Contact CBJ

3 Causes of High Employee Turnover Rates

By Roberta Silverglate, California Business Journal

High employee turnover rate is a common challenge among employers. As organizations struggle to attract top talent, understanding the various factors that drive valuable team members from the company is crucial. Employee turnover isn’t just a numeric metric. It is a culmination of various workplace conditions. Below are a few factors that contribute to high employee turnover rates and how employers can avoid them.

1. Inadequate Compensation and Benefits

Below market-range salaries are the number one reason employees quit their positions. Employees are constantly looking for fair remuneration that matches their skills and abilities. As a result, they are naturally inclined to explore alternative opportunities if compensation in their current position is insufficient.

It is normal for employees to compare their salaries with the market rates and industry standards. If an employer or organization falls below the market rates, employees feel undervalued and will highly consider offers from companies with better pay. Lack of performance-based incentives and an overall benefits package, like retirement plans, also make an organization less attractive.

Employers should regularly evaluate their compensation packages and adjust accordingly. As an employer, your compensation should align with market rates and industry standards. Having a well-structured employee benefits management plan can help minimize turnover rates caused by inadequate remuneration.

2. Poor Leadership and Management

Employee turnover rates are also currently high due to poor organizational leadership and management. The quality of leadership in an organization directly affects employee satisfaction and willingness to remain in the company. Poor leadership manifests in many ways.

However, the most common sign of poor leadership is communication breakdown. Clear and effective communication is the backbone of successful leadership. Unclear communication often leaves employees uninformed, confused, and frustrated.

Micromanagement is the other sign of poor leadership. Overbearing leaders stifle employee autonomy. This shows your employees that you don’t trust their abilities. As a result, they will start looking for opportunities where their skills are valued, and there is space for them to flourish.

Unfortunately, there is no simple way to address poor leadership. However, a change in organizational leadership structure may help. Leaders should also encourage open communication.

3. Limited Career Growth Opportunities

Limited career growth and development opportunities are the other main contributors to high turnover rates. Employees will search for new opportunities if they lack avenues for personal growth. Employees become bored and disengaged if their current roles are static and offer very little growth potential. This fuels their desire for dynamic and challenging opportunities elsewhere.

Employees will also leave if there is no clear career path. Unfortunately, most organizations don’t provide a transparent career path for their workforce. This leaves them uncertain about their future in the company. Employees explore other options if they can’t visualize a clear advancement trajectory from their current positions.

Organizations and employers should offer career advancement opportunities to their employees. This includes training programs that help them identify career paths and promote a culture of continuous learning within the organization.

Endnote

High employee turnover rates are a complex phenomenon influenced by various interconnected organizational factors. Employees can’t remain in an organization that doesn’t have proper leadership. Similarly, they won’t last long if they earn below the market rates.