Regardless of the industry, many companies have a difficult time holding on to their best and brightest employees. This can be a devastating blow if you lose one of your top performing employees. It is also very costly for companies to train new hires when an individual leaves. Managers need to take a good look at themselves and their companies if they want to improve employee retention. Sometimes there are unavoidable reasons why employees leave, but there are also numerous situations where retention can increase. Let’s examine the top three reasons why your company might be losing great employees.
Reason 1: Poor Management
It has been said that people leave managers, not companies. Of all the reasons people leave their jobs, working for a bad manager consistently ranks at the top of the list. People often join the company because of the compensation, growth opportunity, or mission but they end up leaving because they dislike working for their manager. Employees want to feel comfortable approaching their manager with questions or concerns and they want to feel supported. A good manager also makes the employee feel valued and important. Furthermore, good managers act as mentors to their employees and empower them with the knowledge and resources needed to do their jobs. When employees feel like they are being micromanaged and are receiving little or no feedback, they are more likely to leave the job. So companies beware: poor management leads to increased turnover.
Reason 2: They Aren’t Making Enough Money
The second most common reason employees leave their jobs is simple: changing jobs is a way to increase their income. Studies have shown that the national average for annual pay raises is 3% while the average pay increase when you change jobs is almost 15%. This is quite a substantial difference and can cause many companies to lose their top performers. This generally happens because when a company hires a new employee they might not have a great deal of experience in that field. As they grow with your company, you might recognize their talents and offer a 5% pay increase each year. However, a recruiter might see this person as a valuable hire and will offer 5-10% more than you are paying. In turn, your employee ends up feeling undervalued by you and highly valued by another company. This means you need to evaluate your employees on a regular basis and pay them what they are worth before they are enticed to leave by a more competitive offer.
Reason 3: They Don’t See Opportunity for Growth
Everyone is looking to grow professionally. People have ambitions and personal goals and are constantly seeking these growth opportunities. Of all the job attributes that millennials value, the opportunity to grow comes in at number one. You must be careful about how you construct your company. If you put your top performers in positions where finding growth is difficult, it is only a matter of time before they start looking elsewhere. Managers need to understand their employees’ long term goals and work to give them a path to get there. If you know what your employees are looking for in a career, you can be much better prepared to create growth opportunities for them that will keep them happy and engaged.