The trend of “job-hopping” is causing concern worldwide, with one in five employees planning to leave their current job within the next year according to statistics.
This phenomenon has even affected the workplace everyone dreams of – Google , where the average employee tenure is only 1.3 years, resulting in the company being ranked in the top 10 for companies with a high turnover rate. The question remains, why are more and more employees leaving their jobs, and what can businesses do to retain talent and attract new employees?
Illustration: Alessandra Bruni
TOP 3 REASONS WHY EMPLOYEES ARE LEAVING
1. Disagreement with supervisor
Many studies have shown that conflict with supervisor is the number one reason why employees quit. According to McKinsey, employees’ decision to quit is largely due to their superiors’ disrespect and unwillingness to listen to their opinions, creating an unequal working environment.
2. Lack of work – life balance
The majority of employees are committed to performing their best during work hours. As a result, outside the workplace, they want to have time for themselves, their family, friends, and other social connections. As a result, incessant “deadlines,” extended working hours, and frequent overtime will have a detrimental impact on employee motivation and loyalty towards the company.
Illustration: Katarzyna Urbaniak
3. Benefits does not match employees’ needs
It is a common misconception among managers that giving employees a raise will automatically increase their productivity and commitment in the long run. However, this belief is not entirely accurate.
In the current job market, we can observe fierce competition, where employees, especially younger ones, tend to switch to competing companies, even if they have been with their current employer for a long time. This is especially true if they receive better benefits, such as earned wage access, increased paid time off, retirement plans, health insurance, and more, at their new workplace.
What are the consequences of high turnover rate?
Businesses that experience high employee turnover rates can suffer both direct and indirect consequences in terms of costs. Not only are there costs associated with recruiting new employees, but the company may also face damage to its intellectual property, a disruption of its internal culture, and added expenses for training new staff. These outcomes are detrimental to the business’s long-term growt. Furthermore, when an employee resigns, their responsibilities are often transferred to other team members, which can negatively impact morale and productivity across the entire team. If high turnover rates persist, the company’s reputation among major shareholders and loyal customers may also suffer, as these parties tend to value long-term relationships with stable and reliable businesses.
Strategies to lower turnover rate
Here are some strategies that business managers, particularly those in human resources, can implement to reduce the risk of employee turnover:
1. Reconsider the way employees are treated
As noted earlier, poor leadership, rather than unsuitable job, is the main cause of high turnover rates in businesses. Managers may want to earn the respect of their employees, but are they treating their subordinates with the same level of respect? It’s important for team leaders to ask themselves if they’re fulfilling the role in order to earn the trust and respect of employees.
2. Review the employee benefits package and consider offering Earned Wage Access (EWA)
Benefits are now a critical factor that employees consider when making decision whether to remain with a company or “jump ship”. Based on recent studies, some companies have witnessed positive changes in their workforce by enhancing their benefits package, with 64% of survey participants reporting that they no longer wish to leave the company.
- Employees have reported that by improving their benefits package, productivity has increased by 73%, satisfaction levels have increased by 65%, company loyalty has increased by 56%, and corporate culture has increased by 49%.
- For businesses, they have observed a 67% increase in employee morale, a 67% increase in corporate identity diversity, and a 43% increase in employee retention.
One option could be to develop a financial wellness package for employees, which includes EWA. EWA can alleviate the financial burden on employees and allow them to work with a greater sense of security.
3. Create a flexible working environment
More and more employees are looking for “flexibility” in their work, regardless of whether the position and industry. Allowing employees to easily change shifts with colleagues is also a way to increase work flexibility, encouraging them to stay with the business longer.
Although there’s no guarantee that employees will stay for the long haul, it’s crucial for managers to take swift action to minimize turnover rate because every resignation could have negative impact on morale and productivity. By implementing the aforementioned tactics, businesses can lower their turnover rates and cultivate a work environment that employees would not want to leave.