The economy is making a slow, grudging recovery. That's the good news. The bad news? Expect employee movement to pick up as well. Voluntary turnover dipped during the worst of the recession. But as business picks up, more employees will be leaving for greener pastures.
What can you do about it? Start by understanding the reasons why employees might leave your firm. There is a good deal of misunderstanding about the causes behind voluntary turnover. While most companies conduct exit interviews, they often fail to uncover the real reasons for an employee's departure.
The Saratoga Group has conducted thousands of independent exit interviews and has found significant differences between what employers and employees report as reasons why people choose to change jobs. For example, their interviews revealed that 89% of managers felt that employees left mostly for more money. But 88% of departing employees said they left for reasons other than money.
The Saratoga study identified seven main reasons why employees leave their job:
The job is not what they expected. Expectations play a critical role in both the employee's decision to take a job and his decision to leave. When initial expectations are not met, the process of "disengagement" begins (see below). The problem often begins when the employer fails to establish realistic expectations during the recruiting and hiring process. Obviously, you want to do your best selling the job to a coveted candidate. But overselling or failing to disclose the less desirable aspects of the job can cost you later. A key aspect of the interview process should be confirming mutual expectations about what the job entails and the work environment.
The job is a bad fit for the employee. Research by the Gallup Organization found that poor job fit is the top reason for employee disengagement--when interest and productivity drop. Disengagement usually precedes an employee's voluntary departure. (Remarkably, Gallup found that 75% of workers are not engaged on the job, costing the U.S. economy an estimated $250 to $350 billion a year in lost productivity!) Again, the problem begins in the recruiting and hiring process, but can also surface later when the firm fails to find the best fit for the employee's evolving skills and interests.
There is a lack of feedback and coaching. This is a common shortcoming, resulting in lower productivity, quality, professional growth, and job satisfaction--leading ultimately to higher turnover. Feedback and coaching obviously help the employee develop her skills and performance. But it also communicates that the company cares about the employee and wants to invest in that individual's future with the firm.
They see little opportunity for career growth. This contributes to turnover among all employees, but especially among younger and "nonprofessional" staff. Younger employees often are looking to advance at a faster pace than their older colleagues did. Most firms I've worked with lack clear career paths, the very thing younger professionals want. We need to also consider the traditional time line for moving people into management roles. Other industries, for example, are promoting capable technical professionals to project management roles 3-4 years out of college.
Many nonprofessional workers in our industry feel trapped in their current jobs with little chance of advancement. The A/E firm culture often seems to undervalue the contributions and potential of those in administrative or technician level jobs. Yet many of these individuals not only add tremendous value to the team, but have substantial untapped potential to take on larger roles within the firm if given the chance.
They feel devalued and unrecognized. Compensation--both salaries and bonuses--play a role here, but as noted above, it's much less than commonly thought. A greater factor is a general sense among employees about whether they are properly appreciated and valued. This is more often demonstrated in non-monetary forms, such as listening to employee concerns, inviting their input on decisions, formally recognizing their successes, caring about them as people, entrusting them with appropriate freedom and authority, and giving them opportunities to grow and advance.
They feel overworked and stressed out. There is growing interest among employees (especially younger workers) in maintaining a work-life balance. At the same time, Americans are working longer hours and on-the-job stress is increasing. Work-related insecurity associated with the recession certainly hasn't help this situation.
The problem clearly extends to our profession. Long hours, pressure, and extensive travel all can contribute to employee turnover. Firms are attempting to respond with more flexible hours and policies, but many are struggling due to recent layoffs and lingering reluctance to staff up to meet current workloads. Even apart from the economic downturn, many managers have long favored some degree of understaffing to maintain higher utilizations. Yet the net benefit is dubious if this increases turnover and its associated costs.
They are unhappy with their boss. According to Gallup's workplace research, a poor relationship with the boss is the number one reason why employees leave. Gallup concluded, "People join good companies but leave bad bosses." In other words, there's little a company can do to create a great workplace if they have ineffective bosses--those who don't invest time in or show concern for their employees.
In my experience, too many firms in our business fail to give this matter appropriate emphasis. They ignore the problem of deficient bosses, especially if these individuals have strong technical credentials. If you're serious about reducing turnover, this is a good place to start. Establish specific expectations for those in supervisory roles, provide appropriate training and mentoring, and track performance by routinely getting feedback from those they supervise.
Do any of these reasons hit close to home at your firm? If so, there is clear justification for making investments in creating a more competitive workplace, and all the more as the economy begins to improve. For ideas, you might check out my previous post, "Seven Steps to a Winning Workplace."