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3 Big Reasons Employees Leave (and how to keep them)

As the captain of your ship (read: your business) it’s your duty to steer your crew (read: your talent) in the right direction, ensure they have life jackets (read: the tools needed to succeed in their role), and do all you can to ensure they don’t go overboard (read: resign prematurely).

3 Big Reasons Employees Leave (and how to keep them)

Employee turnover is inevitable in every industry, but it isn’t totally out of your control; you have more influence over employee retention rates than you realise, provided you identify and address areas of concern. It should be noted that staff turnover takes into account both voluntary and involuntary turnover – voluntary turnover being when an employee leaves on their own accord, and involuntary turnover being when employment is terminated often because of unsatisfactory performance. While neither are desirable, voluntary turnover can indicate that there are internal issues hindering business success.

So, why should staff turnover be limited? Well, talent is your biggest asset, arguably above your clients. “People are the most important thing. Business model and product will follow if you have the right people,” says Adam Neumann, Co-founder of commercial real estate giant WeWork.

From an HR perspective, the loss of talent is a financial burden and a huge drain on resources due to the time and cost involved in recruiting, onboarding and training new hires. High staff turnover can also have a negative impact on team morale and productivity as existing team members may experience increased work demands. What’s more, it can spark concerns among team members which could stimulate a domino effect, in turn damaging the reputation of your business. Put simply, employee retention should be at the top of every employer’s agenda.

Lessening staff turnover – and its effects – isn’t straightforward.

3 common reasons why workers terminate their employment

1.Your employees feel poorly managed

There’s a saying (coined by Wendy Duarte Duckrey, Vice President of Recruiting at JP Morgan) that goes, “People don’t quit their jobs; they quit their managers”. It may be an ugly truth for an employer to confront, but when an employee hands in their resignation it’s important for HR to investigate how they were managed.

In a study[1] about employee retention, the Australian HR Institute (AHRI) asked its respondents which methods they believed to be most effective. Almost 70% of respondents believed that effective management and leadership was an important retention method, followed by a positive workplace culture (60%) and opportunities for career progression and promotion (42.3%). It is therefore crucial that companies adopt modern leadership practices and invest in coaching and development. This way, the dialogue between a manager and his/her team is positive and empowering and there is a mutual understanding and respect, resulting in better productivity and performance.

2. Your onboarding program is ineffective

Research from Bersin by Deloitte[2] states that 90% of new recruits will decide in the first six months of employment whether they will jump ship or stay with their employer. This means a business must quickly create a positive impression by effectively onboarding new starters.

Effective onboarding fosters comfort and connection for new employees, lowering the likelihood of early departure.

A 2019 study[3] states that “new employees typically take around 12 months to reach their full performance potential within a role”. It’s therefore crucial that onboarding programs reflect this timeline.

There is no quick fix or a one-size-fits-all approach – engaging and retaining Gen Zs, for example, is a whole different kettle of fish. Think of onboarding as a marathon, not a sprint – one that involves regular check-ins and learning and development opportunities. Don’t just list your company values on a slide deck. Integrate them into your onboarding process to make them real. Show rather than tell.

ELMO Onboarding software can streamline and simplify your onboarding processes to ensure your new recruits are engaged, empowered and well-integrated into your work culture.

3. You are not offering enough flexibility

Expectations around work-life balance have changed drastically over recent decades – not only in Australia, but worldwide. SEEK Learning’s study on work-life balance[4] outlined its four interpretations: flexibility in hours/location; work that doesn’t disrupt home life; no overtime; and the ability to time-bank.

Flexibility is becoming the standard, and employees expect some flexibility in their work schedules. Employees may consider employers who don’t respect the importance of work-life balance as antiquated and out-of-touch.

Flexibility in the workplace aids many modern-day lifestyle factors. For instance, a survey[5] by Household, Income and Labour Dynamics in Australia (HILDA) found that employee dissatisfaction can be attributed to long commutes. Aussies are now travelling longer distances to get into work (66 minutes on average in state capitals, as of data released in 2017), which means employers must exhibit greater understanding and consideration around flexible working to ensure their employees feel valued and appreciated (and are willing to make the journey into the office).

Recent stats show 75% of Kiwis are content with work-life balance, with 79% crediting satisfaction to flexible working hours.[6]

Businesses that fail to keep up with the changing social landscape and worker expectations may struggle to retain happy employees. Employees may look for new jobs that provide the flexibility they need to be happy and productive at work.

Read ELMO’s whitepaper on making flexibility win-win.

Workplace satisfaction translates into engagement – and eventually, employment longevity. It’s therefore essential that you look out for warning signs and confront any frustrations that your employees have head-on, so that you can address them quickly and efficiently. Ultimately, the more talent you keep on-board, the further your ship will sail.

ELMO Cloud HR & Payroll’s end-to-end solutions cover the entire employee lifecycle, from hire to retire. Addressing all key touchpoints that employees have with their employer, including recruitment, onboarding, performance management, payroll, rostering / time & attendance, and more, ELMO can help streamline people-management processes and automate tasks. By “giving time back”, ELMO enables you to concentrate on retention hot spots and building your workplace culture. To find out more, contact us.

[1] 2018 Turnover and Retention Report, AHRI

[2] “Onboarding Software Solutions: On-Ramp for Employee Success”, Bersin by Deloitte webinar

[3] “7 Problems with your Onboarding Program”, Gallup, 2019

[4] “Who has the best work-life balance in Australia?”, SEEK Learning

[5] HILDA Survey, Release 17, Melbourne Institute

[6] “Most Kiwis find good balance between work and home”, Stats NZ, 2019