Three Reasons Employees Are Leaving Their Jobs and Three Strategies to Improve Employee Retention

6 min read
April 15, 2022

People with puzzle pieces. The building blocks of a strong team include a focus on retention and employee motivation. Employee retention is a major challenge for companies right now across industries. And the talent shortage makes losing employees even more problematic. Let’s take a deeper look at the issue of employee retention and explore three common issues and their solutions. These strategies can help you manage employee retention and encourage employees to become even more engaged at work.

Why Employee Retention Is More Important Than Ever

Retaining employees has always been a worthy goal, but for companies in today’s talent landscape, it is becoming increasingly critical and increasingly challenging.

We’re in the middle of the ‘Great Resignation.’

We’re living in what’s been deemed “the Great Resignation” or even “the Big Quit.” Voluntary turnover trends have been influenced by the pandemic, but they’ve been on the rise for a while, and the trend is continuing.

From 2010 to 2020, there was an astounding 88 percent increase in turnover, according to Work Institute's 2020 Retention Report. The pandemic shook up many aspects of our economy and caused the turnover trend to spike even more. 2021 now holds the record for the highest average number of employees who quit monthly at more than 3.98 million.

There is a talent shortage.

It’s clear that retaining employees at this time is no easy task, but employers must concentrate on retaining employees more now than ever. In addition to retention struggles, companies are also dealing with a talent shortage that is at a 15-year high. That means filling those vacant roles left by employees who quit can be a major challenge. 

Improving retention is the best way to avoid talent shortages and improve your company in the process. Recruiting is often just a bandage to cover up a problem you should look internally to solve. If your employees are leaving, there’s a reason, and it’s time to change that so they’re motivated to stay and contribute to your company’s success.

→ Dive deeper: Download our Ultimate Guide to Combating Talent Shortages for actionable strategies to improve employee retention and decrease employee turnover. 

The Cost of Poor Employee Retention

If you have a problem with employee retention, you may think because this problem is so common, it’s not worth worrying about. Unfortunately, the data says otherwise. Poor employee retention rates can deal a blow to your business in several key ways, including:

  • Hiring costs: When you lose an employee and need to backfill that role, you can expect to spend anywhere from one-half to two times the employee's annual salary just making that replacement. 
  • Disruptions to the team: Especially if many employees are leaving your company, the remaining ones may feel uneasy about the direction the company is headed. It can also take a long time for existing employees to form strong working relationships with new employees.
  • Lapse in productivity: Losing an employee can also leave a gap in productivity until you can hire a replacement. Even after hiring someone, research shows it can take up to eight months for that new hire to become fully productive. 
  • Compromised customer relationships: Losing an employee in a customer-facing role can also hurt your company’s relationship with the customer(s) the employee interacted with. Especially if clients enjoyed a good relationship with the previous employee, they may be perturbed by a change.

The benefits of improving your employee retention come down to avoiding these problems and, on the flip side, enjoying lower costs, a productive and close team, and strong customer relationships.

Why Employees Are Leaving Their Jobs

In order to understand how to improve employee retention, we have to understand why employees are leaving their jobs in the first place. There are infinite reasons why employees may choose to leave, and for many employees, it comes down to a combination of factors. 

However, we do know some of the top reasons that influence these decisions, and it’s not all about compensation and benefits. Let’s take a look at three major issues that can cause employees to leave their positions.

1. They don’t like the culture.

For many employees, leaving their job comes down to general dissatisfaction with the company culture. A toxic corporate culture is 10.4 times more influential than compensation in predicting a company’s attrition rate! In other words, if employees don’t like your company culture, you can expect them to walk away. 

2. They feel disengaged.

Another reason employees may start applying for jobs elsewhere is because they feel disengaged in their current job. Gallup research provides some insight into what can cause these feelings of disengagement. Low engagement occurs when employees feel they “aren’t growing, appreciated, or treated with care and respect.”

3. They don’t see opportunities for advancement.

The Pew Research Center found that 63 percent of workers who quit their jobs in 2021 cited “no opportunities for advancement” as a deciding factor. Most employees don’t want to feel stuck in the same role or at the same level with no change in sight, so if they don’t think they’re likely to advance their careers at your company, they’ll look elsewhere.

How to Improve Employee Retention

Now that we understand why employees leave, let’s look at three solid strategies for how to improve employee retention and proactively combat these issues.

1. Promote a culture employees want to be part of.

First, make sure your company culture is healthy and is an aspect of employees’ jobs that encourages them to stay instead of leave.

If you’re not sure how employees perceive your corporate culture, then ask them. One survey found that many employees feel unheard when it comes to offering feedback to improve the workplace, which can further contribute to resignations, so it’s critical that you make employees feel heard and act on what you learn to make improvements.

Keep in mind that employees are increasingly looking for their workplaces to feel more humanitarian, so a culture that values things such as a healthy work-life balance and diversity and inclusion is sure to encourage retention and help you attract new employees as well.

2. Support your employees’ professional growth and success.

Another key employee retention strategy involves boosting engagement. If you want your employees to feel engaged, you need to show them you’re invested in their growth and success. 

One great way to do that is to offer frequent 360-degree feedback. Employees want to know their manager, especially, is paying attention to how they’re doing. Positive feedback shows employees that their hard work is recognized and appreciated, and constructive feedback shows them their manager is invested in their ongoing growth and success. 

Managers and employees should also work together to set goals to guide the employee’s professional journey. Developmental reviews are a good place to start to identify areas for growth and help employees achieve a higher level of performance.

3. Provide a clear path to career advancement.

Employees need to see a bright future at your company in order to stay. Even a new employee who is ineligible for a promotion may feel discouraged if they look around and see other employees who have been in the same role for years on end.

If your company doesn’t have a formal process in place for employee promotions, it’s time to create one. A consistent and clear path to employee promotions shows employees they have a realistic chance of advancing to another role if they meet the necessary qualifications. 

It’s also wise to use succession planning in order to have a better grasp on your talent pool and which employees are primed to take on greater responsibilities in the company. You can start proactively helping to prepare these employees for their future roles. Succession planning can also help you assess retention risk so you make informed talent decisions and avoid being blindsided by resignations. 

Meet Challenges Head-On with the Right People Management Strategies

Retaining employees and fighting talent shortages is no easy task, but it is doable. And the good news is that the steps you take to fight these problems will help you improve the way you manage talent and will lead to happier, more engaged employees. What company doesn’t want that? 

Ready to fight high employee attrition and improve employee retention rates? Our Ultimate Guide to Combating Talent Shortages explores strategies to help you do just that. Download it today!

Ultimate Guide to Combating Talent Shortages with eBook cover - Download

Get Email Notifications