Top 5 Reasons Employees Leave Your Company

by Sharlyn Lauby on September 5, 2012

I ran across two interesting graphs recently showing the reasons that employees leave a company. Honestly, I don’t know if they would have captured my attention except for the fact that I saw them within days of each other. And their results were quite different.

  • The blue line represents a survey of approx. 8,000 employees looking for a new job.
  • The purple line is from a survey of 500 HR pros about workforce mobility.

HR, leadership, management, training, engagement, satisfaction, pay, benefits, graph
Click to Enlarge

Now, I really don’t know that it matters who did the survey…blah, blah, blah. The purpose of the exercise isn’t to discount anyone’s data. Instead, it should prompt a few questions:

  1. There are some definite areas that both HR and employees say are reasons people leave companies. And the reasons aren’t really shocking. We keep hearing about employee disengagement being at an all-time high. What conversations are companies having about these identified reasons for employees leaving?
  2. For some of the reasons, there’s quite a noticeable difference between the employee and HR response. IMHO, these are general survey trends and the responses could be different dependent upon an industry or company. But then the question remains…What are companies doing to make sure the information they have about employee departures is accurate?

For example, an employee walks into their manager’s office and resigns. During their exit interview, they tell HR that they’ve resigned because they found a new job that pays more and offers better benefits. HR goes to senior leadership and says “We need to improve pay and benefits to retain employees.” However truth be told, the employee started looking because their manager is a Grade-A, World-Class Jerk.

Company thinks – we need to pay more. Reality is – company needs management training.

Again, I didn’t put the chart together to really question the data. I did put it together to illustrate how critical it is for us to truly understand why employees stay with the company and why they leave. And when asked the question, does the company really know?

Because if companies don’t know the real reason, how can they possibly develop good practices to retain employees?

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Kelly O September 5, 2012 at 6:35 am

You know, I appreciate the people who maintain that the real reason most people leave a job is because of management. I understand the theory behind that, and I can’t say it’s not a factor in many of my decisions in the past.

But particularly the way things are going for many people, the compensation (and by association, benefits package) is huge for a lot of people. For many people, raises have been small if they’ve gotten one at all, and so many had to take pay cuts early on in the original recession that it’s been a struggle to keep up. Better pay is a massively huge carrot, especially if other factors are not really that different.

Although it’s like you said, I’m sure during the exit interview, many people just say “it’s better pay/benefits” rather than have that one last confrontation with a manager, or run the risk of a negative reference down the line because of that last thing they said.

Patricia September 5, 2012 at 8:37 pm

I think there are many who don’t recognize the impact a manager has on an employee’s work experience and tenure with the organization. I also know sometimes there is just a personality conflict but a manager who has had good training should be able to overcome that and focus on mentoring and developing the employee.

If an employee says (even with half truth) that they are leaving for better pay, I think sometimes that means that either the manager didn’t recognize that the employee could have, and maybe should have, had more challenges (with corresponding increased pay) or that the employee is going to give the new employer a big surprise!
Patricia recently posted..8 Tips for Leading a Church Budget Committee

Sharlyn Lauby September 6, 2012 at 9:31 am

@Kelly – Thanks for the comment. You raise an excellent point about benefits packages being a part of compensation. And I agree that many employees will say pay and benefits instead of their manager during exit interviews to avoid burning a bridge.

@Patricia – I like your point about pay still being a reflection on the manager. Thanks for sharing!

Julie September 7, 2012 at 1:53 pm

I’m always surprised to hear employee’s reasons for leaving a company and quite often it’s not solely about money, but often is simply not being appreciated.
Julie recently posted..The Psychology of Free

Mike Ramer September 7, 2012 at 5:47 pm

Here’s a radical idea: Ask employees what they want and then deliver to them. That will retain them. If not, people like me will take them away by giving them what they want.

In my experience, the #1 reason people leave their employer is poor managers. Put the onus on management to retain their staff by giving them the tools and resources to do so.

Sharlyn Lauby September 8, 2012 at 2:55 pm

@Julie – So true! Thanks for the comment.

@Mike – If it were only that simple. I don’t believe we have to give employees everything they want. We do have to listen and provide answers.

That being said, employees need a certain amount of money to live. If that doesn’t happen, money becomes issue #1. Once the compensation matter is taken care of (and it doesn’t always need to be a huge salary), then management moves to the top reason. Then your point about giving them the training and resources definitely comes into play.

Thanks for sharing your thoughts!

KMB September 10, 2012 at 4:10 pm

I am currently struggling with what to say at my exit interview if the offer I want comes through. I have been to HR more than once regarding the main problem/reason I began looking for a new postion – terrible manager, no appreciation (including a direct statement that my master’s degree and its focus are not important, a degree PAID FOR by the company), and very unprofessional behavior by the manager. So HR is aware of all this, yet has done nothing to assist me (or any of the others who have been to HR about this manager). So why should I repeat the reasons at an exit interview? This manager is guaranteed to bad mouth me when I’m gone, no matter what I say (based on her reaction to prior employees leaving the department). And there’s little chance that a new job will even come close to matching my current salary and benefits after 15 years. But as they say, money can’t buy happiness, nor convince me to put up with the BS on a daily basis indefinitely.

Pulasthi Wannniarachchi September 11, 2012 at 5:27 am

HR and employees say people leave companies because of demotivated, high work load, salary problems, poor evaluation.

TMM September 11, 2012 at 7:45 am

@KMB
Speaking as an HR professional, often when an employee comes to me to complain about their manager, I agree with them.
You say HR has done nothing to help and it may look like that to you. But often your HR person has addressed this issue with management and been blocked from doing anything further. I’ve heard lots of excuses for not dealing with these types of situations:
- he’s a key person and he’ll leave if we push him to improve
- that’s just his way, he’s not that bad
- his staff are just overly sensitive, etc., etc.
This is one of the situations I find so frustrating about being in HR, being stuck between unhappy employees and cowardly management. And even worse is that I can’t even tell you all of this so in the end, it looks like I don’t care and am doing nothing.

Sharlyn Lauby September 11, 2012 at 9:58 am

KMB, I know how frustrating it can be when an employee comes to HR hoping they will fix an issue and it doesn’t appear anything happened. As TMM mentioned, sometimes HR has taken action – it’s just not visible to the rest of the company.

Whether HR did anything is immaterial. (It might matter at some point in the future. But that’s another conversation.) The fact you didn’t see change is the answer.

Keri September 12, 2012 at 11:09 am

People don’t want to be tattletales. Especially on their way out. I can’t say I blame them. Not everyone knows how to give or is comfortable giving constructive, non-whiney feedback as to the REAL reasons. It is easier to focus on the comp aspect. That also speaks volumes about management and culture too.

Sharlyn Lauby September 12, 2012 at 4:45 pm

Very true. Maybe if we dedicated time toward training employees on the proper way to give constructive feedback then more conversations would happen. And not just when the employee is heading out the door. Thanks for the comment Keri.

Rashi September 24, 2012 at 5:41 am

Its true that an employee will say that he/she is leaving because of personal reasons/ better opportunity/ learning, etc. We need to understand- when does an employee starts looking out, what triggers that?

Exit forms/interviews hardly get the real reasons out. Maybe a neutral third party can get the information from employees while keeping their identity anonymous.

Good article Sharlyn!
Thanks for sharing.

Rashi

Zee September 24, 2012 at 5:39 pm

I recently resigned due to extremely bad management from the new leadership team. They were untrustworthy, dishonest and the list goes on.

Not to taint HR records I did not have an exit interview and this happened quite regularly if someone leaves due to bad management practice no exit interview happened!

So I agree HR does not know the real reasons and not to burn bridges you tell what they want to hear.

Tom Glasscock September 28, 2012 at 12:08 pm

I conducted a post exit survey some years back (4-6 months after the individuals had left); lack of leadership was far and away the number one reason employees cited. Lack of career opportunities was a clear number two. Things like compensation and manager relationship were clustered in with and virtually indistinguishable from other items like work life balance, personal reasons, etc.

Jeffrey October 1, 2012 at 1:54 pm

What are the best practices companies use to ensure accurate reasons for leaving are obtained upon employee departures?

Katherine Razzi October 12, 2012 at 5:05 pm

Hi Sharlyn – This blog brought home to me how tricky exit interviewing can be! To think that an employee not wanting to burn their bridges when leaving a company might be inclined to lie that they are leaving due to unsatisfactory benefits and compensation when in reality, their manager is a jerk, is bothersome. If the person is heck-bent on leaving, I guess they may not care how they respond to an exit interview.

If after reviewing the exit interview, and the employee was earning a healthy stipend, then why would anyone conclude that the company needed to compensate better? There must be other clues in the rest of the survey answers that would pinpoint the real answer. And unless one is very good at reading people, a personal exit interview might not reveal the truth. HOWEVER, exit surveys are (or should be) skillfully designed to extract answers that will divulge a lot more than personal interviewing. Thoughts?

Sharlyn Lauby October 13, 2012 at 3:15 pm

Thanks everyone for the comments!

I totally agree with Rashi. Employees might say they are leaving for reason XX and that could be true. The challenge is finding out why they started looking in the first place.

Many times employees find jobs with better pay and benefits, shorter commute, etc. But the reason they took the recruiters call – poor leadership, lack of recognition and no opportunities for advancement.

What’s wrong with saying to employees, “We wish you all the best in your new job. Out of curiosity, what was it about the new position that first attracted you?”

Marianne March 5, 2013 at 7:42 am

This graph is messed up. I just did a quick bit of addition, and the blue bars add up to about 135% and the purple bars add up to about 59%. I can’t make any reasonable deduction from it. (Even if we adjust the percentage lines to bring the blue bars to 100%, that decreases the purple bars to about 40%.) It seems that most of the HR responses didn’t make the graph. I ask about this, not to be critical, but because the topic is of particular interest to me and some research I’m doing. Can you help me out?

Sharlyn Lauby March 5, 2013 at 8:55 am

Hi Marianne. The graph is not a distribution of the only five reasons, which is why it doesn’t total 100%. And the bars represent two different studies – as noted in the post.

The point of comparison is the subject –human resources professionals are saying one thing about why employees leave but the employees are saying something totally different.

Marianne March 5, 2013 at 9:25 am

Thanks for the speedy response. It still leaves me scratching my head a bit, and doesn’t explain why the employees bar adds up to way more than 100%, but I won’t beat a dead horse. I get the general concept, which is what you intended, so that’s cool. Thanks again.

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