8 Reasons Why Job Turnover Rates Are So High
Some companies seem to have no problem keeping talent employed, so why do other companies seem to struggle? Chances are, the company which has a low level of retainment is likely doing something to scare off their employees. Read on to learn more about employee retention and the top reasons why employees choose to leave certain jobs.
What is Employee Turnover?
Employee turnover is a measure of how often employees leave a position for voluntary reasons. It’s usually a collection of data that will span months or even years.
Because employee turnover only includes employees who left for voluntary reasons, it will not include any employees who were fired. Rather it is a number that embodies those employees who left for a new position, for personal reasons, or because they retired.
Whenever an employee separates themself from a company voluntarily, it’s important to find out why because some reasons for voluntary separation, such as retirement, are not a negative reflection on the company as a whole.
Is Employee Turnover Bad?
Obviously, you don’t want anyone who doesn’t like working for your company to stay there, but when too many people leave your job this can be bad for business. Studies have shown that a high turnover rate lowers both customer and employee satisfaction.
Not only that but recruiting new people costs money, especially in companies that want to acquire top talent. Training a new employee alone can cost over $1,000 USD and that is no small sum, especially if the employee ends up leaving a few months later.
For these reasons, all companies should do their best to lower their employee turnover rate. The only way to do that is to find out why employees are leaving in the first place.
8 Reasons for High Job Turnover Rates
There are many reasons an employee may be leaving your company, and maybe a combination of reasons is what is causing them to quit. Below are some of the most common reasons employees separate themselves from a company.
1. You’re Hiring the Wrong People
This first reason is one of the most common reasons people leave a job. If you are hiring someone for a position, you need to ensure their vision of the position matches yours before you hire them.
For example, one interview question you should ask is how long they see themselves staying with the company. If they say something like “I see this as a stepping stone” or “I’d like to eventually ______.” These are signs that the employee will not be staying in the position for long.
If the employee doesn’t see room for themselves to grow in your position from the start, they won’t, it’s as simple as that.
Also, keep in mind that entry-level employees are hard to retain in general. No matter what you do, when you have an entry-level position in your company, an employee is likely to feel they have outgrown it at some point.
Instead of hiring an employee just to fill a position now, hire an employee that you can picture growing within your company. This way when they outgrow the entry-level position you start them in, you will be able to integrate them into other aspects of the company.
After hiring the wrong people, the next most common reason employees leave a job is due to wages. While it can be difficult to solve this reason, know that offering competitive raises, bonuses, and pay across the board will help with your overall retention.
When employees are making enough money to cover their costs, they are much less likely to seek out a different position. Plus, when you offer regular (such as annual) raises, an employee is likely to feel valued and desire to stay as they continually make more money with each passing year.
Even if your industry uses a lot of entry-level employees, even just paying a little more than the competition can keep employees happy. You should also offer paid incentives for things like high sales, good attendance, and bonuses for taking additional trainings as these will help employees in even the most mundane positions have a goal to work towards.
It’s also beneficial, even if you can’t offer raises to every employee each year to have a fund for employee emergencies. For example, if an employee has an expensive hospital stay, you can pull from the fund as a gift to them. This alone can help retain employees who would normally stay in the position but had to leave due to a one-off financial issue.
3. More Benefits
Gone are the days when offering more benefits meant you had to have a more attractive health insurance package. In 2022, more and more companies are offering non-monetary benefits that attract potential employees more than a high salary.
These benefits can include working from home, a flexible schedule, paid days off, or even covering the initial cost of a home office. No matter what company you work for, chances are you can implement a few of these benefits to attract potential employees.
For example, even if there is no way to work from home for the position you are hiring for, consider adding 4 paid days off a year (usually called personal days) to allow the employee to attend medical appointments or other family functions. At a minimum wage position, these aren’t worth a whole lot of money but they can mean a lot to an employee when it comes to balancing their work and personal life.
4. Problems with Management
Next comes the big one, poor management. When an employee leaves a company as a result of poor management, it’s worthwhile to ask what they found was so poor because management issues can present themselves in several different ways.
First of all, there could be some sexual harassment you aren’t aware of which can be a big problem legally if you don’t sort it out. Second, many people are unwilling to stay in positions where they feel they are micromanaged or aren’t given the tools needed to properly complete the job.
The good news is, if this is your main employee retainment issue, it is typically easier to fix than the three mentioned previously, as it usually only requires more training (for the manager) or the hiring of a new manager. You can also hire a third-party consultant to help you solve managerial issues.
5. Employees Feel They Don’t Matter
You’ve likely heard the saying that is pasted all over the internet about how a job wouldn’t miss you if you died. Even though this might be the truth, showing an employee they matter goes a long way toward retaining them.
Employee appreciation looks different for every company, and there are several things you can use at your disposal. You can do simple things like buy lunch for your employees every now and then, to offer bonuses and verbal feedback.
It’s also worthwhile to consider allowing employees to fill out an anonymous survey about their feelings on the job. If lots of employees feel mad or angry about the tame things, if you work to fix those things the employees will feel as if they are heard and important.
You also should keep a small budget on hand for gestures when life events happen. For example, if an employee has a baby, purchase a baby shower gift. Or, if an employee has a parent or spouse die, use the budget to purchase flowers. A little gesture like this can make an employee feel appreciated by their job in a time of crisis.
6. Generational Differences
Once upon a time, it was the American Dream to get a good job and stick with it for 40 odd years until retirement. That is no longer the case.
Millennials and other young professionals are now finding that they prefer to switch careers here and there. It may not seem like a big deal, but even if a millennial only switches jobs every decade this is still very detrimental to a company that previously had a low turnover rate.
Plus, the baby boomers, who are now almost completely retired, are exiting the job market just as these younger employees are creating their first career switch, damaging your job turnover rates.
Professionals aren’t quite sure why this trend is happening, other than the fact that instant gratification is more important now than ever. Keep this in mind and consider restructuring job benefits so they appeal to the younger generation.
7. It’s the Era of the Side Gig
Thanks to the internet, more employees now than ever before have a side gig that they use to make money during non-work hours. This could be owning an Airbnb, driving for Uber, or perhaps selling crafts on Etsy.
Although many of these employees still need their full-time job to make ends meet, they are much less dependent on their full-time job than in decades prior. Whereas in the 70s a person couldn’t leave their current job until they had another, now if someone gets upset enough they will quit and live on their side gig for a bit until they find a new position.
Unfortunately, this has made the job market more of an employee’s market. Your company will have to work harder than ever to keep people interested in their jobs.
8. People Care About their Impact and Values
In the mid-1900s, an individual would take any job that paid them a decent wage. Now, however, the younger generation is less likely to work for a company they feel doesn’t match their own values.
An example of this is Chic-Fil-a which is an openly anti-gay company. As a result, many teens who identify as LGBTQ will not seek out a job at this establishment or may quit if their political feelings begin to change.
If possible, it’s best to keep your company away from politics so issues like this won’t arise, if there is no choice, however, know that it will be hard to solve a high employee turnover rate if your company is on a single side of a large political debate.
How to Remedy High Turnover Rates
The best way to remedy high turnover rates is to discover why an employee is leaving a company by conducting exit interviews. During these exit interviews, you should ask why the employee is leaving and ask them to be as specific as possible.
You can turn these exit interviews into stay interviews by offering to solve some of these problems. You can also improve the job for other employees by offering solutions to problems brought up in an exit interview.
If a previous employee mentions they are leaving to go to a fully remote job in the same field then this is a sign that your company too should evaluate whether some of your employees can work remotely. This is especially important as the millennials age and start to have problems finding affordable childcare.
Additionally, if an employee has another job offer, ask if they will share the specifics of why they chose that job offer. There’s a chance that your company could improve its future job offers by knowing what is attractive to the current workforce.
Not every employee that does an exit interview will be as forthcoming, but as long as you make an attempt, this can go a long way towards solving a high turnover rate.
Ready to Lower Your Turnover Rate?
Overall, there are hundreds of reasons that employees leave a position. While you can’t control all of these reasons, it’s important to try and discover why your employees are leaving.
Once you know the reason it is easier to come up with a solution, and not all solutions may be money driven so give them a chance!
Struggling to recruit people to fill the jobs left empty? Check out these tips for better recruitment marketing to help you to attract the best talent possible.