7 Main Causes of Employee Turnover
Employee turnover is a costly and disruptive problem for businesses. When employees leave, it can create a backlog of work and cause project delays. Not only does it require time and resources to recruit and train new employees, but high employee turnover rates can also create an unstable work environment and damage a company's reputation, making it difficult to attract and retain top talent.
What Is Employee Turnover?
Employee turnover is the rate at which employees leave an organization. It is a common occurrence in businesses of all sizes. Voluntary turnover occurs when an employee resigns from their position, while involuntary turnover refers to terminations or dismissals. High employee turnover rates can damage morale and lead to a toxic work environment. As such, it is important for organizations to take steps to reduce voluntary turnover rates.
What Causes Employee Turnover?
It is important to understand the factors that contribute to a high employee turnover rate. There are many reasons why employees may choose to leave, including relocating for a new opportunity, pursuing a different career path, or retiring. However, the most common reasons for high employee turnover are caused by negative employee experiences at work.
Dissatisfaction with Current Job Position
One of the most common reasons for a high employee turnover rate is dissatisfaction with one's current job position. This can manifest itself in a number of different ways, such as feeling undervalued or unappreciated, being passed over for promotions, or simply becoming bored with the day-to-day routine. Whatever the cause, dissatisfied employees are more likely to look for new opportunities elsewhere.
There are ways human resource professionals and managers can increase employee satisfaction levels and retain employees in the workplace. Leaders should encourage employees to discuss what makes them dissatisfied with their work.
Receiving honest feedback about poor work-life balance, lack of career development opportunities or employee burnout can help managers improve the work environment and decrease employee turnover in an organization. Creating an open workplace culture where employees' professional goals go hand in hand with transparent communication, social interactions and relationship building can increase employee engagement and reduce employee turnover. 1
Discrimination
Discrimination in the workplace can take many forms, from subtle comments to overt harassment. Unfortunately, discrimination is all too common, and it can have a serious impact on employee retention and job satisfaction. When employees feel that they are being treated unfairly because of their race, gender, age, or other characteristics, they are more likely to look for a new job. In some cases, discrimination can even lead to legal action, which can cost an organization both time and money.
Big-picture company goals should aim at having no discrimination in the workplace. It can be done by creating a work environment with policies prohibiting discrimination. In addition, workers should be encouraged to respect each other’s differences and the company should respond to evidence or complaints of inappropriate behavior by dealing with it confidentially and fast. Finally, supervisors and managers should be trained on how to respond to discrimination. This can lead to higher employee happiness, job satisfaction, and a lower turnover rate. 2
Retaliation
An important cause of employee turnover is retaliation. It occurs when an employee is punished for reporting wrongdoing or opposing discrimination. While retaliation may seem like a quick and easy way to discipline an employee, it often backfires. Punishing an employee for coming forward sends a message that speaking up is not tolerated, which can lead to a company culture of silence and mistrust. In addition, it can damage relationships between employees and their managers, making employee retention more difficult.
Organizations can demonstrate great leadership skills by reducing retaliation, adopting employee retention strategies, and reducing turnover rate. First, a company should not take their frustration out on an average employee. All the rules and expectations of the company should be clearly explained to all members of staff.
Finally, employees should be encouraged to openly speak their minds and report discrimination or wrongdoing without being afraid of retaliation. This will ensure higher job satisfaction levels, a good employee turnover rate, and open workplace culture. 3
Favoritism
When it comes to the workplace, favoritism is defined as treating some employees better than others for reasons unrelated to job performance. This can take the form of preferential treatment in areas like assignments, promotions, and raises.
While there may be occasional instances where favoritism is harmless, in general, it can create a toxic company culture and lead to feelings of resentment and unfairness among employees. In some cases, it can cause issues with employee retention and high voluntary turnover.
In order to create a positive workplace culture and decrease turnover, organizations should find ways to reduce favoritism. Keeping a record of who took the lead in the previous project, or who was picked to do a presentation last week can help managers keep track of how they rotate tasks and make sure everyone in the team gets picked. Employee recognition can also be increased by building bonds with them. Finding what you have in common with your team members can increase employee engagement and reduce staff turnover. 4
Nepotism
Nepotism is the practice of giving preferential treatment to certain individuals, usually because they are related to those in power. In the workplace, this can manifest in many ways, from hiring relatives to giving them choice assignments or plum promotions.
While nepotism is not necessarily illegal, it can create an unfair environment and lead to charges of favoritism or discrimination. Additionally, it can undermine morale and create tension among employees, leading to toxic company culture and high turnover.
Organizations can reduce nepotism by setting a clear anti-nepotism recruitment process. Job seekers should know how employees are selected and what the hiring process is. It improves the chance of building organizational trust and reduces anxiety around perceived nepotism. Other employees should be aware of the anti-nepotism policies of their current employer. Many organizations establish strong policies that prevent individuals who are related from working in the same department, for example. 5
Intimidation
Intimidation in the workplace can take many forms. It can be overt, such as threats or physical violence, or it can be more subtle, such as withholding information or sabotaging someone's work. Intimidation can also be directed towards a group of people, rather than an individual.
Whatever the form it takes, intimidation is always about creating an atmosphere of fear and insecurity. This can have a profound impact on both individual workers and the overall climate of a workplace. Not only does it lead to reduced productivity, but it can also cause absenteeism and high turnover.
A toxic culture where employees feel threatened or insecure should be dealt with promptly. Setting boundaries and letting a bully know their behavior is unacceptable can push employees to do the same when they are confronted with intimidation. Keeping track of employee abuse by documenting the details of what happened, including time and date could be useful for future investigations. Educating managers, supervisors and employees about bullying can eradicate toxic workplace culture and reduce staff turnover. 6
Toxic Work Environment
A toxic work environment is one that is characterized by stress, anxiety, and fear. It can be caused by poor management practices, including unrealistic deadlines, excessive demands, and office politics. Research suggests that many employees are suffering in silence, which can take a toll on both their mental and physical health. Ultimately, toxic workplace culture is unsustainable and will lead to high turnover rates.
HR specialists and managers alike should observe the environments they work in and learn to identify the company's culture that turned toxic. Receiving regular employee feedback is crucial if a company wants to determine if the behavior of a specific manager or team member is unacceptable.
In addition, those in leading positions should take responsibility when handling conflict between team members, or determining whether the situation should be escalated to those in higher positions. Ultimately, uprooting toxic cultures in organizations can prevent situations where stressed and overworked employees change jobs often. 7
Frequently Asked Questions
What Is the Leading Cause of Employee Turnover?
The leading cause of employee turnover is a lack of career development. 8 Most people want to feel like they're doing something purposeful - a job should be not only a source of income but also a source of pride and self-worth. So when employees feel stuck in a job with no room for career development, they may start to feel like their work is pointless and they're much more likely to go for new job opportunities.
What Are the Main Causes of Voluntary Employee Turnover?
Whereas involuntary turnover affects only a small part of the working population, manager behavior, work-life balance, and workplace wellbeing are some of the main causes of voluntary turnover. 8 Poor management can lead to employees feeling undervalued, while a lack of work-life balance can lead to burnout. Finally, workplaces that fail to invest in employee wellbeing are more likely to see high turnover rates as employees seek out healthier environments.
What Causes Employee Turnover in Healthcare?
In 2020, the staff turnover rate of hospitals in the U.S. stood at 19.5 percent. Management issues, low morale, and the amount of time spent on non-nursing tasks are the main causes of employee turnover in healthcare worldwide. Management problems can include a lack of support or unrealistic expectations. Low morale can be caused by a lack of appreciation or simply being overworked. Finally, the amount of time spent on non-nursing tasks can be a factor, as healthcare workers may feel that they are not able to focus on patient care. 9
What Causes Employee Turnover in the Hospitality Industry?
The US Bureau of Labor Statistics states that in some hospitality businesses in the US, such as fast food restaurants, the employee turnover rate reaches 150% annually, excessive stress being the biggest cause of it. Long hours, demanding guests, and tight deadlines can all take their toll on even the most experienced employees. As more and more workers reach their breaking point, they are forced to leave their jobs in search of less stressful occupations. 10
Who Is Responsible for Employee Turnover?
The answer to this question is both complicated and multifaceted. There are many factors that contribute to an individual's decision of whether or not they will leave a company, but it all starts with how happy he/she feels about their job. That's why everyone in an organization - from managers to coworkers should ensure that all employees remain satisfied and productive throughout their time with them - from day one until retirement or separation.
References
1 Labitoria, 2021 https://www.hcamag.com/us/specialization/employee-engagement/7-ways-to-improve-job-satisfaction-in-your-workplace/315417
2 Weekes, 2017 https://healthandsafetyhandbook.com.au/bulletin/8-ways-to-prevent-discrimination-in-your-workplace/
3 U.S. Equal Employment Opportunity Commission https://www.eeoc.gov/employers/small-business/preventing-retaliation
4 Knight, 2017 https://hbr.org/2017/03/how-managers-can-avoid-playing-favorites?registration=success
5 Proctor, 2022 https://www.business.com/articles/prevent-workplace-nepotism/
6 Gordon, 2022 https://www.verywellmind.com/what-are-the-effects-of-workplace-bullying-460628
7 Shell, 2021 https://www.hrpa.ca/hr-insights/tackling-a-toxic-work-culture/
8 Zavyiboroda, 2021 https://hrforecast.com/what-causes-employee-turnover/
10 The US Bureau of Labor Statistics https://www.bls.gov/
