Identifying and addressing the causes of employee turnover is critical to effective business management. A high employee turnover rate can cause severe issues for organizations, including a disruption in workflow, decreased employee morale, and increased recruitment costs.
While some reasons for high employee turnover are to be expected (like lower-than-average pay or subpar benefits), the root cause often runs much deeper. Factors can range from poor leadership to a lack of growth opportunities, and they all might contribute to why workers have a bad employee experience, and the organization suffers from a high turnover rate.
If you’re hoping to address the causes of employee turnover in your company, keep reading. When you understand why people are leaving their jobs, it’s easier to implement employee retention strategies that will encourage them to stay.
The impact of employee turnover
The implications of employee turnover are significant, and they generally go much further than just needing to fill open positions. There are many repercussions to having a revolving door of staff. Results can include lost productivity, increased disruption, and diminished employee engagement.
- Impact on team morale: Beyond just financial loss and productivity decline, high turnover rates can deeply impact employee morale and employee productivity. There can be a psychological component when remaining employees suddenly need to pick up the slack and manage increased workloads — and job satisfaction can take a hit when additional responsibilities don’t translate to an increase in compensation.
- Disrupted workflow: When experienced team members leave an organization, workflow disruption often leads to knowledge gaps that are difficult to fill. Any new hire will likely need time to acclimate to company culture and job responsibilities before resuming former productivity levels.
- Increased recruitment costs: Each time a new hire is brought on board, it costs companies advertising fees that target new talent, administrative processing fees, orientation and training programs, and more.
There’s also a cost associated with reduced efficiency during transition periods between old and new employees.
Common reasons for employee turnover
To fully understand the reasons for employee turnover, it’s imperative to look at the underlying causes.
1. Lack of growth opportunities
Feeling stagnant in a position or career is a significant driver of turnover. Workers who don’t see career advancement or growth opportunities are more likely to look elsewhere.
Research shows that millennials in particular prioritize career development opportunities when they’re seeking new employment. In fact, one survey shows that 87% of millennials say professional growth is important in a job. To curb high turnover rates, focus on offering clear paths for advancement and continuous learning experiences that foster growth within an organization or role.
2. Inadequate compensation and benefits
According to Talkspace research, poor compensation is the number one cause of workplace stress and a top reason people are willing to leave a job. Pay reflects value, and if people don’t feel worthy in their role, they’re more likely to be ready to explore other opportunities.
Beyond adequate pay, a comprehensive benefits package should include competitive perks, like excellent health insurance and matching retirement plans.
3. Poor management and leadership
Incompetent management styles harm company morale and workplace motivation. Toxic leadership has been repeatedly identified as a major reason for a low retention rate. The importance of practical leadership skills cannot be overstated when we think about reducing turnover.
Make sure leadership in your organization has resources, support, and access to training in effective management styles.
4. Unhealthy work-life balance
Establishing and maintaining a positive work-life balance for employees is vital for overall well-being. People with excessive workloads who lack proper support can end up experiencing burnout, leading to an increase in voluntary turnover.
A Talkspace survey of more than 1400 workers across the country found that more than half (51%) are burned out — and almost half (44%) say they work long hours.
Ensuring manageable workloads and offering access to support is crucial in helping people find a healthy work-life balance — and when people are happy at work, they want to stay with their company. Plus, the company will be able to better prevent employee burnout.
5. Lack of recognition and appreciation
Gallup research found that only about 30% of employees feel they received recognition or praise for a job well done in the last week. When companies don’t acknowledge the efforts and accomplishments of team members, feelings of undervaluation can result in decreased motivation and employee productivity. Eventually, these feelings can lead to the search for new opportunities.
The good news is that recognizing accomplishments is one of the most straightforward and simple strategies organizations can implement to increase job satisfaction and reduce turnover.
6. Unengaging work environment
When the workplace is uninspiring or unengaging, it can push even the most motivated employee toward exploring other options. Engagement goes beyond physical working conditions — it encompasses company ethos and culture as well.
Wondering how to boost employee engagement and retention? Maintaining a stimulating and upbeat environment can positively impact productivity and employee retention rates, as engaged people are more willing to stay with an organization.
7. Mismatched job roles
Whenever there’s a mismatch between skill or interest and daily roles and responsibilities, it can lead to job dissatisfaction, which culminates in a higher willingness to seek better-suited roles or opportunities.
Thus, accurately representing the duties and expectations of a job during the recruitment process is crucial, especially if you’re actively trying to combat high staff turnover rates.
8. Limited flexibility
Inflexible workplace environments are becoming less tolerated by today’s workforce. Many workers now regard flexible arrangements or options as a requirement when assessing job opportunities.
A results-only work environment (ROWE) initiative lets employees decide when, where, and how they work — and some studies have found that ROWE can result in a 45% reduction in voluntary employee turnover.
9. Inadequate training and development
Jobseekers today are seeking career paths where professional development is tangible. While it generally starts with training, further opportunities for career development and internal advancement are important in keeping people engaged and loyal.
Resources dedicated to educational programs and training can be key in sending an indisputable signal that an organization is progressive and values the potential of its employees.
10. Toxic work environment
Hostile or toxic work environments, where conflict or harassment is tolerated or not addressed, can severely affect team morale, mental health, productivity, and an organization’s turnover rate.
Make sure toxicity is dealt with and offer training where necessary to ensure inclusion and positivity are prioritized in your company.
11. Lack of transparent communication
Poor communication from leadership can breed uncertainty about individual expectations and overall organizational goals. The result can be mistrust or resentment, contributing to increased turnover rates.
Open and transparent communication must be an organization-wide goal, from leadership down.
12. Boredom and monotony
A significant factor of why some employees are willing to part with their company is simple: they’re bored. Repetitive tasks, limited variation, and a lack of stimulation can quickly lead to disengagement, which may encourage people to consider quitting their jobs.
Providing a dynamic environment with consistent opportunities, in addition to routine tasks, is essential, especially for those employees with ambition who seek career advancement.
Retain your employees and keep them happy
Reducing your employee turnover rate is possible, but you must be willing to put in the effort to foster an engaging and supportive environment. The importance of employee retention is obvious: your people are your company’s most valuable asset. Investing in them and using the tips discussed here can significantly reduce the reasons for high employee turnover.
Offering mental health support, like Talkspace’s online therapy for employees, can be vital in creating a happier, mentally healthy workforce, with reduced turnover and high retention.
Learn more about how Talkspace for Business can help you reduce employee turnover today.
Sources:
- Rigoni, Amy Adkins and Brandon. “Millennials Want Jobs to Be Development Opportunities.” Gallup.com. Gallup, June 30, 2016. https://www.gallup.com/workplace/236438/millennials-jobs-development-opportunities.aspx. Accessed August 16, 2023.
- Dvorak, Annamarie Mann and Nate. “Employee Recognition: Low Cost, High Impact.” Gallup.com. Gallup, June 28, 2016. https://www.gallup.com/workplace/236441/employee-recognition-low-cost-high-impact.aspx. Accessed August 16, 2023.
- Stephen Miller, CEBS. “Study: Flexible Schedules Reduce Conflict, Lower Turnover.” SHRM. SHRM, April 13, 2011. https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/flexschedules.aspx. Accessed August 16, 2023.
- Penn State Extension. “A Toxic Workplace Can Fuel Employee Turnover,” December 12, 2022. https://extension.psu.edu/a-toxic-workplace-can-fuel-employee-turnover. Accessed August 16, 2023.