Top 7 Reasons Employees Leave, And How To Retain Them

By Author: peoplestrongca
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“A small leak can sink a great ship”.
Similarly, high turnover rates can bring an entire organization to its feet.
A report by the Bureau of Labor Statistics shows that in 2021, there were almost 800,000 more cases of employee turnover compared to 2020. This was termed The Great Resignation and plummeted productivity, work satisfaction, and employee morale.
Hiring the right people can take a lot of time and effort. So, it’s a bummer when employees resign, leaving a vital skill shortage.
However, there’s a silver lining! Even minute investments in retaining your talent can pay off in both tangible and intangible ways.
Read on to find out valuable strategies about how you can reduce employee turnover, and improve retention.
Table of Contents
1. Why should you track employee turnover?
2. Calculating employee turnover
3. Significance of employee turnover
4. 7 primary reasons for employee turnover
5. How to reduce employee turnover?

Why should you track employee turnover?
High employee turnover = Real problems. ...
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According to major insights in the US, employees leaving costs businesses a trillion dollars every year. Add to that the loss of productivity and morale in your team, and you have a real problem on your hands.
Monitoring employee turnover assists you in tracking your target objective - a desirable low turnover rate. Conversely, if you observe a high rate of employee turnover, you can anticipate the need to recruit more workers and plan for future recruitment expenses.
So, how do you measure employee turnover? Check out the example below.
Calculating employee turnover
We get it, math isn’t great. However, losing out on employees isn’t either.
So, let’s look at how you can calculate employee turnover rates.
Suppose, you employed 100 people on January 1st, and 50 people on December 31st. Between this period, 10 people left your company. With these figures, let’s calculate the employee turnover percentage.
• (100+50) ÷ 2 = 75 average employees
• (10 ÷ 75) x 100 = 13.33 % annual employee turnover
Now, you might be wondering what’s a good turnover rate.
The answer may differ based on the geographical location, sector, and specific job positions. Moreover, the rates can be influenced by the data collection methods and prevailing global conditions.
Significance of employee turnover
Money matters. And the main reason why employee turnover matters is because it’s expensive. According to a 2021 insight from the Society of Human Resource Management, the recruiting and onboarding process costs an average of $4,500.
However, rising costs solely aren’t only going to affect you. Have a look at other reasons why employee turnover matters.
• Decrease in productivity
When an employee leaves, the whole team suffers from a skill shortage. Moreover, the recruit might not reach the same levels of efficiency for some time.
• Unfavorable KPIs
You are losing good talents to competitors. The employee might divulge trade secrets or patent business techniques that you implemented.
• Loss in morale
Employees within an organization form emotional bonds with each other, over time. Thus, when an employee resigns, the morale of other employees gets affected. Sometimes, when a crucial member resigns, it can trigger a turnover cascade, which can also prompt other members to leave.
Thus, high employee turnover rates may disrupt your business in the long run.
So, what exactly leads to employee turnover? Let’s dive right in.
7 primary reasons for employee turnover
Highlight
Research has found that many employees spend a lot of time worrying about making mistakes at work. A survey of over 2,000 workers discovered that almost half of them work in fear of making mistakes.
These studies indicate that most people want to avoid making mistakes at work, but some workplaces create an environment where mistakes are punished, leading to fear and paralysis among employees.
1. Lack of progression and growth
No one likes having a dead-end job…
According to a market report, 87% of millennials feel the need to have suitable opportunities for career growth and development. Moreover, around 70% of professionals from other generations felt the same.
Ambitious professionals crave career progress and aim for professional development. Employees who feel like they have stopped learning and growing, feel bored, restless, and anxious. Thus, they are more likely to seek new and better opportunities elsewhere.
2. Inefficient management
“Employees don’t leave companies; they leave managers”.
A report from TINYpulse states that employees who feel their supervisors are incompetent and their performances are subpar, are more likely to leave. Poor management skills turn productive work environments redundant and hostile.
3. Uncomfortable work environment
Ambiance matters…
And it does all the more at your workplace, where you spend more than 50% of your total working hours. A comfortable workplace doesn’t only extend to your office desk and chair. From coworker competition and conflict to a lack of diversity and inclusion in the workplace, employees get stressed out and feel compelled to jump ship.
4. Inadequate compensation
A market study from Paychex states that around 70% of employees are more likely to resign due to low remunerations. Also, an article by Forbes notes that employees expect an annual paycheck increase of 3%. Thus, pay discrepancies and poor salary growth are major reasons for employee turnover.
5. Lack of flexibility
Flexibility is the key to stability.
If there’s one thing the pandemic taught us, it’s learning to be flexible. And this extends to every aspect of our lives. More and more employees are requesting flexible working hours, and the opportunity to work remotely. Thus, a rigid workplace can lead to resignations.
6. Lack of innovation
Most employees dream about making meaningful contributions to the world. They long to solve real-world problems, impact society positively, and ignite change. Bright and ambitious employees may feel stagnant when companies fail to innovate.
7. Burnout
A recent survey by Deloitte found that around 77% of employees experienced burnout at their present job. Moreover, over 42% of employees left for this reason. Younger generations seek sustainable work-life balance. When people feel they are overworked, they get overwhelmed.
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Did you know? A BBC report reveals that high-pressure work environments are detrimental to employees’ emotional and mental well-being.
So, how do you reduce employee turnover? Let’s look at some of the key strategies you can try implementing for your business.
How to reduce employee turnover?
Although employees may resign voluntarily, there might be cases where they are let go. This is known as involuntary turnover and might be necessary for a business to thrive and perform in the long run. However, the strategies listed below can help prevent or reduce voluntary turnover rates.
1. Get access to learning or professional development programs
Consider paying for development programs that provide training, courses, assessments, and also certifications to your employees. This increases employee satisfaction as they now have access to learning programs.
2. Offer flexible work schedules
Employees can benefit from flexible work options, especially those who are parents. Understanding the specific needs of your employees and adapting to them allows you to have an edge over your competitors when it comes to recruiting and retaining talents.
3. Carry out stay interviews
A stay interview is where HR professionals have a one-on-one meeting with their employees.
Critical factors can be discussed in stay interviews like company culture, employee experience, teammates, the role of managers, and much more. Stay interviews promote communication between management and team members.
4. Implement recognition programs

We all like to be recognized and appreciated for our efforts and hard work.
Employee recognition programs make employees feel rewarded for their dedication and also improve retention rates. Bonus checks, performance incentives, and employee of the month awards boost morale and harbor a rewarding work atmosphere.
Final thoughts
A study by the Society of Human Resource Management states that it takes an average of 42 days to replace an employee, and costs $4129. Thus, US and Canadian companies spend billions of dollars in hiring and training recruits.
When you can identify reasons for employee turnover, and take necessary steps to minimize it, you can extend the average tenure of employees. Less time and resources spent recruiting means you have more time and energy nurturing and furthering the company’s values.

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