Think your employees are in it for the long haul? According to the U.S. Bureau of Labor Statistics, there's an expiration date on how long your team will stick around. As of last year, the median number of years that wage and salary workers had been with their current employer was 4.6. And that number is not growing, signifying that employers are not finding meaningful ways to increase employee retention.
And there's more bad news: You can expect to pay 20% of an employee's salary to replace them. That can add up if you're experiencing rapid turnover with little signs of stopping.
But have you ever wondered why your employees are jumping ship? Money actually has little to do with it, and the reasons for high turnover may surprise you.
1. There's No Hope of Career Development
Whether running a startup or trying to grow an existing business, bosses all claim to want the same thing: innovative and talented employees. But are you really inspiring your employees to thrive? Micro-managing your talent to death and expecting them to just follow the rules (your rules) is not innovative or motivating. And you don't need talent to do that.If you want button pushers who will only think inside of the box you've designed, then don't bother with top-tier employees who are looking to grow their careers. Just find button pushers. They're less expensive and are less costly to replace when they leave for greener pastures.
But if you really want exemplary employees who are hoping to grow with your company, focus on their career development. Consider training your best employees to become your next managers--I dedicate an entire chapter to this very idea in my latest book on People Management.
This isn't that difficult, and there are a handful of ways to go about it that can fit into the existing structure of your company. Offer tuition reimbursement, free training on new software and systems, or hold regular meetings to discuss each employee's career trajectory, and how to get there. You can also send your employees a message by turning to them first when there's an opening.
Even if you end up going with an outside hire, don't automatically shut the door on employees who are hoping to rise up in the company and tackle new responsibilities. Otherwise, you'll end up with a mass exodus of employees who realize they're going nowhere fast by sticking with you.
2. They've Lost Confidence in You
Fine-tuning your recruiting, interviewing, and onboarding process can weed out mismatches between employee and company chemistry. Once you've figured out the process, the chances of employees quitting simply because you're a "bad boss" are dramatically reduced. So if you're not a bad boss, then why are employees looking for jobs with your competition? The answer isn't an easy one to swallow: They've lost confidence in you or the company.
Take a look at the underlying tone of your meetings and the events going on at your company. Are you constantly changing core philosophies and company culture, or pivoting from one strategy to the next? Your employees will quickly lose faith in your vague mission, and no longer feel vested in your company's success without a confident leader in place. Get your business organized and focus on streamlining your departments and best practices before asking your employees to tackle yet another change that falls flat.
3. There's No Freedom
It's no secret that the millennial workforce demands freedom from their careers. They may express it through a desire to work at home, have more flex time, or the option to take personal days as a means to achieve the ultimate work-life balance. But other workforce generations actually crave the same thing. Gen X workers are adaptable and independent, but want the autonomy and flexible work hours to get there instead of being micro-managed. Meanwhile, an infographic by AARP showed that Baby Boomers want a flexible work schedule too, whether to spend time with family or to take one step into partial retirement.
Approaching freedom with a one-size-fits-all approach across multi-generational employees won't work. Instead, give employees the freedom to be the best they possibly can, regardless of why they want or need flex time. That freedom should also extend to the ability to explore new projects, tackle new responsibilities, and present new ideas.
4. You Only Care About Yourself
Are you growing a vested team, or just growing your bank account? There's nothing wrong with doing both, unless you're spending all of your time focusing on yourself instead of what's going on with your company. Business owners who are constantly absent, never give feedback, and want employees to work around the clock at a moment's notice are not revered by their employees.
Instead, show your team that you care about their career path, their contribution to the company, and working together towards success. Don't be above doing the same things you expect of them, whether that's working occasional weekends or attending less-than-popular meetings. You can still be the leader of your company while establishing that you're part of a thriving team.
5. There's No Purpose
Employees will quit if they're never getting raises or seeing career development, but that's not the only reason they're leaving. Whether you have a team of millennials or multi-generational workers, they all crave purpose. Your company should have a purpose beyond profit. If your company has no long-term focus or isn't making a contribution to society, you're unlikely to attract vested employees. So what do you do if you aren't sure what your company's purpose is? Create one.
The purpose of your company can be to turn a profit, but make it bigger than that. Commit to donating part of your revenue, hours, or skills to a charity in need. Instead of just launching a SaaS, focus on innovating ways your industry can make people's lives easier. Create a company that supports a flexible lifestyle, a company that people love working at and respect doing business with. Make it your mission to change the workforce, one happy employee at a time.
What other reasons can you add to the list of why employees are looking for other jobs? And what you can do to reduce turnover? Let me know by leaving a comment below.