Stop the Revolving Door: How to Reduce Employee Turnover Now

Discover the seven reasons people most often leave their jobs – & how to address them to avoid the costs of a high staff turnover

January 17, 2023
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Employee turnover costs are more expensive than you think.

First, there’s the cost of replacing your outgoing employees – which typically comes in at around 20% of their salary when all's said and done. 

Plus, organizations with higher turnover rates have lower employee engagement levels. And since businesses with highly engaged employees outperform their peers by a massive 147% in earnings-per-share, poor staff retention rates can really add up.

Read on to get to grips with the four types of employee turnover – and the seven reasons people most often choose to leave their jobs. This will help you keep your annual turnover down and retain as many of your top performers as possible.

What are the four types of employee turnover?

Employees are going to leave your business for all kinds of reasons. But they can typically fall into four categories:

  • Voluntary turnover is when an employee chooses to leave their job.
  • Involuntary turnover is when you ask an employee to leave, either due to poor performance or a restructure.
  • Retirement is a big contributor to staff attrition in some industries but a minor one in others.
  • Internal transfers – when an employee takes on a new role in a different department in your organization – is still classed as a type of turnover, even though you’re not losing that employee. The reason being is that it’s well worth getting to the bottom of if they were escaping the team they left or enticed by the team they’ve joined – and why.

What are the top 7 reasons for turnover?

Recent research by McKinsey revealed the top reasons people from around the world have quit previous jobs.

Here’s a closer look at the top seven reasons people told McKinsey they’ve jumped ship so you know what to focus your retention strategies on:

  1. Lack of career development opportunities

Once an employee feels like they’ve hit a glass ceiling in your organization they don’t usually take long to hand in their notice. In fact, a massive 41% of workers surveyed by McKinsey say they’ve quit a previous job due to the lack of progression opportunities.

If outgoing employees say a lack of career opportunities is what pushed them out the door during their exit interviews then you be sure to dig a bit deeper to find out exactly where you’re going wrong.

A common issue businesses run into is their people are ready to take on more responsibility, but they don’t have any to give them. If you’re struggling with this then you might need to rethink how you distribute responsibility among your teams or even restructure your departments.

And make sure your managers are regularly asking their reports where they want to take their careers during one-to-ones. That way you’ll spot employees who are eager to take the next step before they’re sick of waiting for an opportunity to come along.

Try Assembly to see how easy it can make taking the pulse of how your employees feel about their career opportunities at your company.

  1. Bad pay

It will come as no surprise that the second most common reason people told McKinsey they’ve quit a previous job is “inadequate compensation”. 

An employee doesn’t have to be unhappy to be keeping their eye on what they could be earning in a similar role at another company. They’d be shooting themselves in the foot if they didn’t check LinkedIn or search a job board every now and then to make sure they’re not getting shortchanged in their current role.

The simple truth is that if you pay your people poorly, your top performers won’t stick around for long. So, make sure your teammates are getting compensated fairly if you want them to solve the retention challenge.

  1. A bad boss

People quit managers, not jobs. 

In fact, 34% of workers surveyed by McKinsey have left a job because of “uninspiring/uncaring leaders”, while other studies have shown a whopping 82% of workers have considered quitting because of a bad manager.

A trap a lot of companies fall into here is failing to realize that being a great people manager and being a brilliant individual contributor require totally different skill sets. This leads to organizations regularly rewarding top performers for their great work by promoting them to manager and then giving them no help with the transition, since they’ve already proven themselves so capable. 

In fact, according to one study:

  • 26% of managers have never received any management training
  • 39% only received management training when they first became a manager
  • Just 35% of managers receive regular management training

Don’t be surprised if turnover is high in a department lead by someone who hasn’t received any management training. Avoid this by becoming one of the minority of companies that train their managers. Then just watch what happens to your retention rates.

  1. Lack of meaningful work

31% of respondents to McKinsey’s survey said they’ve quit a job due to a lack of meaningful work. Which is worrying when you realize 54% of people are apathetic about their work or actively disengaged with it – with just 10% of workers highly engaged.

Whether they're at the top of the corporate ladder or the very bottom, everyone wants to get purpose and meaning from their work. And to do that they need to feel like they get to put their talents and abilities to use every day.

To make sure employees at every level of your organisation find their work meaningful, make sure you’re running regular engagement surveys. If the results don’t paint a pretty picture, it’s crucial you delve deeper by asking your employees what work they enjoy doing and what unique talents they feel they bring to the table in one-to-ones. From there, you can rethink your teams’ workload and responsibilities in a way that’s better aligned with each of their talents.

Try Assembly to empower your teams with all the tools they need to boost employee engagement.

  1. Burn out

According to McKinsey’s survey, 29% of people say they’ve moved on from a job because of unsustainable work expectations. Which is hardly surprising when 77% of workers say they’ve experienced employee burnout at their current job – with more than half saying they’ve felt burned out more than once. 

If your people are consistently having to work overtime to meet their deadlines then they’re likely feeling burned – and eyeing the door.

If you want to retain your best people, make sure you’re looking after them. Take their mental health and work/life balance seriously, and don’t put an unreasonable workload on their plate.

  1. Unreliable and unsupportive colleagues

26% of people who responded to McKinsey’s survey say unreliable and unsupportive colleagues was one of the reasons they’ve left a job.

But the fact is: 44% of all workers will regularly recognize their peers when they’re offered a simple tool that lets them. And peer-to-peer recognition is 36% more likely to have a positive impact on your business’s bottom line than manager-only recognition. 

A simple way to make sure your people aren’t jumping ship because their teammates aren't giving them their dues is by giving them tools that make it easy for them to praise their colleagues – like Assembly’s Give Recognition Flow.

Book a demo of Assembly to get all the tools you need to make recognizing your employees as easy as possible.

  1. Lack of workplace flexibility

It will come as no surprise that in the post-pandemic world, 26% of people told McKinsey they’ve left a job because it didn’t offer enough flexibility. 

Other studies have revealed that:

  • 71% of employees open to looking for a job aren’t happy with how flexible their current organization is willing to be
  • 56% of remote workers would look for a new job if their company asked them to the return to the office
  • 75% of workers would make flexibility the deciding factor between two jobs with identical pay

If you ask your staff to come into a physical office every day, then don’t be surprised if they start looking for a job that offers them more flexibility. On the other hand, if you embrace telework, you could become an employer of choice in your industry.

Wrapping up

Address the seven most common reasons people give for leaving their jobs and for the best chances of avoiding the costs of a high staff turnover and retaining your top talent. 

Just remember: staff turnover isn’t something you set and forget. You’ll need to keep coming back to how you’re handling these areas to make sure your attrition rates stay low.

Browse our Free Employee Recognition Guide

Get the foundational knowledge on creating an employee recognition program that boosts employee engagement and helps them feel valued.

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Frequently Asked Questions

Is Assembly SOC 2 compliant?

Yes, at Assembly, security is a top priority. Each quarter, we have ongoing security work that is everyone’s responsibility. While we maintain a strong security posture, it was important for us to prove to our customers that we do everything we claim to do. This led us to pursue a SOC 2 Type II report that would provide evidence of our compliance with industry gold-standard security practice.

What's the ROI for employee recognition?

There is study after study showing that employee recognition leads to increased engagement. This in return creates an environment where employees are happier and more motivated which increase productivity and reduces voluntary turnover significantly. In order to filled critical roles, companies tend to spend nearly twice the value of an annual salary. Assembly is an investment in your employees that supports your bottom line.

Does Assembly offer longer-term contracts?

Yes, we will offer contracts for companies with longer-term agreements to help larger customers have more certainty around future costs.

The minimum agreement term is a 12-month subscription.

Does Assembly offer onboarding support?

We do and for FREE! Any new customer needing further support to get started with Assembly to ensure you're set up for success can request custom onboarding support. Improving your employee experience is about much more than just using our amazing software; it’s about transforming your business to create a workplace that people love. That’s much easier to do with the personal support and advice from our passionate people experts.

Is there a free version of Assembly?

Yes. We offer a completely free plan for up to 50 team members. This plan is intended for teams or organizations that are looking to get started with an employee engagement tool. Keep in mind, this plan is limited in features.

All customers can open an Assembly account for free and get started without a credit card. Then you can change plans as necessary.

How much do rewards cost?

At the time of redemption (when your employees exchange their points for a paid reward) you'll pay face value. If a reward is a $10 Amazon gift card, your cost will be $10. All paid rewards are billed for on a monthly basis.

The good news is that you don't have to pay for rewards upfront because we only charge you when points are redeemed, not when they're earned.

Does Assembly offer discounts?

We offer discounts or educational or charitable organizations. In order to secure a discount, you'll first need to book a demo with a customer support specialist.

For all other organizations, we are willing to consider longer-term agreements in exchange for discounts. To set up annual plans or longer, you will need to book a demo with a customer support specialist.

How do I cancel my plan if needed?

If you're on a month to month plan, you can go here and cancel anytime. If you're having concerns or need help setting up your account for success, you can always book a demo with a customer support specialist.

If you're on a longer-term custom plan, you'll need to reach out to your customer support specialist to cancel your account or email us at support@joinassembly.com.

What customizations are available?

Great question! You can customize your core values to match your organization's to boost and track alignment. You can change your currency from the 🏆 emoji (our default) to any emoji of your choice. You can swap our logo for your own. You can also set up company culture rewards such as, "Lunch with the CEO," "Buy a book on us," and so much more!

Who can give or receive recognition?

While we recommend a peer to peer set up where anyone in your organization can give or receive recognition, you can set up Assembly however you want. If you need to limit the people who can give or receive recognition, that's perfectly fine and can be done from your Admin, here.

What integrations are available?

Assembly connects to the tools your employees use every day to offer an easy, seamless experience with minimal change management.  

Assembly has integrations with HCM/HRIS systems like ADP, Google, Office 365, and Slack. We also integrate with communication tools like Slack and Teams so you and your employees can access Assembly wherever they work now.

What's your average adoption rate?

That depends on the company's permissions set up. That said, over 90% of the employees on Assembly's platform are recognized on a monthly basis. That means nearly every employee across all of our customers are receiving regular recognition from their peers, managers, or leadership. We're extremely proud of this.

Must rewards be set up to use Assembly?

They are not required. You can use Assembly without having rewards set up. However, we don't recommend it if you intend to have a high adoption and usage rate. You can always keep the costs down by offering internal culture rewards that are fulfilled by you internally.

Are points required to use Assembly?

No, you can remove allowances from anyone or everyone. It's up to you but we do recommend using points whether they're worth a real dollar value or not. Companies that use points have a much higher engagement rate even if those points don't exchange for real dollars.

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