By Lindsey Zajac ,
Principal of Ahern, Murphy & Associates
Why Are Employees Leaving?
Employee retention has taken on a whole new meaning amid one of the tightest labor markets in the past 50 years. In January 2019, the unemployment rate stood at 4 percent. An estimated 41 million people voluntarily quit their jobs in 2018, up 8 percent from 2017, according to the Work Institute, a Franklin, Tennessee based consulting firm. By 2020 that number will jump to 47 million, or roughly 1 in 3 workers, the firm predicts. This means that more U.S. workers are quitting their jobs than at any time since the numbers have been recorded.
So why are employees leaving? According to the Retention Report, the top specific reasons for employees to leave jobs in 2017 were career development (22.2 percent), work-life balance (12 percent), and manager behavior (11.3 percent). If you compare this data across other studies, the findings hold true. In a Mercer study, promotion opportunities and career changes were given as two of the top reasons most workers (especially members of Generation X and Millennials) quit their jobs. The Work Institute found that career development, work-life balance and bad managers are consistently the top issues that push employees to job hop, with compensation cited in only 9% of exit interviews.
Reason 1: Career Development
Despite popular opinion, the number one reason employees leave their job is not for better pay and benefits. It is for career growth and development. What this means is that employees are frustrated with the lack of growth, development opportunities and advancement in their jobs. I can attest to this because I did this a handful of times when I was growing my career. It was never about the money, and always about the opportunity. I either hit a ceiling at the current company I was with or it simply wasn’t big enough with enough people moving through roles to allow for upward mobility. Each time I left an employer it was for a promotion which required more responsibility, more hours and more work. While those promotions naturally came with higher pay, that was not the catalyst that made me leave an otherwise good organization with a great culture and boss. In my 15 years of HR experience, I can tell you that this problem arises when an employee doesn’t see a clear career path to get them from the role they are in today to a future role in the organization so they decide they need to go elsewhere to develop their career. Often times this decision is made without any discussion with their manager or HR to validate if their thought process is even accurate.
Employers of all sizes need to make career discussions with their employees a priority. What this means is the generic “so tell me about your career goals?” discussion at the end of an annual performance review doesn’t cut it, especially for Millennials. At a minimum twice a year, but as often as quarterly, I recommend that you have check-ins with your employees. Ask them how they are doing, what they are working on and if they need any help from you. Then ask them about the direction that they would like to take their career. This career discussion should be a stand-alone discussion and not coupled with a coaching or performance discussion.
During these discussions, some employees may know exactly what they want to do. For example, I want to be on the management track and promoted into a management position within 18 months. Others may not know exactly so this is where you can step in and play an integral role in educating them about the potential opportunities in your organization. Even if these roles don’t exist today, as a leader in your organization, you can forecast out 24 months to get an idea of what positions and opportunities may become available. Ask them what roles look appealing to them? Do they have any desire to lead a team in the future? Do they want to become a subject matter expert in their field? Even if their end goal is to one day open their own business or change careers altogether, by you asking them what their career goals are and how you can help them get there, you are showing how invested you are in them. You are also demonstrating to them that while this organization may not be their forever job, they have the opportunity to learn valuable skills and they have a manager that is invested in their professional growth which will only help them in the long run.
Maybe you are a small organization without tons of upward mobility, that’s ok. You can still have the career discussions and you can still invest in the development of your employees. In role or in level promotions can occur when an employee is given slightly more responsibility or scope. You can include this person on special projects or ask them to shadow you when you meet with clients. Taking them under your wing and exposing them to people and situations they normally wouldn’t be a part of, are all part of developing their career. Mentor matching, external training or coaching may also be an option. Regardless of what you do, you have to do something. In today’s job market with career development being the number one reason employees leave, investing in professional development and training for your employees is not a luxury, it is a necessity.
Reason 2: Work-life balance
Now more than ever, employees are valuing work-life balance which includes scheduling preferences. This is incredibly important to Millennials who often choose a flexible work schedule or less hours over fancy titles and more money. But Millennials aren’t the only ones. Working parents value their time away from work as well. All employees value an employer that is sensitive and understanding to their personal issues. It is nice to not have to remind your boss constantly that you need to pick your kids up at daycare by 5:30pm or you are charged a late fee. Or you have to work from home because your kid is sick and daycare is no longer an option. Generation X and Baby Boomers may find themselves in a situation where they have to care for an elderly parent or a spouse which requires that they have the ability to work flexibly. Granted there are now laws in place like paid family leave that can help in some of these situations, but the real need for work-life balance extends beyond that. No one wants to be a slave to their job or feel like they have to be connected 24/7. Even if they have done this for some time without complaining, there will come a time when they burn out and decide to leave.
Flexible work schedules meaning more fluid start and end times are one option. The whole premise of “office hours” was put into place during an era when how much time you spent in the office was directly correlated to how valuable you were to the organization. Time and money were some of the most important factors that employers valued. This paradigm has shifted to one where employers also value company growth, corporate culture, employee engagement, health & wellness, retention, relationship building and leadership. If how much time someone is spending in the office is no longer a barometer for how good or productive they are at their job, then concepts like working remotely or flexible hours don’t seem so scary.
Unfortunately, not all organizations have the ability to do this. Some industries like Manufacturing, Consumer Goods, Retail and Healthcare require set schedules and around the clock shifts. It is no surprise that these industries also have some of the highest turnover rates. But even in these industries, there may be management roles or positions where you can offer more flexibility or allow employees to modify their hours or work from home when necessary. By doing so, you are sending a message to the organization at large that you value your employees, you care about their well-being, you are aware that they have priorities outside of work, and when possible, you will work with them to provide better work-life balance.
Reason 3: Manager behavior
All employees want a positive and productive relationship with their manager. An employee’s manager is probably the most important person that they develop a relationship with in the entire organization. It can truly make or break their experience. It doesn’t matter if other managers are awesome or if their manager’s boss is an incredible leader because their day to day is most directly impacted by their manager’s behavior.
I have an immediate family member who is smart, talented, hard working and incredibly good at her job. She has worked for her employer for over 3 years, likes the company and genuinely likes the work that she does, but she is actively interviewing because of her manager’s behavior. He lacks the leadership skills and abilities to motivate and influence his team. It is both demoralizing and exhausting to work for someone who doesn’t listen to you, doesn’t take your concerns into consideration, only criticizes you and has little to no emotional intelligence. The nail on the coffin was probably when she had a baby 8 months ago and her boss did nothing to acknowledge the birth of her child. This is just one of countless examples of people who make up their minds to leave an otherwise great company and job solely because of their manager’s behavior.
Organizations need to have a reliable checks and balances to get honest feedback from the employees. In the situation above, this manager is effective at getting results and is good at what he does in the eyes of his boss and senior leadership because they are not dialed in to the way he interacts with his team. They don’t know his lack of consideration for others, how he puts others down and his overall lack of leadership. While I believe employees should be able to go to HR and report this kind of behavior, I am also aware that not everyone feels comfortable doing so and often times company politics or ineffective HR departments demotivate employees from doing so. That is why a strong leadership team that values employee feedback and seeks it out regularly through focus groups, anonymous employee engagement surveys, 360 Reviews and exit interviews are more likely to catch poor management behavior before it results in a serious turnover problem.
In closing, Danny Nelms, the President of the Work Institute, urges employers to take steps to understand the needs, preferences and goals of their employees, focusing closely on new hires. Employee feedback should be solicited, and onboarding and other training should be evaluated to better understand where employers are not meeting the expectations of newly hired employees. With less than one third of organizations having a codified onboarding plan, this is a huge opportunity for most.
HR and Senior leaders also play a strategic role by improving work flexibility, career pathing and learning opportunities. A well-defined career path with guidance on how to achieve goals is something employees want and look for in a company. If an organization isn’t willing to invest in their employees, how can they expect their employees to invest in them? Learning and development opportunities demonstrate that your organization values continuous learning, but it also shows that you want your employees to be on top of industry changes and trends. From coaching sessions, training programs, lunch and learns and more, it’s crucial to an organization’s retention efforts to be providing these opportunities on a consistent basis.
Jo Danehl, a retention expert and global practice leader with Crown World Mobility, an international management consulting firm says that all thriving company cultures boast two attributes—effective leadership and opportunity. “Retention will suffer if these two qualities are not positive, present and evident in the workplace.”
About the Author:
Lindsey A. Zajac is an experienced, Human Resources professional with a demonstrated history of excelling in fast-paced organizations including PepsiCo, Eaton Corporation, Saab Sensis and Next Jump. Training and Development, Talent Management, Employee Relations, Recruiting, and Succession Planning are Lindsey’s areas of expertise. Most recently, Lindsey was employed with PepsiCo as a Senior Human Resources Manager in Buffalo, NY supporting the largest market in the country. In this role, Lindsey was responsible for providing Human Resources support for 1,100 union & non-union frontline associates and managers across nine Upstate NY locations. Lindsey served as a Strategic Business Partner with the PepsiCo Upstate NY Leadership team.
In 2018, Lindsey was recruited to join Ahern, Murphy & Associates, where she is able to leverage her passion for leadership development and coaching to help organizations develop and retain their employees while improving their overall performance. Lindsey is an advanced certified leadership coach and an authorized Everything DiSC partner.
For more information, please contact Lindsey Zajac.
Phone: (315) 382-8888