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But why are your employees REALLY leaving?

A friend of mine from my university days, who is now running his own tech company, recently reached out to me. He was really struggling with turnover in his organization and wanted some advice on how to “get to the bottom of things.” (No, he doesn’t have an HR department – but that is a separate discussion). This issue of escalating turnover was all new to him because during the growth phase and into the stability phase of the company everyone was excited and engaged and now that the company is more established (going on 10+ years now) he is seeing his voluntary turnover rate rise. Before, he used to pride himself on knowing his employees and what was going on with each and every one of them, much like many hands on entrepreneurs do. However, now that his company is north of 200 people, he can’t quite keep tabs on everyone in the manner in which he was accustomed to.

ExitI asked him if he had any idea as to why they were leaving his company. Mike* (not his real name) told me that he was “pretty sure” it was all about the compensation. Because he is still a smaller development shop (relatively speaking), his larger competitors are able to throw bigger dollars at his people. He felt everyone was happy with the company but it is hard to say no to big pay increases. When I asked Mike what data he had to substantiate his theory, he indicated that he didn’t really have any, other than that is what the employees are telling him (and their managers) when they give their notice. Mike, like many other organizational leads, made the classic mistake of falling for the softest attrition reason that departing employees give you.

When your employees tell you they are leaving, try as you might, managers and leaders take it personally. Employees know that they don’t want to burn any bridges, so the most palatable reason given for leaving is “compensation.” Compensation is tangible and easy to understand. When a manager hears that as the reason for separation, than it is easy to understand and wrap their heads around. It makes sense. There is no emotion attached to it. It is just more money, so who could fault them for that?

Here is the thing, based on my completely unscientific research, nine times out of ten, the primary reason for departure is NOT compensation. This typically only happens when someone is so grossly underpaid – based on internal AND external comparators – that they jump for more money because they feel disrespected.

Typically though, you need to dig deeper. There are several ways to find out why people have left or might be leaving:

1) Exit interviews – conducted by HR, or some other confidential service, can often give you some more tangible data as to the “why’s.” You might need to put on the detective hat and read between the lines a bit, but if done right, there is usually some good information in exit interviews that will give you some insight as the reasons for employee departures. The only problem is that the proverbial horse has left the barn (i.e. your employee is already gone) when you get this information.

2) Stay interviews – similar to the approach with exit interviews, except they are done with employees who are still with your company. Find out why they stay with you or better yet, what might cause them to leave. Ask employees what is working now and what isn’t working. Look for the trends and themes across offices and departments.

3) Employee Pulse Surveys – not so much the surveys themselves, but the focus groups you have afterwards to help comb through the data. Listen to what your staff is telling you. Read between the lines and look for the trends.

4) Coaching sessions and performance reviews – train your managers to truly listen to their staff. Regular coaching sessions are a great opportunity to engage in candid dialogue about how things are going. If, all of a sudden, your coaching sessions take on a more negative tone (coming from the employee) something is amiss. Ask questions and don’t settle for face value responses like, ‘everything is fine.’

5) Talking to people – yes, just casual everyday conversation can quickly give you a feel for the pulse of the company. This is the classic management by wandering around approach. Talk to people in the lunch room or out on the shop floor/operational area. I once had an employee relations manager who used to work for me who always had the latest gossip, news and insight at to what was going on with employees. Her secret – she was a smoker! No, I am not promoting smoking; however, if you have a smoker on your HR team, make sure you are getting the scoop from them because odds are, they are in the know on things!

These are few quick hit ways to get some more insight into the “pulse” of your organization and drivers of dissatisfaction. Regardless of what managers and organizational leaders might think, the REAL top reasons why your people leave are typically things like: (please note – completely unscientific survey alert again):

1) Their Manager – who is either a tyrant, doesn’t support them, is unreasonable to work for, is inflexible, doesn’t provide feedback or is completely apathetic.

2) Poor Communication – from their manager and/or the head of your organization. Perhaps it is a lack of visibility, lack of a clear organizational vision for the future or just plain lack of communication in general about company business. Either way, poor communication leads employees to feel insecure about their jobs and causes them to look elsewhere.

3) No growth and development opportunities – employees who are stifled in their roles and don’t have any opportunity to grow and develop will leave. Companies must be careful not to keep well performing employees in the same role year after year after year just because it works for the company. Employees want to grow, develop and learn. You either provide them the opportunity to do so, or another company will. This also ties in with a lack of feedback from their manager. If managers aren’t providing regular performance feedback to their staff, they will feel like they aren’t being developed as well. In turn, they too will leave because of this.

4) No recognition or rewards – aside from their salary, employees want to feel recognized and rewarded for their work. If organizations fail to recognize good performance (beyond salary increases) and provide effective rewards for exceptional performance, employees will leave. Bottom line, employees want to feel that their company is invested in them and that their performance and discretionary effort is recognized AND rewarded.

So, the next time you start digging into why you are experiencing turnover, you need to ask yourselves, “Why are they REALLY leaving?” Use the above mentioned methods to validate your hypothesis as to the “why.” You may be surprised at the results. Better yet, use the above methods to poke holes in your theory and see if it still applies. That is how you REALLY know why your employees are leaving. As always, I welcome your comments and feedback.

Image courtesy of Naypong/FreeDigitalPhotos.net

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4 Responses

  1. Scott, as always a good read and good advice. I will add one observation based on my own experience. As a company grows the culture will change, no matter how much you try to retain that “small company” feel. Some people will just not be comfortable in a larger organisation, which will cause SOME to leave. Increased structure, a different boss and less access to the founder will all be catalysts that may cause some people to head for the door.
    As the founder it becomes increasingly difficult, as he mentioned, to stay close to everyone and that is just a reality.
    All your other ideas are great, and a conscious focus on creating a company culture that works are important. It won’t stop turnover, but it will attract good people and hopefully reduce turnover.
    Cheers
    Kevin

    • Kevin you are exactly right – the change from small company feel to a larger one isn’t for everyone. There is no way to stop turnover, but keeping it at a manageable level is key. In this case, the organization was experiencing spikes in attrition long after they had “evolved” from a smaller to a more medium sized organization. As it turns out, their issues are more with communication from management. My friends Director team was not cascading information to line staff as freely as he had thought. Lesson learned on his part…he is going to immerse himself in the lines of business a bit more to re-establish that connection and show the Director team what his expectations are. Thanks Kevin!

  2. Scott great article. I have been performing training with many local organizations and I could tell you the biggest obstacle in Nova Scotia is luck of responsibilities, accountability, and ownership. If any organization start paying attention to those three they will be able to become more effective. Everyone heard about listen to your employees, exit interviews, employee pulse surveys etc. As many organizations grew and start changing an internal culture, luck of coaching and management trust becomes highly visible. How to fix it? Improve communication, empower and coach, revise job responsibilities every two years, and pay attention what employee isn’t saying. In my opinion one common term used by many employees in NS is “overwhelmed”.

    • Thanks Zoran. In many organizations there is an accountability issue. What happens, as you have noted, is that those employees who truly care pick up the slack created and they in turn become overwhelmed. I am more a fan of setting performance based goals vs. coming up with a list of responsibilities, etc. That way, you as the employee know what the goals are and how you are measured. You are supported in achieving those goals through effective performance coaching from your manager. I know this is a bit of a utopian vision; however, I think that it is what companies need to strive towards.

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