Recent layoffs have disrupted lives and livelihoods, fueling fear and anxiety toward an uncertain future for those being let go. But for those good employees that remain, the bigger challenge is retaining them so they don't quit.
While pay is important (as you'll see below), money alone does not make for an overall positive employee experience. When you look at the evidence, three major reasons why good employees quit float to the top:
1. It's still the manager
The reason people may want to quit has everything to do with their relationship with their bosses. One study found that nearly half of employees surveyed had quit because of a bad manager, and almost two-thirds believed their manager lacked proper managerial training.
Gallup has determined from decades of data and interviews with millions of employees that 70 percent of the variance in team engagement is determined solely by the manager. Yet here we are in the post-pandemic age, and organizations that aren't doing massive layoffs continue to think of every strategy for retaining their workers -- from more pay, more perks, more flexible work options, and more mental health resources, to name a few -- without considering the role and impact that the manager makes on the employee. We've heard this tune before: People leave managers, not companies.
Among the many relationships employees will develop at a company, those formed with one's manager have a significant impact on overall workplace experience, even more so than one's relationships with peers.
More specifically, it is important that employees feel as though they have a supportive and open communication channel with their managers, to the extent that they would feel comfortable discussing topics such as compensation and their job.
Managerial acknowledgment is crucial and should be a priority for companies looking to retain their employees and avoid the high costs of turnover.
2. Lack of career growth
According to a study of more than 18,000 frontline workers across 150 companies, lack of career growth is the No. 1 reason for turnover. This may come as a shocker to the Amazons of the world that believe cash is king. Sure, pay is important -- it comes in at No. 2 -- but money alone isn't working. In the case of the supply chain workforce surveyed, people aren't looking to just clock in, clock out, and cash their checks. They are looking for meaningful work that helps them develop their skills and build a career path.
Many women in technology jobs also continue to struggle with gender-specific barriers. Research from managed services provider Ensono shows that women in tech still experience inequity and discomfort in the workplace (both remote and in-office), which prevents them from realizing career development.
While a desire for more learning and development opportunities isn't unique to female employees, it needs to be a key element of tech companies' plans to recruit, retain, and develop women. Sixty percent of women in tech roles in the U.S. said they've been told by employers that a lack of training or skills is holding them back. Yet many companies don't offer mentorship programs or paid courses for learning and development, leading employees to look for employers that offer training internally or fully paid coursework. With 20 percent of women saying they plan to look for another job within the next year, tech leaders would be smart to prioritize career development as a retention strategy.
3. Let's not forget the money
The Great Resignation has been a wake-up call. It forced leaders to accept that they need to understand their employees' needs and create people-first solutions. Top of mind for many organizations has been a commitment to revise their compensation structures.
According to the Career Optimism Index, a 2022 University of Phoenix survey of 5,000 employees and 500 employers across the country, one in three Americans would quit their current jobs without a backup plan, but 69 percent would consider staying if they thought things could change at their organization.
While many organizations are making significant investments to develop and advance their employees, the study shows the majority of employers are missing the mark on ensuring equitable compensation and financial security.
Eighty-six percent of employers think their employees are satisfied with their compensation, but nearly half of employees surveyed are unsatisfied, and 56 percent are living paycheck to paycheck.
Pay discrepancies and a lack of financial security have been major factors of job dissatisfaction throughout this volatile period. Employers must create greater transparency about compensation-related issues so they can get on the same page as their workforce-- and once they're there, employers must be prepared to act on improving compensation.
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