Why Do Employees Leave?

Why do employees leave your organization even when you think you’ve been a great boss? A recent survey by Payscale.com reveals some profound answers, beginning with the current climate.

Changing Jobs Means Lower Risk Today

Just as the sun and soil determine whether your garden plants will grow well or not, the current labor market and economy are affecting your employees’ willingness to take more risks. It used to be that workers wouldn’t leave a job until they were certain they had snagged another one. Today, however, there are more open jobs than there are unemployed people in the U.S. (According to the Bureau of Labor Statistics, there are currently 6.4 million unfilled jobs.) Good employees realize they are in demand. They feel confident that, if they quit today, they can probably find another job tomorrow.

Why Do Employees Leave?

But what is it that makes a team member decide to leave one organization in favor of another? Payscale’s survey revealed that there are several reasons:

1. They want higher pay. 25% of respondents said the primary reason they left was for a bigger paycheck. Interestingly, women were 8% less prone than men to leave for more pay, and 6% less likely than men to choose another organization for higher compensation. Of those respondents who had joined a new organization, 16% were mostly attracted to the increased pay for the position and 6% mainly chose the organization for better benefits/perks.

2. They are unhappy at their current organization. 16% said they left due to unhappiness with the organization. Of those surveyed who had changed organizations, 11% were attracted to the workplace culture, 5% wanted to work for a larger organization, and 2% wanted to work for a smaller one!

3. They want to work at an organization more aligned with their values. 14% of those surveyed left because their values were different than their company’s values. Of those respondents who had found a new job, 27% said that the main attraction to their new organization was the opportunity to do more meaningful work.

4. They have other unmet needs or desires. Why do employees leave? Other reasons are the need to relocate, leaving a part-time job for a full-time one, desire for a promotion, or opportunity for a more flexible schedule. Of those surveyed who were now with a different organization, 17% were attracted to their new employer because of increased responsibilities for their role. Not surprisingly, the survey found that women are 11% more likely than men to quit an organization for more flexibility. Previous research shows that women are more likely than men to take time off from their job to take care of a family member.

Understanding Your Employees’ Mindset

Employees want to grow their careers. The survey found that the longer an employee has been with an organization, the higher the likelihood they will quit for a promotion and more responsibility somewhere else.

Years with OrganizationLikelihood of Quitting for Promotion
1-2 12% more likely
3-5 15% more likely
5-1014% more likely

This was especially true for those in leadership positions. Managers and supervisors are 11% more likely than individual contributors to quit for a promotion; directors were 22% more likely; and 15% of executives quit because they wanted a promotion.

One size does not fit all. Why do employees leave? Your employees’ age is another influencing factor. Compared to Boomers, Millennials are 9% more likely to quit for more money and 15% more likely to quit due to unhappiness. They’re 8% more likely to quit to find a place more aligned with their values, and 19% more likely to quit for a promotion! Gen Xers, however, are 21% more likely than Boomers to quit for a promotion. As for Boomers, the report showed that the biggest reason they quit is to find an organization more aligned with their values. (For a really good graph comparing reasons for quitting by Boomers, Gen Xers, and Millennials, see the Payscale report.)

What does this mean for employers who just want to keep their best employees? In essence, no one motivating solution or package will attract and retain all your best employees! Payscale’s research revealed that there are many reasons for why various types of professionals leave and choose organizations. To make things more complex, professionals’ needs change over time. What might cause them to choose an organization in one season might not be the same in another, depending on their needs regarding commute, family care, and work-life balance, as well as finances, values alignment, and satisfaction with the organization.

How Can You Attract and Keep Good Team Members?

Now that we understand why do employees leave, what can we do to change the dynamic? Payscale makes two compensation-based recommendations:

Tailor your compensation packages to match your company values. Your organization’s compensation philosophy should be reflected in your pay decisions. If your organization values communication, then clearly communicate salary ranges and your rationale behind them. If people are your greatest asset, then make sure to pay them fair market wages. Train your managers in how to talk about pay so there is consistency in your company messaging. “When the core organizational values do not match with the compensation philosophy, it will seem disingenuous to both current employees and prospective employees.”

As a 60-year-old recruiting company, we’ve learned that nothing communicates value to a candidate like a competitive, fair-market compensation package. While money isn’t everything, a lowball offer is usually a red flag signaling candidates what kind of treatment they can expect in the future.

Craft your rewards package to match the needs of your target employee. Who is your target employee? Decide what types of employees your organization needs, learn what is important to them, then tailor your total rewards packages and work experiences to suit their needs, advises Payscale.

Do you know what kind of employees you need? Values alignment between employer and employee is crucial to your workers feeling that they’re doing meaningful work. Figuring out what your target employee looks like first requires establishing your core values as a company and embedding those values into your company’s daily culture. You won’t know what attributes your employee should have until you’ve defined your company’s personality. Only then can you choose employees who fit in competence, character, and chemistry (culture fit).

In summary, employees come in all ages, shapes, and sizes with various needs. They quit one organization and choose another for numerous reasons. Because one size cannot fit all and people experience different seasons, you can’t possibly address all their needs. A reasonable approach, then, is to ask, Who are our target employees? Understanding your company’s values and needs will help you define who you want to attract and retain. Also asking, Why do employees leave our organization? can be informative for shaping future retention practices. (Conducting exit interviews can help.) Understanding your team members’ priorities and values will allow you the opportunity to craft rewards that will specifically meet their needs–and, ultimately, yours.

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