Ask employers why people quit a company and 9 out of 10 will tell you it’s about the money. Ask employees the same question and you’ll get a whole different story. PricewaterhouseCoopers (PwC) discovered this when they asked 19,000+ people their reasons for leaving as a part of exit interviews they conducted for clients. The top 10 reasons why employees quit? Check out the responses below.
As reported in (2005) The 7 Hidden Reasons Employees Leave by Leigh Branham, page 21, Figure 3.1
Yes, compensation was a factor in 12% of the cases, but look at some of the other issues that drove people away—growth, meaningful work, supervisor skills, workload balance, fairness, and recognition—to name a few.
What type of environment are you providing for your people?
Author, speaker, and consultant Leigh Branham, who partnered with PwC to analyze the results of the study identifies that trust, hope, worth, and competence are at the core of most voluntary separations. When employees are not getting their needs met in these key areas, they begin to look elsewhere.
Wondering how your company would stack up in these areas? Here are a couple of questions to ask yourself. How would your people respond if they were asked to rate their work environment in each of the following areas?
- I am able to grow and develop my skills on the job and through training.
- I have opportunities for advancement or career progress leading to higher earnings.
- My job makes good use of my talents and is challenging.
- I receive the necessary training to perform my job capably.
- I can see the end results of my work.
- I receive regular feedback on my performance.
- I’m confident that if I work hard, do my best, demonstrate commitment, and make meaningful contributions, I will be recognized and rewarded accordingly.
Don’t wait until it’s too late
Better compensation is only a part of the reason why people leave an organization. In most cases it is a symptom of a more complex need that people have to work for an organization that is fair, trustworthy, and deserving of an individual’s best efforts. Don’t take your people for granted. While you may not be able to provide the pay increases you were able to in the past, there is nothing stopping you from showing that you care for your people, are interested in their long term development, and are committed to their careers.
A number of studies throughout the recession indicate that staff members do not feel that their organizations treated employees entirely honorably during the downturn. Reductions in force that broke the employment covenant and reductions in merit increases or raises have left many employees indicating that they will actively be seeking employment elsewhere when the economy improves.
Chris Edmonds, a senior consulting partner with The Ken Blanchard Companies, believes employers may start seeing a talent drain as early as the latter part of this year as staff begin seeking out positions with employers who will value them more highly. In the meantime, and perhaps even more damaging, these same workers are content to “quit and stay,” emotionally checking out on their current employers and just doing enough to remain below the radar and maintain their jobs.
Allowed to remain unchecked, this attitude can spread and soon an organization finds itself battling a general malaise and heaviness. Performance is sluggish, but improvement is hard to pinpoint. The organization is surviving, but it isn’t thriving. Worse yet, attitude and morale issues begin to surface as employees question the “fairness” of it all. This is often experienced as an entitlement mentality, something that many organizations are experiencing.
Breaking the negative cycle
A damaging negative cycle can ensue as managers bemoan the entitlement mentality of employees while employees point to a perceived injustice in the way work is assigned, managed, and rewarded. Once this cycle starts, it can be difficult to reverse. Organizations can hope that employees will rise above the situation, but a more likely scenario is that leaders will have to take the first step.
Looking to reverse a negative cycle in your organization? Edmonds has three suggestions for leaders:
- Refocus on strategy. Identify key organizational objectives and connect department, team, and individual goals to overall strategy.
- Engage staff and leverage skills. Take a positive approach. Trade in a defensive posture seeking to “avoid mistakes” and instead move in a positive direction that explores strengths and possibilities.
- Support and serve. See your role as “chief obstacle remover” instead of “inspector general.” Make it easier for staff to work the plan without interference.
This is especially true with instances where managers are leading staff who have specialized skills, or who may be much more experienced, smarter, and skilled in their function than the leader is. As Edmonds explains, “A leader who manages with an assumption that they must control decisions in this environment will create a disaster. The leader needs to coach from the sideline, get the strategy clear, and then let the talent drive the appropriate activity. The leader needs to be kept informed so they can coach and refine the plan ‘in the moment’, but for the most part, enable the subject matter experts to act upon their knowledge.”
Leaders who set a strong vision, develop an aligned strategy, and engage talented staff in pursuit of that vision by encouraging, removing hurdles, and marshalling resources will always outperform those who remain reactive and only hope for the best.
Leading is about going somewhere. Where are you going? Are you moving forward—or are you standing still? Take positive action today!
That’s the message Scott Blanchard shares with readers in his latest column for Fast Company magazine. Drawing on exclusive, primary research that shows Growth as one of the lowest-rated employee work passion factors in today’s organizations, Blanchard shares what individuals, managers, and senior leaders can do to improve growth perceptions inside their organizations.
For individual employees, Blanchard recommends first and foremost, to focus on doing a good job in your current role while you look for new opportunities inside the company. As he explains, “Growth beyond your current job is a privilege usually reserved for people who perform in an exemplary fashion. When managers get requests for growth from people who are not performing at their best, it may feel to them like they are stepping on a treadmill with an employee who may never be satisfied in his or her current role. Most managers will avoid this, because they suspect it will become a never-ending process.”
For managers, Blanchard advises facing growth conversations head-on—even when you don’t have traditional next steps up the corporate ladder to offer. As a manager, keep your eye out for new opportunities and new projects that may come up. Know which people on your team would consider it rewarding to get involved in a project that is different than their normal job.
This could potentially be a lateral move, or even a move to completely different part of the organization. Some of the greatest opportunities for growth are found in areas that integrate what’s happening between two departments. For example, a project following up on leads could bring the sales and marketing departments together, while refining and solving a business problem could integrate the engineering and sales departments.
Good managers look out for their people and think beyond the day-to-day. When they have someone who is really working hard for them, they go out of their way to help that person grow.
For senior leaders, Blanchard reminds executives that good people always have opportunities. His recommendation? Conduct an assessment to find out how employees view current growth opportunities in the organization. Make growth a priority. Your best people are not going to wait patiently for opportunities for advancement—even in a slow economy. If you are not providing them with growth opportunities, they will go elsewhere and they will take what they learn from you and use that to build their career at another company.
You don’t want to be the person at a top employee’s exit interview who hears, “The headhunters seemed to care more about my career development and growth opportunities than this organization did.”
Growth is just one of 12 important factors employees evaluate in their work environment. To see Blanchard’s latest research on the topic read Employee Work Passion Volume 3: Connecting the Dots. To read more on Scott Blanchard’s specific strategies for creating an engaging work environment check out his other Fast Company articles.
“Make sure that people understand your reasoning and process. If you decide that some information is just too sensitive to share openly, that’s okay. Just be sure that the process you use isn’t seen as secretive. In the absence of openness, people will imagine the worst,” says Scott Blanchard in a recent column for Fast Company.
One area where companies often run into trouble with this is sharing information about employee compensation. Most companies keep actual salaries confidential but that doesn’t mean that the process of determining salaries has to be confidential also, explains Blanchard. “If you have a good reason for paying at the level you do, let people know. Keeping it a secret doesn’t help things. It just causes unnecessary discontent.”
A Case in Point
To illustrate his point, Blanchard shares a story about the experience of a CEO who serves on the company’s board of directors. This CEO went through something just like this when an internal employee survey showed dissatisfaction about the fairness of pay in his company. This was really frustrating to the CEO, who believed that the company’s pay scales were well above industry averages.
“It was purely an openness issue,” explains Blanchard. “The company had been operating fairly for a long time but leadership had not taken the time to fully disclose the way they were making decisions. When they eventually did disclose the process, perceptions went up.”
For this company, the first step was to conduct a highly visible and transparent study with an outside firm to analyze the company’s whole compensation system.
“What it showed was that the company’s base pay levels were almost exactly at the 50th percentile for organizations of a similar size and with the same demographics. It also showed that the company had a generous bonus plan in place available to all employees. The bonus plan, together with the base pay, resulted in employees being compensated at the 75th percentile–well above average.
“Armed with this information, the leadership team went on an organization-wide campaign to talk about the procedure they used to determine pay scales and the rigor they used in applying it. As a result, they were able to change people’s perceptions of the level of compensation in the organization and its relative fairness. Because people had a greater understanding about the way pay scales were determined, they had a better capacity to understand and accept the results, even though they still wished—like all of us—that they were making a little more.”
How open is your company when it comes to sharing information about how decisions are reached?
Are you more of an “open book” or a “closed book” culture? Remember that your approach will have a definite impact on employee’s perceptions of fairness.
As Blanchard concludes, “When people aren’t able to point to a process that is known, published, and understandable, they start to make up their own stories. If there isn’t clarity about the way decisions are made, the stories people make up are typically a lot worse than reality.”
You can read Scott Blanchard’s entire column in Fast Company, The Just-Right Approach To Social Media And Transparency, And What It Says About Your Company and also check out Blanchard’s other thoughts on compensation at The Role Money Plays in Engaging Employees. To read more about money’s role in creating an overall engaging work environment, download the new Blanchard white paper, Employee Work Passion: Connecting the Dots