New research based on 15 years of studying the behavior patterns of more than a thousand job switchers at varying job levels and career stages has identified the dominant reasons why employees quit their jobs. The answer isn’t compensation and may surprise you.
Their conclusion is that employees quit their jobs because they aren’t having meaningful experiences at work and are not making progress in their careers or lives.
Researchers Ethan Bernstein at The Harvard Business School, Michael Horn, Cofounder of the Clayton Christensen Institute, and Bob Moestra, CEO of The Rewired Group, published their findings in The Harvard Business Review. They discovered that companies tend to focus on relentless cost-cutting and poaching the talent of their industry rivals rather than creating meaningful work experiences for their employees.
Economists, such as The Wall Street Journal’s Greg Ip, have made similar findings. In fact, Ip blames the failure of Intel and Boeing — once two of America’s most admired innovators and manufacturers —, on their own mistakes. These companies are not the victims of foreign competition. They prioritized financial performance, relentless process improvements, outsourcing, and cost-cutting over engineering and quality excellence.
The HBR authors write that some workplaces invest in wellness benefits with mixed results to improve meaningful work experiences. Others try to create effective mentoring or learning and development programs but are finding limited success. Several studies have found that wellness programs simply don’t work and seldom provide a return on investment to the company. Learn more here.
Turnover costs are high
Studies estimate that on average, the cost of losing an employee ranges from six to nine months of that employee’s compensation. For technical and executive positions it can be as high as twice the employee’s annual salary. Other research has found that turnover is indeed very costly to employers and often poorly measured.
Forces that compel employees to quit
The HBR authors found that job switchers had negative experiences (doing work that feels empty, for example, or disliking one’s colleagues), along with changing life circumstances (such as moving or having kids), pushed individuals away from their old roles. The potential for positive experiences elsewhere pulled them toward something new. Those forces work together.
The HBR author’s findings square with research by the Wharton economist Katy Milkman, which shows that behavioral pushes become firmer when a new idea or solution pulls people toward something they aspire to. For example, a salesperson in the HBR author’s sample who felt micromanaged in his job stayed put until he was enticed by an offer that would allow him to take control over all aspects of the sales cycle.
Four quests for progress drive turnover
Although pushes and pulls can work together in all sorts of ways, depending on life circumstances, the authors found that they tend to cluster into four main ones. People who change jobs do so because they want to get out of their current situation, regain control of their work or lives, regain alignment between their work and their knowledge and capabilities, or take the next step in their careers.
Here is how the HBR authors describe each quest.
Get out
People who experience a classic fight-or-flight response are often being managed in a way that wears them down. They may feel stuck in a dead-end job or be in over their heads. Many face steep obstacles (such as a toxic culture, a role that’s a bad fit, or an awful commute) that prevent them from putting their capabilities to good use. For whatever reason, they’re strongly at odds with their work environment. They want a new job to rescue them from their current one.
The HBR authors are not the only researchers to identify toxic work cultures. MIT researchers examined 34 million online employee profiles on Glass door to identify why US workers abandoned their employers. They found that a toxic work culture is by far the strongest predictor of industry-adjusted attrition and is ten times more important than compensation in predicting turnover. Learn more here.
Regain control
It’s common for people to feel overwhelmed (or bored) at work, at home, or both. Some need a rebalance. Others simply want more predictability or flexibility in when and where they work. Unlike employees desperate to get out, control seekers aren’t searching for the nearest escape hatch. They usually feel pretty good about their overall trajectory but not so good about the speed at which they are moving. They tend to hold off on switching until they find a job that will give them agency over their work environment.
Regain alignment
Most people seeking alignment feel a profound lack of respect at work and are hunting for a job where their skills and experience will be more fully utilized, appreciated, and acknowledged. Lacking such validation, they often have a dark outlook and fixate on the many ways their current role doesn’t play to what they have to offer or what they wish to contribute. In their search for something new, they typically gravitate toward an environment where they believe they won’t be underestimated or misunderstood.
Take the next step
After reaching a personal or professional milestone—such as completing schooling, achieving a development goal, or becoming empty nesters—job switchers are often eager to move forward in their careers. In many cases that means taking on more responsibility. Often driven by a desire to support themselves or their families, these individuals might want better healthcare benefits, a more comfortable living environment, the ability to pay for everyday basics or save for college, and so on. People on this quest—unlike those in the other three categories—aren’t necessarily reacting to a bad situation. They’re pursuing growth, so they may be willing to leap into a stretch role.
There is a solution
The HBR authors encourage managers to work with each employee to tailor their experiences and even their roles to help them achieve the progress they seek.
They recommend three ways to do so.
- Interview people long before they head for the exit. (I recommend “engagement interviews” Learn more here.)
- Develop “shadow” job descriptions that speak to their—and your—real needs.
- Huddle with HR to help employees make the progress they desire.
Executives who learn not to rely on zealous financial management and instead to build exciting work experiences and opportunities for career development can cut their costly turnover and have companies that thrive.
About Victor
Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and Managing Partner of InnovationOne, LLC. He works with organizations to transform HR and recruiting, implement remote work, and develop extraordinary leaders, teams, and innovation cultures. He is the author of the highly acclaimed book, Hack Recruiting: The Best of Empirical Research, Method and Process, and Digitization. He is quoted in business journals such as The Wall Street Journal, Workforce Management, and CEO Magazine. Victor has partnered with The Conference Board on innovation research. Subscribe to his weekly blogs at http://www.VictorHRConsultant.com
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