8 Reasons Why Your Employees Are Leaving

When corporate leadership is strong, a business is invigorated; employees thrive in a culture of teamwork that promotes productivity and attracts new talent. Equally, momentum can switch directions if less capable executives are in place.

Under weaker leadership, systems slacken, work becomes sloppy and morale breaks down, eventually causing employees to look elsewhere for work.

Recruitment costs are high. Add onto this the potential losses of having talented employees go work for a competitor, and the case for understanding why people leave your company and retaining staff wherever possible is pretty convincing.

Of course, some of these staff will leave your company and it'll be out of your control. However, there are many common reasons why talented employees choose to work elsewhere that can be resolved.

High turnover hurts businesses

According to the Work Institute's 2019 Retention Report, more than a quarter of workers in the US (27%) voluntarily left their jobs in the previous year, and this is forecast to rise to 35% by 2023. This issue can be highly costly for businesses, both in terms of financial considerations and lost productivity.

Firstly, there are costs associated with recruiting and training a new hire, such as:

• Expenses for external recruiters if you choose to take this route
• The time and energy to source new talent directly within your HR team
• The time and money needed to onboard replacements

Indeed, according to research by the Center for American Progress, replacing a worker who earns less than $30,000 can cost up to 16% of their annual salary, while for more experienced and highly-skilled positions, this rises significantly.

For those earning between $30,000 and $50,000 per year, it’s estimated to cost about 20% of annual salary - or $8,000 for an individual earning $40,000 - while for executive positions, the costs increase exponentially. For instance, you can expect to spend around $213,000 to replace a CEO earning $100,000 per year.

Then there are costs related to the loss of productivity. When an employee leaves, they take with them years' worth of company and industry knowledge that can only be gained through experience. Even the most talented new hires will take months to get up to speed and become familiar with your firm's products, services and ways of working, and in some cases, it could be a year or more before they're working to their full potential.

Finally, you need to consider the effect high turnover has on the rest of your staff. If employees see friends and colleagues heading out of the door on a regular basis, this will damage morale and reduce people's opinions of the business. In turn, this can create a vicious circle as more employees feel demotivated and look to follow suit by searching for new opportunities elsewhere.

Therefore, you need to be able to recognize why you have high turnover rates and put plans in place to address these issues. Here are some of the most likely reasons why your employees are leaving, and what you can do about it:

The real reason employees employees leave: lack of direction

Most of the talented employees in your business are ambitious and that isn't all about getting the highest salary possible. People want to know that the company they work for has a clear vision and is making steps to achieve it. This covers a lot of your business model but it's important that you are making it a priority to communicate to employees about the direction you are heading in.

More than this, you need to be clear about the steps you are taking to achieve your overall vision as a business. You need employees to buy into your vision and help you work towards this, otherwise staff will eventually leave and their experience and skills go with them.

Not enough recognition or appreciation

If people feel as though you either don't value their abilities or aren't willing to put them to good use, they will find someone else to work for. This is a top reason why employees leave. No matter how high up - or low down - they are in the company, employees will want to feel that their role is helping the business progress in some way.

If executives fail to acknowledge the unique skills of individual workers, the company stands to shoot itself in the foot by disenfranchising employees that are waiting to fulfil their potential.

The strongest leaders leverage close relationships to discover what their workers have to offer so that the company can make the most of key skills.

Ultimately, companies stand to engage employees further, increase productivity and boost that all important bottom line when employees’ strengths are allowed to come to the fore.

Inadequate opportunities for development

Perhaps more important than this, when it comes to reasons why your employees are leaving, is ensuring that staff feel they are able to develop their skills. Often companies focus on those in management when it comes to progression, but everyone at different levels of the business will want to be able to improve their abilities.

Jim Clifton, CEO of analytics and advice company, Gallup, cites the provision of adequate opportunity for progression and professional development as the number one predictor for turnover. If individuals don’t feel like they are advancing their careers and enriching their professional lives, they may turn to alternative employers who are more able to give them the attention they deserve.

If opportunities to climb the corporate ladder only appear when employees retire, then a work environment can start to stagnate. In such circumstances, the drive for promotion becomes a long waiting game that few motivated workers will stand for.

Deprivation of autonomy and micro-managing

Autonomy and empowerment are not just things reserved for those in the highest positions at your company, but something that employees at every level can benefit from. Of course, some staff work at their best when they are closely managed by another person, but many professionals will blossom if you give them some level of autonomy.

Micro-management severely undermines development, hinders ownership and essentially says that you do not value the people you have in charge.

Refusing employees the independence that their job roles require prevents those staff members from exploring the parameters of their position and from being the best they can be. As such, fussy managers will never know how good employees really are at their jobs, and will cut themselves off from authentic feedback.

It should be noted that shoulder-prodding supervision has a positive role to play in certain short-term situations – training new employees, for instance, or giving underperforming staff more confidence. However, the practice is more readily associated with low employee morale and higher staff turnover.

If people feel as though they aren't given the freedom to be responsible for their own progression and development, as well as within their role, they are likely to look elsewhere.

Financial insecurity

Being paid is a fairly important thing for employees, and though it's not everything, it can be a key reason why employees leave. Underpaying your employees can be considered a sign that you aren't a sucessful business. If staff think the business is struggling financially, then you may find that staff start to leave at a rapid rate. This doesn't mean that you need to lie to employees and make out that your company is more stable than it is, after all every business goes through hard times at some point.

It's much more about how you approach these periods. Tell employees that you are having a rough time financially, but reassure them that there is a clear plan to resolve the problems and they will be kept in the loop. This will help them understand why things such as pay rises may be rejected, but let's them know that it's under control. Ignoring the issue will cause rumors to fly around like wildfire and people will leave out of fear.

Lack of proper communication

This is a seriously important issue on which business success hinges. It's not just one of the reasons why employees leave, but one which holds implications for the entire corporate hierarchy. Successful firms cherish the value of clear communication and amplify it through any number of channels so that messages are understood quickly by all parties concerned.

Positive knock-on effects include improved relationships, better defined goals and improved commitment. Similarly, these virtues disintegrate if communication is not cared for as a corporate priority.

Poor communication breaks employees into silos that struggle for direction, causing individuals’ morale to nose-dive.

Toxic corporate culture

Workplace culture is becoming much more important for employees at every level. If staff feel that you are constantly watching them, waiting for them to slip up, or that all you care about is your profit margin, they are going to leave for a business that values them or can pay them more.

To solve this, you need to look at what you offer employees aside from their wages. Do teams work well together? How is morale? Organize events to bring people together, and look at what benefits or perks they would value the most if you introduced them. Of course, this requires a level of financial backing but even researching it will show staff that you value them.

Failure to listen

A trait that engenders failure in many facets of life, executives that show no ability or willingness to open their ears – and eyes for that matter – risk ignoring valuable employee messages.

Way beyond a nod of the head or paying lip service, taking on board what others around you have to say requires authentic listening – the ability to truly understand the other person’s position, their context within the company and their perception from that position.

US management consultant and educator, Peter Drucker, famously said that communication is all about hearing what isn’t being said. Bearing this in mind, authentic listening relates to using questions, spending time and giving consideration to achieve true empathy with another party. It is a dynamic which must grow from the listener’s drive to help, so that another person can have the confidence to fully and clearly communicate their needs. 

The bottom line is that employee turnover costs time, money and industry reputation. As such, it is critical that executives put every effort into understanding the reasons why employees leave the company, then identify and eliminate any of the above issues from management styles.

Each of us has character traits that could be holding us back, impeding on our ability to lead and inspire. If leaders begin with looking inside in a way that promotes self-awareness, then areas to work on can be established.

This will enable those in charge to address crucial areas in a way that slowly develops a working culture that will encourage employees to stay engaged and committed to the companies they work for.