Wednesday, May 12, 2021

Top 2 Reasons People Stay or Leave Their Job

(A pdf version is available at the bottom of this article.)

Research has shown that the top two reasons people stay or leave their job is surprisingly the same today as it has been for several decades, and money is NOT one of them. Although our work methods (e.g., virtual office, and a gig economy), technologies, and social consciousness have evolved over time with each generation, there is still a need to address issues of retention, which is significantly cheaper than the cost of turnover.

The conservative cost of turnover is estimated to be one-half to two times the employee's annual salary
1. The financial cost of turnover to a company hits hard not just in terms of the lost employee's projects, but also the loss of institutional knowledge, commitment of time to search for a replacement, in addition to the negative impact on team performance, and on the organization's culture. Although post-pandemic challenges of hiring and retention mid-2021 have shown that these top two reasons are much more significantly important, to the extent people are willing to hold out for them as a condition of employment, or quit within days or weeks of discovering they don't exist. Eventually, depending on your geographic location, or public disclosure on hiring websites of the company's culture, it can making hiring extremely difficult for a company, at least for hiring the quality people essential for ensuring the organization's success. 


1) Leadership - encompasses relationship to the boss, organization culture, management style, and/or having a clear direction.
2) Opportunity.2  
encompasses meaningful work, professional development, and feeling appreciated.

On the contrary, people are willing to stay in their job, even when the pay is not very good, when these two primary qualities are present. Amazon executives expressed concerns of their ability to attract workers in the June 2021 New York Times revelation that Amazon has a 150% turnover rate3, which also showed retention issues began before the pandemic. I recently worked on a project for the U.S. Forest Service to address the issue of hiring and retention with a new generation, which had to address these same issues.

The solutions to address the top two retention issues are interrelated, thus all must be addressed systemically to be sustainable. However, post-pandemic 2021 into 2022 indicate that these actions be listed in priority order. 

1) Connectivity - The workforce is significantly more virtual. However, similar to the ancillary benefits of kids being in school versus online during the pandemic, a common emerging issue is that employees are becoming much more disconnected to company purpose, culture, learning, and building of trust with each other and with management. Particularly when hiring someone virtually who is new to joining a company they know nothing about. Building trust takes time and effort. It normally happens in between the meeting, like small talk before and afterwards, or going to lunch, and passing in the hallway. The effort is harder without human contact where 80% of communication is non-verbal.

2) Development opportunities - Professional development happens in many different ways, from formal classrooms, webinars, mentors, hallway conversations, and managers acting as coaches. However, "
the number one skill for recruiters to embrace in 2021 is adaptability."5

3) Strategy/Purpose - Leaders setting clear organization direction and communicating it throughout the company. The more disconnected the employee, the less they are able to connect, or communicate purpose, and more likely they are to ultimately quit. Recent research indicates that only ___% of employees understand their company's strategy and direction, which is still true with research in 2012 that only 14% of employees4. An employee who doesn't feel 

4) Managers as Coach - Managers focusing on outcomes versus micro managing, and learning coaching skills to facilitate professional development 

What are you doing that contributes to the employee staying or going?
 If managers knew the answer, it’s likely that the statistics shown above would not be so high. Your greatest strength can be your most dangerous blind spot.

Go to lunch with employees and ask how their job maps to the business strategy, or how the manager supports their personal vision for the future.  Offer to buy lunch if they have a concrete answer.  According to research, you have at least an 86%3 chance they will not know the answer and you won’t be forking over any lunch money. 

Among the qualities that define exceptional leadership4, people want to know and feel that: a) there is a plan; b) they have a role to play that supports the plan (e.g., meaningful work); c) there is empowerment to function independently; and d) there is opportunity for professional development to achieve their best.  “Opportunity” does not necessarily mean promotion.  Along the way they want transparency, to be respected and supported.  How do you define success and encourage the people you manage or lead?  If you verbally define what is expected, then that’s your first warning flag.  Effective performance management tools, measurable objectives, cross-functional opportunities, training, coaching, and mentorship are a few answers.  An empowered employee has a multi-dimensional process that helps them control their work and fosters power in managing their success and failures.

A successful leader and manager can blend the skills of leadership, to inspire vision, confidence and stability, with management to produce work results, while creating opportunity.  However, most follow the cultural norm of “command and control” to get the job done. Ask anyone who was promoted, or manages a business about the different skills required.  We tend to rely on the skills that were great strengths that made us the success of today.  But those strengths are a liability going into the future.  High-performing people don’t want to be micro-managed.  But, like most leaders, managers, owners, and entrepreneurs, the solution tends to be running faster, pushing harder, working longer, communicating ineffectively, and creating more procedures to fix problems.  In the process they push away the greatest assets that could help achieve the sustainable success they’re desperately seeking.

What have you done to influence success and retention or departures?  Small business is able to easily attract and retain high quality talent from large stable organizations when the company demonstrates the missing links.  Everyone has their own internal motivation.  What drives one person is not the same for another.  Leadership can inspire and tap into human potential.  To achieve greater success and employee retention, know how you operate and how you affect the people around you.  If you’re not absolutely certain, then find out.  If you are the obstacle to employee success, then you will continue attracting employees that support your style, but not retain people who can achieve your plan or vision.
2 CNBC  2/27/2019 "94% of Employees say they'd stay if the company invested in their learning 
Forbes 10/9/2016 "Ten Ways Managers Cause Employees to Quit 
2 Harvard Business Review 9/2016 "Why People Quit their Jobs 
Forbes 1/2/2013 “Top Five Reasons Employees Will Quit in 2013 
4 8 Signs of an Extraordinary Boss”  

   Bureau of Labor Statistics.

5SHRM (Society for Human Resource Management) 2/1/21 "2021 Recruiting Trends Shaped by the Pandemic"

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