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Employee Exodus: Why Employees Leave and What HR Can Do About It

Posted by Eric Friedman

Gone are the days of the loyal employee working decades for the same company. The “company man”, who worked for the same company his entire career, is a thing of the past. Employees today last only a fraction of their careers working for one company, choosing instead to change jobs, experiment with different work concepts, and even work for themselves.

Who is to blame?

Employee turnover is a real problem that impacts every company. Playing the blame game when it comes to employee turnover will result in having both employers and employees to blame.

In the early 20th century, employers rested easy knowing their workers would gladly stay with them forever so long as they got fair wages and treatment. Employees knew they had job security staying with the same employer, while counting on unions to protect their rights.

Today, companies can’t guarantee the lifelong stability they once did. Economic instability (just think of the 8.8 million jobs lost in the U.S. after the 2008 recession), changing corporate strategies, and the need for cutting-edge tech skills are all factors that can affect a company’s ability to keep the same employees for years. Not to mention the challenge of fostering a company culture that competes with the likes of Google and Facebook, no matter the industry.

Employees are to blame, too. Workers have become more independent, seeking job changes that serve themselves instead of a company’s greater good. Technology has also played a role in providing opportunities they never had before, like teleworking, which leads them to seek companies that provide this flexibility.

Why are more people changing jobs?

There are a variety of factors that lead employees to leave their jobs for other opportunities:

  • According to the U.S. Census, only 5% of adults held a bachelor’s degree or higher in 1940. By 2015 the percentage increased to 33%. This increase in education has led to more choices for employees who have college degrees.
  • The workforce itself has changed generations. Approximately 34% of the workforce are now Millennials. This shift truly begins to matter when you look at this generation preferences and aspirations. The 2016 Deloitte Millennial Survey notes that 44% of Millennials say, if given the choice, they would like to leave their current employer in the next two years. Another big shift? Some 75% of Millennials would like more opportunities to work remotely.
  • Speaking of working remotely, this flexible work option has increased from 9% to 37% in the span of twenty years, according to Gallup. More employees are looking for employers that offer the chance to work from home, not just as a once-in-a-while luxury, but on a full-time basis.
  • And what’s making the shift from office to home (or wherever) work possible? Technology. According to KPCB’s 2016 Internet trends study, there are 3 billion Internet users in the world (that’s 42% of the world’s population) and 2.5 billion smartphone users. The Internet is much faster and reliable globally, allowing people to work virtually anywhere. In this way, technology is giving employees more incentives to change jobs for one that fits their lifestyle.
  • As if competition with other companies wasn’t enough to blame for employee turnover, now companies are competing with the employees themselves. More than 40% of the U.S. workforce works or has worked as an independent at some point in their lives. Employees are not only leaving for opportunities at different companies, but for the opportunity to work for themselves.

What can HR do about it?

Although employee turnover seems bleak at times, there are some things that companies can do to drive employee retention:

  • Offer more advancement opportunities. Many employees leave their jobs because there’s no chance of upward mobility for them. It’s better for their careers to look for growth opportunities elsewhere.
  • Provide training for professional development. When employees are bored and unchallenged at work, their eyes start wandering to other companies. Keep them engaged through training that will teach them new skills, and help grow their professional development.
  • Foster a rich and enjoyable company culture. Happy employees are more likely to stick around. Offer an environment that promotes creativity, transparency, and positive work ethic to keep employees in a positive frame of mind. If you can swing it, a few perks here and there—like a monthly free lunch or on-site gym—wouldn’t hurt either.
  • Consider work/life balance. Today, more employees are concerned with better balancing their work and home lives. Flexible working options like remote work or 10-hour workdays in exchange for no-work Fridays are ways employers can provide employees a more balanced work experience.
  • Hire smarter. In the end, better hiring decisions yield employees that better fit with the company culture and goals. When it comes to employee retention, pre-employment skills tests can help you hire the candidates that are most likely to succeed on the job and, therefore, stick with you.

How to decrease employee turnover while improving employee retention is a matter of concern for any HR department. Are there other ways you have tried to improve your employee retention rates?

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About Eric Friedman

Author

Eric Friedman is the founder and CEO of eSkill Corporation, a leading provider of Web-based skills testing for pre-employment and training. With academic degrees in Psychology and Business, and experience with both mature and expansion-stage company growth, Eric has focused on how best to hire and motivate team members to be the best they can be for their companies.

3 COMMENTS Join the discussion
  • Lisa P. February, 15, 2017

    I loved your article. Thank you. This is indeed a big challenge for the HR department. I think that in order to prevent employee exodus, we can implement in the organizational culture the flexible working time. The new-age employees are looking for flexibility and freedom. This way, they can feel free and work in their own rhythm without feeling trapped in the “rat-race”. Best, Lisa.

  • Robert M. February, 15, 2017

    Reading your article made me think a lot about how we can improve our retention process. I believe the challenge comes from the fact that people want to evolve, and many prefer to work for themselves after a point in life. This morning I was talking to my father, who has worked 20 years as an employee and 20 years (and counting) in his own business. When I asked him if there is anything he would do different, he told me “open my business earlier.” Now, if we think of how we can use this attitude in order to keep our employees, I believe it is pretty simple: we could offer stakes in the business if the employee stays with us for a certain period of time. Really nice article.

  • Kamelia O. February, 15, 2017

    Thank you for your article. I think the most important thing to do here is “hire the right people.” I know people who stayed with the company from the internship stage to the management stage, for 20 years. Perhaps, these cases are seldom, but it is worth investing in a pre-employment tool in order to help you decide easier who is right for you. And who knows, if you also have a good career path developed (with good bonuses along the way), you might keep your people for 20 years. :)

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