Why Voluntary Turnover Occurs

There is a saying that people usually leave an organization because of their boss not their job. In my management and leadership learning and development work, I find an appropriate time to make this statement and then I ask for a show of hands of those who agree with me. Many in the group immediately agree with me, but often there are a few holdouts who do not.

I then follow up with a question to the group, How many of you have left a job you enjoyed because of a problem with your boss? If the group has been working for any length of time, I generally win the holdouts over to my perspective. Many professionals can remember that time when they made that difficult decision to leave a job they liked because of a continuing problem with a boss for which resolution did not seem possible to them at that time.

Business anecdotal experiences, while powerful, have limited impact if they cannot be connected with the financial, bottom line, however. Fortunately, human resource professionals and management consultants have a powerful metric to make their point–voluntary turnover.

The Cost of Voluntary Turnover

While voluntary turnover (the exiting of people from an organization on their own accord) is a normal activity, all employee turnover is expensive to an organization. As noted in the recent Training & Development article, Warning Signs of Turnover Waiting to Happen, turnover costs can range from 93 to 200 percent of an exiting employee’s salary. Advertising, relocation, onboarding, training, and the staff time recruiting and selecting new employees are just a few of the costs associated with replacing employees who leave the organization. This does not include the substantial costs of lost productivity and other indirect administration.

Given these metrics, it makes sense for organizational leaders to reduce all employee turnover costs (voluntary or otherwise)–particularly when this turnover means the organization is losing its superstar employees to other firms.

This brings me back to the point that voluntary turnover is generally caused by poor employee/boss relations.  Recent research shows why this point is true.

What Managers Can Do to Reduce Employee Turnover

A classic three-year study conducted by Sirota Survey Intelligence, Predicting Pent-Up Turnover, of one of their clients found the top 9 drivers for employee commitment and retention were the following:

1. I feel my career goals can be met at this company.
2. I feel a sense of belonging at work.
3. My work gives me a sense of accomplishment.
4. I am paid fairly.
5. Senior leaders treat employees as valuable assets.
6. People are rewarded for their performance.
7. I can balance my work and life.
8. I receive recognition for my accomplishments.
9. My supervisor supports me.

The interesting fact about this list is that many of these 9 drivers are directly related to the ability of senior leaders and operational managers to create an environment that inspires employees to put forth their best efforts.  These findings in the Sirota Report are not new.

An earlier classic report by Kelton Research has similar findings.  (See my earlier blog post, What Managers Can Do Now to Motivate Their Employees for more information on this earlier research.) The inability of senior leaders and operational managers to both communicate effectively and create a working environment that fosters employee motivation drives up the rate of voluntary turnover.

So, if you are a manager you can reduce voluntary employee turnover in your area, by adjusting your leadership style to support these 9 drivers.

What Organizations Can Do Now to Reduce Organizational Turnover

There are several steps organizations can take to minimize voluntary turnover in normal organizational practices including the following:

Require Managers to Communicate Regularly with Employees

This is not solely top-down directives and organizational updates.  Rather, it is two-way communication that includes a significant amount of time asking questions and listening.

Provide Both Intrinsic and Extrinsic Organizational Rewards

Numerous surveys have shown that extrinsic rewards alone–like salary, bonuses, benefits–are insufficient to keep employees motivated over the long-term.  These external rewards are certainly important but they lose their value if the work and the work environment is lacking.  An effective motivational strategy is one where senior leaders and managers find ways to make the work and the work environment rewarding.  This intrinsic reward is something the employees can continually receive as they complete the work.  It includes factors such as having a say in operations, being recognized for good performance, and having a supportive boss.

Find Ways to Support Employee Career Goals

While it is always sad to lose good people, voluntary turnover is a regular occurrence of business. Employees stay longer, however, when there is a payoff for their career goals.  Providing opportunities for employees to learn and develop new skills and obtain valuable working experience are proven methods for supporting employee career goals.

View Training and Development as a Necessary and Regular Expense of Doing Business

  In times of economic difficulty, organizations have to actively resist the temptation to eliminate or drastically cut training and development funds. While every part of the enterprise has to bear its share of cost cutting in times of financial difficulty, thoughtful reductions of training and development activities have a better payoff than do short term drastic cuts.

In fact training and development is even more critical as organizations face difficulty.  The organization’s human capital will have to keep the organization afloat in times of stress and uncertainty.  Retaining some funds for training and development is a wise investment not only for the immediate difficulties the organization faces but also to remain viable in the future.  Employees who feel battered and neglected often look for better opportunities elsewhere when the economy improves.

In summary, it is true that employees usually leave their bosses, not their jobs!   Senior leaders and operational managers can resist this trend by (1) communicating effectively, (2) using the 9 drivers as a guide to creating a supportive work environment that fosters employee motivation, and (3) linking business needs to employee career goals.

Video: How to Reduce Employee Turnover