Did you know that 30% of new hires leave within their first three months of employment? Seeing employees come and go is a natural part of running a business, but if you’re experiencing a high turnover rate, this indicates an underlying problem you need to address.
Employee retention helps you hold on to your most talented team members, reducing hiring costs and empowering your workforce to thrive. If you’re struggling to retain your high performers, it’s essential to understand why your employees are moving on.
Let’s explore some of the most common reasons for employee resignations and what you can do to mitigate them.
1. Lack of flexibility or work-life balance
Even now, years after the pandemic, with remote and hybrid work peaking, flexibility has remained a core factor influencing employees’ decisions to stay with their current employer or seek new opportunities. The truth is that most people simply don’t want to be in an office five days a week.
If you, as an employer, fail to offer flexible work arrangements, this doesn’t promote a healthy work-life balance and often leads to frustration or burnout. Allowing employees the freedom to work from home or affording greater flexibility in work hours means they can still attend to personal commitments without impacting their productivity—whether it’s picking up children from school or enjoying a weekly gym class.
Introducing more flexibility can greatly impact your employees’ satisfaction, but how about going a step further and allowing them to work while traveling or moving to another country while keeping their current role? Nowadays, retaining your employees even when they venture abroad is more seamless than ever, with employer of record (EOR) services making hiring in Spain, Germany, Portugal, or elsewhere a viable option.
2. Minimal training or opportunities for progression
Lack of progression or training are two very common reasons employees start searching for opportunities elsewhere. No matter what role someone is in, there are always opportunities to upskill, and for employees who wish to take advantage of new learning opportunities, training and progression should be supported by managers.
Implementing a robust training program demonstrates a commitment to employee development, whether through additional courses, peer mentoring, or formal qualifications. Similarly, career advancement is essential. Most employees would only be willing to remain in the same role for several years if there was an opportunity for them to take on new responsibilities or advance to a more senior position.
This is where effective manager-to-employee communication needs to be in place. Facilitating open discussions about individual goals and interests allows employees and their line managers to collaborate on crafting personalized career progression plans. Failing to do so may drive employees towards competitors offering promoted roles and greater learning opportunities.
3. Uncompetitive salaries with little room for growth
Salary is closely related to career progression and is an unavoidable factor in an employee’s decision to remain loyal to your company or seek pastures new. How much you pay your employees should align with the responsibilities and expectations of their role, industry benchmarks, and location. Put simply, if you’re not paying your people competitively, you’re giving them all the more reason to leave.
Competitive pay motivates employees to elevate their performance, strive to meet promotion criteria, and generally feel valued in the workplace, all of which positively impact their output.
Negotiating new salaries during periodic salary reviews ensures ongoing alignment with market rates, which is an essential practice for retaining top talent and maintaining employee satisfaction.
At the end of the day, employees want to be paid fairly. If there’s no indication of a pay rise in the near future, a lack of tangible goals to aim for, or no real progression opportunities, this can lead to demotivation and a sense of injustice. Improved financial planning enables better forecasting and helps with the identification of viable opportunities for pay raises, ensuring you’re able to pay fair market rates while remaining financially stable.
4. Lack of appreciation or not feeling valued
If you can't recall the last time you or one of your line managers provided positive feedback to a team member, it's long overdue! It’s crucial to ensure your employees feel valued and appreciated for their hard work, whether it's completing a complex project or consistently delivering high-quality output.
You may genuinely appreciate everything your team does as an employer, but individuals can't read minds. If you don't express your appreciation, they'll never know. In the long run, this can lead to a sense of disconnection and demotivation at work, resulting in them moving to a business where they feel their efforts are valued.
That said, it can sometimes be difficult for employees to express their need for validation. Try implementing different types of initiatives such as encouraging everyone to give shoutouts on company-wide channels, small gifts for great performance, or verbal feedback like a simple, “Well done, the work you did on X was great and I really appreciate everything you did!”
5. Feeling disengaged with work
Feeling disengaged with work not only affects productivity and well-being but can also serve as a catalyst for someone to consider leaving their job. When individuals lack fulfillment and connection to their roles, they may start to question their long-term commitment to the organization.
Disengagement often leads to feelings of dissatisfaction and frustration, prompting employees to seek an opportunity elsewhere where they feel valued, challenged, and more aligned with their professional aspirations.
To avoid this, look for key signs of disengagement, such as decreased productivity, reduced participation, or direct feedback from these individuals around their level of satisfaction with their roles. Addressing these signs promptly through open communication – and providing opportunities for growth and development – can help re-engage them with their work and prevent them from seeking opportunities elsewhere.
Tips for increasing employee retention
To increase employee retention and address the reasons behind potential departures from your business, it's crucial to take proactive steps. Here are some changes you can implement to enhance employee retention, thereby keeping hold of your top talent and enhancing the overall operation of your business:
- Allow employees to work from home or adjust their work hours to accommodate personal commitments.
- Consider offering opportunities for employees to work while travelling or from another country, facilitated by an employer of record service.
- Develop a robust training program that includes additional courses, peer mentoring, and formal qualifications.
- Create clear paths for career advancement and provide opportunities for employees to upskill and progress within the organization.
- Review and adjust salary and benefits packages to align with industry benchmarks and recognize employees' contributions.
- Conduct periodic salary reviews and negotiate new salaries to ensure ongoing alignment with market rates.
- Regularly provide positive feedback and recognition for employees' hard work and achievements.
- Encourage managers and team members to express appreciation through shoutouts on company-wide channels or provide verbal feedback.
- Proactively communicate with employees to understand their level of satisfaction with their role and promptly address any concerns or issues.
Final Thoughts
When employees start leaving your business, especially within a short space of time, this can be concerning. But the best thing you can do is address the underlying causes. By looking out for these six common reasons for resignation, you can create a more enjoyable, flexible, fair, and supportive work environment that your employees won’t want to leave.
