Did you know that replacing an employee could cost you up to three times that employee's annual salary? That's according to isquare.com. Recent studies cite productivity, recruitment, and training costs associated with hiring new employees as major contributors to this surprisingly expensive statistic. More importantly, employees take knowledge, experience, and contacts with them to their next company, often a direct competitor, as most people tend to stay in the same or similar field.
And while many companies are implementing retention programs to recognize and limit the cost of employee turnover, research reveals that few companies truly understand why employees leave in the first place. According to Leigh Branham, author of The Seven Hidden Reasons Employees Leave, 90% are directly linked, not simply to money issues, but to issues involving their job, manager, culture, or work environment.
The following are a few of the top reasons why people quit their jobs, according to research from the Harvard Business Review, HR Magazine, and other recent studies. Use it as a guide to recognize signs of unhappy employees and to cut down on the major expense associated with employee turnover:
1) Stress: Departing employees reported that stress from overwork or a work-life imbalance is a big reason for calling it quits. They might smile through it all, but if employees are consistently working late, working through lunch or on weekends, you may have a stressed out employee on your hands. Combine this with a personal crisis at home, and the pressure can be overwhelming.
2) Unrecognized: Many employees quit their jobs because they perceive, whether it's real or not, that their work is unappreciated. Causes include being paid the same as or less than poor performers or new employees with less experience; hiring or promoting outsiders instead of from within the company; and even an inkling of favoritism could create tensions that drive some employees to quit.
3) Money: Many employees don't just quit, they move on to what they perceive as a better opportunity - which may or may not be true. Either way, you can lose great employees who do not see advancement opportunities within your company. By knowing your employees' career goals, you may find that the best path for long-term growth is in another area of your company.
4) Motivation: People don't quit jobs, right? They quit managers. You've heard it before. Well, it turns out that it's actually true. According to studies, employees seek feedback, not just criticism. They want coaching and direction, assistance and communication. When they don't get it, they leave. Think about it this way: Have you ever sat down with an employee and asked what motivates him or her? Do you know why they come to work every day? These are much easier questions to ask than, "Why are you quitting?"
5) Company Culture: Former employees often describe their previous job as a "bad fit," a code word for a number of problems that are often difficult to recognize until it's too late. Studies suggest that by establishing clear job descriptions and utilizing personality assessment tools (such as DiSC® profiling), you can better match an employee's specific skills and talents to his or her job.
If you'd like more information about DiSC® profiling or would like to discuss more about this fascinating topic, give me a call. I'm always looking for ways we can improve our businesses together and be more successful.