensation studies for your organization, it's possible your hard-working employees aren't being paid up to industry standards. This can make them more motivated to seek employment elsewhere and also can invite your competitors to entice those A-players away.
  2. Not as expected or advertised – Many new hires leave their positions within the first six months because of unrealistic expectations or promises made about their position that go unfulfilled. This problem can be offset by scrupulously outlining what the new job entails (both its most attractive and more mundane aspects) ahead of time. The new hire's early days on the job is not a time for unpleasant surprises.
  3. No meaningful or satisfying work – Employees understand that their full-time job won't be a source of never-ending joy and gratification. However, you've hired an individual at least partly for their skills and talents, so if these go underutilized, boredom and frustration can quickly set in. Check in with your employees and, if necessary, consider giving them additional or more challenging tasks.
  4. A negative or unsafe workplace – Men and women who find themselves in an environment ruled by negativity or harassment won't stay any longer than they have to. An unsafe workplace will drive valuable employees away as well. People who willingly spend 40 hours or more a week in your place of business deserve to work in an atmosphere free of gossip, inappropriate behavior, harassment, and conditions that can risk their health and well-being.
  5. Lack of appreciation or recognition – Gestures of appreciation can be the easiest and most cost-effective way to retain your valued employees. A handwritten note of appreciation following a project (or its email equivalent) is always welcome, as is a gift card with a thank you note attached. If extraordinary work is being done, you may get a great deal of mileage out of publicly saluting an employee during an all-staff meeting or by taking them out to lunch at a restaurant of their choosing. Employees thrive in an environment where their efforts are recognized and appreciated.
  6. No opportunity for advancement – Not all employees are equally ambitious or interested in moving up the corporate ladder, but it's safe to say that all employees want to know the opportunity exists. If you've hired wisely, your employees would like to expand their range of abilities and knowledge while working for your business. They also value an employer who conscientiously seeks to promote from within.

Individuals quit their jobs for a host of reasons, but by paying attention to the most common factors behind this decision, you stand a much better chance of retaining the employees who can help your business grow and reducing the cost of employee turnover.

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.