More than a third of the workforce will quit their jobs this year. Some might call that an epidemic. Yet, when we peel back the layers on why people quit their jobs, we see an opportunity for employers to get smart(er) about how to attract the right talent and keep them.
In this post we address four ways to uncover why employees quit and what to do about it.
At last count, the U.S. economy had 7.4 million jobs on the market and only 6 million people actively seeking work. The historically low 3.7% unemployment rate has kept candidates in the driver’s seat. But it’s not simply the shortage of viable candidates per job that’s increasingly commanding employers’ attention. It’s the rate at which employees are voluntarily leaving their current positions.
Churn costs a company 50-150% of an employee’s salary, not to mention lost time, productivity and institutional knowledge. Yet, for all the stats we can pull about trouble with the quits rate, it’s better to, instead, turn our attention to why employees are quitting your company at all.
Walking Out The Door With Confidence
Economists like to see a high quits rate. It signals a job market so strong that employees can walk away from one job with a new job in hand — or with sheer confidence that it’s no big deal to get another one.
In theory, a high quits rate should give workers greater bargaining power, too. Wage growth, however, has been sluggish over the past year. While money is a very real factor in hiring (and quitting), the lack of wage growth suggests there’s more to attraction and retention in this market than dollar bills.
And employers can’t be slow to address this issue. After all, the stigma of job-hopping is a thing of the past — and a different mindset is the future of work.
The millennial generation (and coming in hot: Gen Z) will be roughly 50% of the total workforce by next year. Only 28% of millennials intend to stay in their jobs for 5+ years, and an even smaller sliver of Gen Z plans such a tenure.
Left unchecked, that quit rate may make history of its own.
Flip Quitting Into An Opportunity
Thinking of the quitting economy as an opportunity isn’t sugar-coating. It’s a reality check.
Reasons workers quit aren’t cut and dry. Job stagnation is a leading cause for employees to seek greener pastures. Oftentimes, it’s easier for a person to get the promotion they want at a new company. Same goes for raises.
It’s no surprise, too, that culture can make or break a worker’s decision to quit. But employers must embrace more than ping-pong tables and free lunches when it comes to nurturing a strong workplace culture. That’s where opportunity knocks for addressing the quitting problem.
4 Strategies For Turning Around Churn
Optimize candidate engagement.
How well does your recruiting process communicate your company’s workplace culture and, more importantly, real expectations for the job? Hiring managers can bolster retention by making “fit” a two-way street. Get honest with candidates early about what success feels like — from their perspective and from yours. Use candidate engagement touchpoints to share your employer brand story, invite two-way communication to field real questions and empower both sides to make stronger employment decisions. Furthermore, maintaining engagement throughout the relationship can keep recruiters and managers ahead of redeployment or talent mobility opportunities.
Nurture a culture of development.
Career stagnation often happens when an employee feels stuck in a title and set of duties, or simply doesn’t see the impact of their work. It’s like being stuck in mud. One common cause of stagnation is a manager’s lack of awareness that it’s even happening. Growth is a cultural mindset, and it needs to be built into training (and expectations) for managers, too. A culture of development encourages employees to continuously set goals, get feedback and develop new skills. It requires an active, modern approach to performance management that can keep employees engaged and focused on their growth trajectory within your organization.
Learn workplace love languages.
Nothing inappropriate here. Workplace love languages are ways we express and experience appreciation at work. (They’re adapted from the five love languages of relationships.) Even if you can’t recognize high-achieving employees with raises and promotions, you can invest time to understand what makes them feel appreciated. Nurture open, honest dialog about what recognition and motivation feel like for them. As we mentioned earlier, it’s not always about money.
Embrace the exit interview.
Use each “quit” as a data point. Maximize the learning opportunity in each exit interview — and be clear about how you’ll apply what you learn to your retention strategy (and, when appropriate, your management strategy). The thing is, exit interviews need not be good-byes. There’s no telling, for many instances, what may come from leaving a door open with a good relationship.
The Real Reason People Quit
Truth is, there is no real reason. It’s different for everyone. But there is truth for each organization to uncover about itself. Following the four strategies above, you’ll be able to reflect on your company culture and how employees honestly feel about being part of it (that, after all, is your employer brand).
What’s your next step? Consider taking a look at employee engagement and setting goals for success. As we’ve discussed, active, open communication is key to making a difference with retention.