The rise in employees quitting their jobs, or “The Great Resignation” as it is now known, gained momentum in 2021 but may be slowing. The U.S Bureau of Labor Statistics report released in January 2023 showed the trend in gradual decline. It’s likely not a fast enough decline for employers, however, who endured a labor market where 4.2 million employees walked off the job in November 2022.

While it has always been important to reduce the chances of a new hire leaving shortly after joining a company’s workforce, the present work culture puts a renewed sense of urgency on keeping new hires happy and productive.

Employers have taken note and begun to identify the reasons employees leave and put policies into effect that serve to reverse the trend.

Effective retention policies make employees happier and more likely to stay, saving companies the cost of hiring a succession of replacement employees. The cost of replacing an employee according to one study is a whopping 33% of that position’s annual salary. Some of these employee-friendly approaches even have the added benefit of increasing productivity and creativity.

Why Do Employees Leave?

Reason 1: Lack of trained management

Employees are very sensitive to quality management. Those who have a less-than-favorable view of their manager’s performance are more likely to interview for another job. According to a recent report, 40% of employees who rate their supervisor’s performance as poor have interviewed for a different job, as opposed to 10% of those who rate their boss’s performance positively.

Similarly, another study revealed that almost half of employees said they had quit a job supervised by a poor manager.

Perhaps most telling is that the same study revealed 56% of employees think managers are promoted prematurely and 60% think managers need more training.

Reason 2: Poor work culture

With one-quarter of the workforce dreading going to work each day and a large number of employees, particularly those with advanced degrees, reporting that a company’s culture is very important, it’s clear that companies must focus on a good fit between their employees and the work environment they foster.

Transparency and honesty are key elements in ensuring that the right people are in the right. Misrepresenting a company’s culture or presenting an environment a company aspires to but has not yet reached can backfire when a new employee realizes they were not shown an accurate picture of a company’s work atmosphere.

Reason 3: Engagement is wanting

Employees often require more than simply a good salary, attractive perks, a competent supervisor and well defined values. Employees expect their cognitive and emotional needs to be met; if they are not, performance suffers and employee loyalty erodes.

About 15% of workers feel disengaged from their employer. According to a Gallup Survey in 2021, “They may be generally satisfied but are not cognitively and emotionally connected to their work and workplace; they will usually show up to work and do the minimum required but will quickly leave their company for a slightly better offer.”

What Are Employers Doing To Reverse The Trend?

Method 1: Use Pre-employment testing as a preventive measure

Pre-employment tests have become increasingly popular among employers not only to gauge a candidate’s job fit, but also to reduce employee turnover rates.

Although there are a number of studies that highlight the correlation, a recent study from SHRM  suggested that pre-employment testing can lead to increased employee satisfaction, retention, and better job performance. By using pre-employment tests to screen candidates before making a hiring decision, employers can increase the likelihood of retaining top talent.

There are some tests on the market, such as Resource Associates’ STAY Test, specifically designed to evaluate a candidate with long-term employment potential.

Method 2: Focus on onboarding

In addition to improving existing areas that have been neglected or poorly managed, companies can focus on proactive measures to improve the workplace they offer and the policies that govern it.

This starts with ensuring that new employees have a clear idea of what is expected of them during their workday and how to access the resources they need to do their job.

The onboarding process is very important to employees and has a direct effect on whether or not they stay with the company. But it is widely neglected despite the fact that human resource departments invest in developing programs—76% of human resource leaders said such programs are underutilized.

Method 3: Offer career paths

Another aspect of retention is ensuring that an employee can visualize their job becoming a career. Those employees who see an easily identifiable path to advancement are 20 percent more likely to stay with a company. One report recently found that 70% of employees most difficult to retain said they would need to change employers to advance their careers. A recent LinkedIn report found that employees stayed 41 percent longer at companies that prioritize internal hiring.

Interestingly, not all employees seek the traditional move to management, with people or departments reporting to them. Non-managerial employees are also more likely to stay at a company that will develop a career path that fits their talents, if one does not yet exist.

Method 4: Enable employees to learn new skills

Drilling even deeper, offering opportunities to learn specific skills and develop talents is key for retaining employees, particularly those between the ages of 18 and 24. That group recently ranked skill development perks third behind health insurance and disability benefits in their list of priorities.

Like many of the employee-focused improvements employers can make in the workplace, professional development benefits both employers and employees.

Companies gain better-qualified employees as existing workers add to their skill sets. Employers also gain a boost in retention as employees are able to advance in their careers without changing companies.

Employees gain marketable skill sets, a sense of stimulation in their job, and the feeling that employers are invested in their advancement.


In Conclusion

Finding, hiring and retaining employees is a huge challenge for companies. The COVID pandemic and subsequent Great Resignation changed the employment landscape in enduring ways.

To that end, companies need to pay diligent attention to trends in the marketplace as well as to the expectations of their workforce. Further, they need to be flexible, nimble, and open to making creative changes to emphasize retention. These proactive measures are critical to retaining employees in an intensely competitive market. The most creative and attentive companies will be at an advantage in what is likely to remain a tight labor market.