7 Employee Turnover Causes and How to Fix Them

PUBLISHED ON: 12 August 2020 / READING TIME: 5 minutes

What causes high employee turnover?

From being unsatisfied with working conditions to some personal issues non-related to work, people decide to leave for various reasons. If we notice that more and more people leave the company because of one particular issue that bothers them, we definitely need to do something about it so that it doesn’t cause a domino-effect.

What is an Employee Turnover Rate?

Employee turnover is the measurement of the number of people who decide to leave the company during a specified period of time (monthly, quarterly, annually).

To calculate an employer turnover rate, all you need is three numbers: the number of employees who left that month (L), the numbers of active employees at the beginning (B) and the end of the month (E). Add your beginning and ending workforce and divide it by two (Avg = [B+E]/2) to get an average number of employees.

Then, divide the number of employees who left by your average number of employees. Finally, multiply by 100 to get your final turnover percentage ([L/Avg] x 100).

Equation showing how to calculate Annual Turnover rate

We’ve compiled a list of the most common reasons why people decide to leave companies and offered solutions that should help you create employee retention strategies.

1. Lack of Development Opportunities

Salary is not the only reason why your employees would like to stay and build their career in your company. One of the causes of employee turnover is a lack of development. If your people do not have opportunities for advancement they will also decide to walk away and find a new job. In general, employees want to be able to develop both professionally and personally and move up the company ladder. This will give them enough self-confidence and they will feel they are thriving in every possible way.

What to do about it: You need to focus on building a culture that will enable your employees to gain extensive knowledge, learn new skills and progress on all levels. On the other hand, this will bring immense value to your business as well.

Women sitting in from of her two PC screens and thinking about new things she would like to learn to help her develop her career

2. Employees Aren’t Recognised for Their Hard Work

One of the causes for employee turnover is a lack of recognition. You can’t expect your employees to be enthusiastic and motivated to do their best at work if you take their efforts for granted and don’t show them that you appreciate what they do. Your employees need to feel that their work is recognised so that they would know they are moving in the right direction.

What to do about it: Create a recognition program which would allow you to sincerely and genuinely express positive thoughts and give a few words of praise to your top-performing employees. From a simple thank you note and spontaneous treats to bonuses and special awards, there is a variety of ways you can show your appreciation. Plus, this allows your colleagues to recognise one another, so everyone is invested in the process.

Man sitting in the dark by the window thinking about work

3. Toxic Company Culture

Another common reason why even the best employees decide to leave at some point is a toxic environment. Nobody likes to work in the company culture that sabotages morale, scares away new talent, and actively drives away its people. Even your highest-paid employees will run away if they feel that their stress level is increasing and their health is jeopardised.

What to do about it: If you see that your employees have frequent mood swings and seem to be going through the motions, you can use a simple happiness survey tool like Heartcount to find out how they feel and what they think in real time. In this way, you will gather valuable information you can then use to make decisions and act on the results. By having an insight into your employees’ level of happiness at work you will be able to make positive changes and ultimately decrease your employee turnover causes.

To learn more about how Heartcount can help you retain your employees and build a culture of happy and engaged people, feel free to reach us out.

4. Being Overworked

One of the frequent terms in today’s working environment is “burnout”. Due to the heavy load of work most companies face on a daily basis, many people reach the point of breaking as the reaction to the prolonged job stress. Put simply, if they start feeling exhausted and hating their job and if they feel less capable to do their job properly, they are experiencing burnout. This stress mainly comes from the job, but can also be caused by some personal issues. Stress is ultimately the biggest cause of high employee turnover.

What to do about it:

What can you do to stop this train from speeding down the tracks? Instead of removing yourself from the situation, for the time being, it’s crucial that you give this some thought and help your employees really make some changes. Here are the two things your employees need to work on:

  • Changing their workload
  • Consulting you regarding the issues that bother them

Instead of choosing not to see the elephant in the room, try encouraging a new fresh attitude among your employees. Talking to your employees or motivating them to approach you when there’s a heavy workload they have to deal or when some other problem arises is a surefire way to help them find a solution and reduce burnout. In this way your employees will become more efficient and productive.

5. Hiring Employees Who Are Not the Best Fit for the Company

Today, entrepreneurs find it hard to find human resources that would perfectly match their business requirements. People with a better understanding of their work, great skills and extensive knowledge can contribute to the company’s success and bring it to a whole new level. Unfortunately, many company owners take that process for granted and hire people that do not have the right skills for the given position because of their availability or salary demand. It turns out that the company invests a lot of its resources into training them and when they are satisfied enough, they start looking for a new job. This leads to one more in the sea of employee turnover causes.

What to do about it:

Here are a few things you should consider before hiring talent:

  • Qualities matter more than numbers - learn more about their qualities and look for their behavioural aspect that would tell you more about their values and education.
  • Check if they fit your company culture - before deciding whether to employ a certain employee, pass them through the test that should help you determine their ability to fit into the organisation.
  • Communicate your expectations early and clearly - during the interview with a candidate, ensure that you give them enough information so that they would know what is expected of them.

6. Incompetent Managers

Someone once said: “People don’t leave their jobs, they leave their managers.” Numerous studies emphasise that people mainly decide to leave their jobs because of the bad relationship they have with the people they work with, especially managers. When managers do not have adequate knowledge and are incompetent, they tend to turn to other mechanisms to gain and maintain authority. And, this is where problems may arise. Bad temper, controlling behaviour and poor judgement can drive the best people away leading to the brain drain.

What to do about it:If you realise that more and more people are leaving your company you may consider the possibility that the management is doing something wrong. In such a scenario, you should have a talk with management and see where there is room for improvement. On the other hand, if you realise that some managers simply don’t know how to manage a workplace, you may have to decide whether the job is worth the people.

7. Little or No Opportunity for Decision-Making

One of the things that can kill employees is micromanagement. Instead of nurturing employees’ strengths, micromanagement creates a huge gap between managers and employees causing both sides to feel unsatisfied with their job. It is deadly on so many levels. It kills enthusiasm, increases stress, and leads to reduced productivity.

What to do about it: Instead of creating a culture of micromanagers, focus on a more productive leadership style. Include your employees in goal-setting, allowing them to participate in decision-making. This will trigger their creativity, boost their interests and spark innovation thus leading to better results in the long run. Build trust with your employees and let them show their maximum potential.

Man looking out the window at working while thinking about work decisions

Wrap Up

Knowledgeable people with the right skills and ability to fit into the working environment are the movers and shakers who can build a thriving company culture. In other words, they are our biggest values. So, if you want to build a business environment with a low employee turnover, you need to focus on your employees, their needs and requirements. Not only will this create a culture of happy people but it will also bring numerous benefits in the long run.

By Milica Jovic Partner & Chief Heart Officer at Heartcount

Milica is on a life mission to prioritize happiness at work as the ultimate goal for all companies.

Get a quote

Heartcount is an AI powered tool, which measures happiness at work in a new and better way. It is a tool for tracking results and relationships (personal fulfilment, progress, relationships with colleagues and managers) that influence happiness at work.

Nice to meet you!

By clicking "Submit" I agree to HeartCount's Privacy & Policy