Why Are Employees Leaving Their Jobs?

By now, we are all familiar with the Great Resignation. Even as the labor market shows signs of continuing improvement, as many as 40% of employees are thinking about leaving their job.

Remote work; compensation; and diversity, equity, and inclusion (DE&I) initiatives are among the leading factors that can make or break your company’s retention goals for the year. While there is never a surefire way to keep employees happy, many aspects of these factors are within the control of executive leadership.

So, what areas or issues within your own organization may be prompting some employees to consider new job opportunities elsewhere or to fully leave your company? Understanding these issues is the first step in being able to address them, whether it be reevaluating current policies, shaping new programs, or adjusting your company’s stance on remote work—all of these factors contribute to a happier, more engaged workforce.

Remote Work

The rise of remote work during the COVID-19 pandemic has greatly changed the working landscape and employee expectations of flexibility. Before the pandemic, only 1 in 67 jobs was remote. Today, that number is closer to 1 in 7.

Remote work and greater flexibility may have been necessitated by the pandemic, but employees are now more unwilling to lose them even with COVID-19 restrictions subsiding. According to a recent report released by Slack, an overwhelming percentage of employees want greater flexibility in both their work location (76%) and their hours (93%).

Work-From-Home Flexibility and DE&I

Female employees and people of color highly value remote work options. Of those surveyed, 87% of Asian respondents and 81% of black respondents want flexible or hybrid work options compared with 75% of white respondents. Additionally, 85% of women currently working fully remotely want flexible or hybrid work compared with 79% of men. Flexible work has become more than just a perk; it’s a top priority for employees, with real implications for a company’s culture, including DE&I initiatives.

The Executive Stance

Despite this growing demand for more flexible work options, there’s a big disconnect between senior leadership and employees. Slack’s report shows that 75% of executives surveyed who currently work remotely want to return to the office 3 to 5 days a week, and 44% want to return to the office full time. In contrast, only 34% of employees want to return to the office 3 to 5 days a week, and even less (17%) want to come back full time.

This friction between leadership and employee expectations has also played out on a public stage. After some large companies announced their expectations that workers return to the office full time, many workers responded by expressing their concerns openly, demanding greater flexibility in their work environment. Some companies have since responded to employee concerns by delaying plans for a full return to the office and are opting for a hybrid workweek, outlining a specific number of days to be in the office versus remote.

The Downsides of Remote Work

While the desire for flexibility should remain top of mind for employers, there are other factors of remote work that can lead to employee turnover. Remote work allows workers to search for jobs beyond their geographical location without the need to relocate. No longer are employers just competing for workers with local companies; now, they may be fighting over talent with an organization on the other side of the country.

There are instances in which the presence of remote work policies can be a detractor if they aren’t executed properly. Remote work can sometimes make it more difficult to build an office culture where employees feel connected and engaged in the company. This, combined with an inability to successfully onboard and train employees remotely, could lead to greater turnover even in companies attempting to embrace a more flexible work environment.

Remote work policies can be a real balancing act. Many employees are prioritizing flexibility in their job search. But remote policies must be well thought out, and companies must be willing to put the necessary resources into training, onboarding, and continually engaging remote workers. Without this support, turnover is very likely.

Fair Compensation

Flexibility, benefits, and an engaging culture may be important to employees, but compensation often is their top priority. While providing competitive compensation has always been critical for employers to do, workers are now looking at a labor market that works to their benefit. If they believe they are being inadequately compensated in their current role, the odds of their finding a better position elsewhere are in their favor.

With more open roles than eligible talent, employers need to ensure they aren’t losing their employees to greener pastures. This may mean reexamining compensation and benefits packages to ensure they align with the current market rates and meet employee expectations. 

The Inflation Factor

It’s no secret that the average American household has been finding it harder to make ends meet in recent years. Between pandemic-related supply chain issues and the war in Ukraine, inflation hit a 40-year high in June 2022. So, even though most U.S. employers expect to raise salaries 4.1% in 2023, this increase will likely not make much of a dent in employee expenses.

More Than Just Money

Some companies are offering retention bonuses or other incentives in an effort to keep employees. Thirty-six percent of employers surveyed by a leading insurance advising company indicated they plan to increase salaries twice per year moving forward. And 60% plan to give more emphasis to their DE&I efforts, which is another major factor in employee retention.

Diversity, Equity & Inclusion and Social Responsibility Efforts

Company-sponsored DE&I efforts play a big role in impacting company culture and are important to both new hires and long-term employees alike. Employers that embrace diversity foster work environments where employees feel safe, respected, and connected. When employees feel a sense of belonging, retention rates rise, and teams are more motivated to produce high-quality work.

Companies across many industries may even experience a competitive advantage after rolling out DE&I initiatives. Diverse viewpoints yield work that reaches a broader audience and can result in fresh solutions that address a range of challenges. In fact, businesses with ethnically diverse executive teams are 36% more likely to outperform financially when compared with companies where leadership is not as diverse.

Employees want to know a company’s values, and many expect companies to be vocal about what they believe in. A recent Gartner report shows 68% of employees would consider leaving their current company for one that is more overtly dedicated to sharing its stance on societal and cultural issues.  Employees may be more likely to gravitate toward a company they feel has values that align with their own.

Staying neutral on trending social issues may not be the safe choice it once was. Large brands like Apple, Nike, and Amazon have all come out in support of social issues ranging from LGBTQ+ support to recognizing racial inequality to promoting sustainability. More and more, jobseekers are factoring in the perceived politics and values of a company when deciding whether to join or continue working for it.

To get a better pulse on the views of employees, employers can conduct surveys and assess DE&I offerings based on those results. From there, you can determine how to better align your company culture and values to those of your employees. This may mean taking a more public stance on certain issues or revamping internal DE&I efforts to meet employee interests. 

Understand Employee Turnover to Improve Retention Rates

The best way to know where your company stands with turnover is to calculate your retention percentage year over year. Once that step is complete, you can try to identify the potential causes and ultimately make improvements to your business that will make employees want to stay with your company for years to come.

This article was taken from an excerpt of Aston Carter’s latest white paper, The Disconnect Between Employers and Workers: Strategies for Improving Employee Retention and Engagement. Read the white paper to get the full picture of why employees seek work elsewhere, how you can monitor turnover, and how to help them stay.

As director of recruiting operations, Kate Gossett leads and develops Aston Carter’s regional strategic recruiting teams. With over 14 years of experience, she specializes in developing and executing market-focused recruiting strategies and continually improving workforce solutions for the company’s customers.

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