10 Main Causes of Employee Turnover & How to Reduce Them

Here’s the good news: Excessive employee turnover is preventable. Taking steps to chip away at top
causes for your company can have a major impact. Here are some top contributors to people leaving.

1. Lack of employee purpose: “Workism,” the belief that work “is not only necessary to economic
production, but also the centerpiece of one’s identity and life’s purpose” is a real thing, especially for
college-educated professionals. Think about it—when we engage in small talk with new
acquaintances, “So, what do you do?” is a top conversation starter. No wonder then that high
performers consider it important to work for a company and in a role they can be proud of.

What that means varies, but LinkedIn’s Talent Trends Survey shows that companies with purposeful
missions saw 49% lower attrition. Companies with “purposeful missions” are exceptional at
motivating their employees, such that their people become extensions of the brand itself. These firms
have strong cultures, connect the dots as to how their product or service makes the world a better place
and “walk the walk” in supporting charitable causes and giving back to the community. Even
companies with low employee engagement can often retain talent if its people back its mission and
purpose—with employees drawing motivation from the importance of the work the business does.

2. Poor compensation: When people leave a company, compensation and benefits are a major reason,
especially for younger workers: The LinkedIn survey found that compensation and benefits as the No.
1 reason they change jobs.

Higher base pay has a strong impact on retention for a few reasons. First, paying people well is a
tangible way to show you value their contributions. And, it makes it less likely that a competitor
looking to poach top performers can lure them away with purely financial incentives. Glassdoor found
that workers earn on average 5.2% more when they change jobs. If your company pays toward the top
of the scale, you make headhunting a pricey proposition.

How can you ensure compensation is in line, or above, for the market and role? First, continue to
provide annual base pay increases. Monitor what other companies are paying on an annual basis, more
frequently for hard-to-fill jobs. Many organizations tie bonus pay to project completion—and paying
more for hot skills is a trend that continues to increase. Finally, implement talent management
processes that identify top performers, and correct pay imbalances by conducting a racial and gender
pay equity analysis. PayScale publishes an annual Compensation Best Practices report that can provide
good guidance.
3. Being overworked: Burnout happens when employees are asked to perform tasks without being
given the resources to succeed, when they feel a lack of control or when they consistently face more
daily stress than is manageable. Burnout combines emotional and physical exhaustion with a sense of
hopelessness and self-blame and can manifest in behavioral and physical issues.

Ask: Do we regularly ask or expect employees to work on the weekends or after hours? Is a “normal”
workweek 50 hours or more, on average? Do we provide the appropriate technologies and other
resources for people to succeed?

Reducing burnout involves looking at six factors, a University of California study found: Demand
overload, lack of control, insufficient reward, socially toxic workplaces, lack of fairness and value
conflicts. Imbalances in any of those areas will put people at more risk for experiencing burnout. HR
teams and managers should ask employees for feedback on their workloads—and actually listen, make
changes as needed and commit to properly resourcing their people.

4. Bad managers: Plenty has been written about toxic managers—people who take credit for others’
ideas, play favorites, even abuse their reports. And companies definitely need to weed these people
out. However, less obvious are managers who are simply bad at their jobs.

Many of the top reasons for turnover—poor compensation or work-life balance, little training and
scant career advancement opportunities—hinge on the manager, so HR teams need to identify
supervisors who flat out lack the competence to manage people and either transition them to new roles
or provide support and training.

Good managers see themselves as career developers; they know their employees well enough to
uncover their skills and motivations. Harvard Business Review research by Marcus Buckingham,
who surveyed 80,000 managers and devoted two years studying a few top performers, found one
quality that sets managers apart: “They discover what is unique about each person and then capitalize
on it. Average managers play checkers, while great managers play chess. Great managers know and
value the unique abilities and even the eccentricities of their employees, and they learn how best to
integrate them into a coordinated plan of attack.”

5. Little to no feedback or recognition: Many employees report not getting the right kind of manager
feedback: A Gallup survey shows workers whose managers’ feedback left them with positive feelings
are about four times more likely to be engaged, and only 3.6% are actively looking for new jobs.

Feedback doesn’t always need to be praise, but aim to frame comments in a positive light. Managers
should start with wins, focus on specifics, pair encouragement with constructive advice on how to
improve weaknesses and have frequent conversations and check-ins.
What’s more, feedback and recognition don’t need to come only from the manager to make a big
impact. Peer-to-peer recognition programs are successful, particularly when they leverage technology.
For instance, at Fisher Unitech, digitizing a manual kudos program gave the company the ability to
automate employee recognition, making it more visible and seamless, and in the process, doubling
participation rates. The company now chooses an employee of the month based on kudos.

Oh, and the only thing worse than bad feedback is no feedback, such that employees lack guidance or
how to develop their skills or are blindsided by a negative review.

6. Poor work/life balance: Work/life balance sits solidly in the Top 3 reasons people leave
companies, across studies. Besides avoiding the aforementioned issue of overwork, organizations
should aim for scheduling flexibility that allows people to be as productive as possible. Bureau of
Labor Statistics data from 2019 shows that about 25% of wage and salaried workers were able to work
from home at least occasionally, and 57% had flexible schedules in which they could vary the times
they started and stopped working. The WFH trend accelerated in 2020, and that’s good news for
people who once had long, draining commutes.

When it’s impossible to allow flexibility in start and stop times, as with shift workers, the next best
thing is issuing schedules as far in advance, and being as open to swaps, as possible. Companies
with strong workforce management capabilities use technology to optimize scheduling, automate time-
off requests and manage absences and often see improvements in employee work/life balance scores.

7. Boredom: It’s a classic scene in “Office Space:” Ron Livingstone, in answering a consultant’s
question on how he spends his workday, says, “Yeah, I just stare at my desk, but it looks like I’m
working. I do that for probably another hour after lunch, too. I’d say in a given week I probably only
do about fifteen minutes of real, actual, work.”

Of all generations, the LinkedIn Talent Trends survey found that Generation X is most likely to leave
an organization because of a lack of challenging work that keeps them engaged and, well, awake.
Again, the manager plays a huge role here. Managers should encourage their teams to meet existing
goals but also assign challenging projects. Push employees out of their comfort zones, and foster a
“growth mindset” in team members that values skills development and encourages taking calculated
risks. A culture that can accept failure is a key part of this process.

8. No opportunity for growth or development: Another factor solidly in the Top 3 reasons people
leave jobs is that they don’t see a future for themselves in the company. In fact, consultancy PWC’s
Future of Recruiting report found that U.S. job seekers are willing to forgo up to 12% of their salaries
for development opportunities, including more training.
A culture of employee development is a key part of talent management. Go beyond skills-based
training to offer continuing education and tuition reimbursement, career development services and
coaching, mentoring and leadership development programs. Think outside the box on what training
looks like as well.

To evaluate your company’s program, ask yourself:

 Is there a clear path for career growth and advancement? Does senior leadership fully buy in to
our employee development strategy?
 Do we have formal learning and development programs in place? If not internally, are we able
to provide access to third-party opportunities that will help employees gain new skills?
 Do we have defined programs to mentor employees, and is there flexibility for employees to
explore different departments and functions?
 Do we align our business goals with employee career goals?
9. Bad hiring procedures: When short-term retention rates are low, look for problems in your hiring
and onboarding processes.

You have a short-term retention problem when people leave within the first six months, especially to
take on lateral roles at other companies. A high termination rate also signals problems with the hiring
process.

LinkedIn recommends being honest in the hiring process about the company’s culture. Don’t tell
people what you think they want to hear—present reality as it is.

10. Toxic or negative culture: Here’s a staggering stat from SHRM: About 25% of U.S. employees
actually dread going to work. They don’t feel safe expressing their opinions, and they don’t feel
valued for their efforts. That costs companies billions in avoidable turnover.

No organization sets out to create a toxic work culture. Often, it’s a combination of many of the factors
we’ve just discussed.

Leadership consultancy The Clemmer Group defines culture as “the sum total of the common attitudes
and beliefs held by people based on their experiences. These experiences then influence the behavior
and willingness of everyone to work with or against the systems and processes.”

If you suspect that your culture is contributing to high turnover, take a look at how openly and
frequently executives communicate with employees. Do people feel respected, empowered to do their
jobs without being micromanaged and free to take the PTO they’ve earned? Do managers trust
employees enough to delegate? Do we have a culture of inclusion?
Efforts to change culture often start with good intentions: Teams define the company’s mission and
values and how they want people to talk about the organization and put in place processes to make that
happen. But improving culture is a tough nut to crack without buy-in from leadership.