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Following a period of massive turnover coined ‘the Great Resignation,’ leaders must prioritize their employees moving forward. Wide-scale tech layoffs have led many to search for new positions. One determining factor for those searching: how a company treats its employees. To become a sought-after organization, you must first look within your organization and analyze why workers leave in the first place.

We’ve got the facts: The number one reason people quit their job is toxic company culture (62%), closely followed by low salary (59%), poor management (56%), and a lack of healthy work-life balance (49%), according to a Flex Jobs survey.

High employee turnover can be costly for an organization due to lost productivity, decreased morale, and increased recruitment expenses. Moreover, employee retention is essential for maintaining a positive company culture. When employees feel valued and appreciated, they are more likely to be committed to their work and contribute to the overall success of the organization.

Therefore, understanding the causes of quitting is crucial for organizations. Let’s explore the top reasons your employees may quit and how to avoid those situations in the first place.

  1. A toxic work environment

This is the leading cause of people leaving their positions, so not one to ignore. Such an environment is characterized by negativity, stress, and a lack of support from colleagues and management. It can be caused by several things, including poor communication, lack of recognition, bullying, harassment, and discrimination.

An environment as such can stem from just one person and can affect an entire office. When employees become a part of it, they can experience a range of negative emotions, including anxiety, frustration, and low self-esteem. This can lead to burnout and possibly distract them while at work. Moreover, employees who work in a toxic environment may also suffer from physical and mental health issues, such as headaches, insomnia, and depression.

One of my clients called me just a week after starting her new position and told me an executive at the company was yelling and demeaning a manager while on a call with her included. She quit shortly after and that was a major part of her decision.

To identify if your workplace is toxic, there are several key signs you can observe. Firstly, note the behavior of colleagues and superiors: are they consistently rude, disrespectful, or overly competitive? Toxic workplaces often foster a culture of negativity and hostility that can lead to employees being absent. Competition between peers can benefit organizations, but too much rivalry isn’t healthy.

Additionally, excessive micromanagement and a lack of trust can be toxic. If employees are constantly being scrutinized and their contributions are undervalued, it may be time to reassess management. Trusting that workers will do their job will empower them to do the best work they can.

Another red flag is poor communication and a lack of transparency. In a toxic workplace, information may be withheld, leading to confusion and mistrust among employees. Layoffs, for example, can be a sensitive situation to communicate. Think about it this way, how would you like to be told that you’re getting laid off?

As a leader, you can take steps to fix or initiate a positive work environment that fosters collaboration, respect, and open communication. Since communication is critical, employers should encourage open dialogue between employees and management, allowing everyone to feel comfortable sharing their thoughts and ideas. This can be achieved through regular team meetings, one-on-one check-ins, and a culture of feedback where people can share issues when they occur without fearing repercussions. A true culture of feedback is initiated by top leadership who openly ask for negative feedback, showing that it’s welcomed and safe.

Lastly, recognition and appreciation go a long way in creating a positive work environment. Acknowledge and celebrate employee achievements, both big and small. This will improve productivity, and start to create a more inviting workplace culture. And if an employee is fighting or hindering your efforts to create a better environment, maybe they aren’t the best fit for your company.

2. Low (Non-competitive) Salary

A non-competitive salary is undoubtedly a major reason workers switch companies. If they feel that they are not being compensated fairly for their work, they may become demotivated and disengaged. This, in turn, can result in either losing time and money or losing the employee altogether.

Not enough compensation can make it difficult for employees to meet their basic needs, causing financial stress and anxiety, which can further impact their performance. In addition to affecting employee retention, offering a low salary may be less attractive to top talent.

In today’s competitive job market, job seekers have access to a wealth of information about salaries and benefits, making it easier for them to compare and evaluate offers. Therefore, it is essential for organizations to offer competitive salaries that reflect the value of their employee’s contributions. This can help to improve employee satisfaction, retention, and engagement, ultimately leading to a more successful and productive workforce.

3. Poor management

Poor management refers to the ineffective and inefficient handling of resources, people, and processes in an organization. Managers who are unable to communicate effectively, fail to provide constructive feedback, or micromanage their employees can cause frustration and dissatisfaction among staff, ultimately risking them quitting. As we’ve seen above, this can also characterize a toxic environment.

A substandard manager-employee relationship can manifest in various ways, such as low employee morale, missed deadlines, poor quality of work, and low productivity. In addition to its negative impact on employees and business outcomes, poor management can also lead to legal and ethical issues. For example, if a manager discriminates against certain employees or fails to comply with regulations, the organization may face lawsuits and damage to its reputation.

To avoid poor management, organizations should invest in leadership development programs, and provide regular feedback and coaching to managers. Even if someone has management experience, coaching can help them identify blind spots they’ve never been aware of.

While coaching a CEO, I discovered he sometimes used judgmental language toward others. I asked him about the particular words and what they had in common and he eventually realized how they may be perceived negatively. This was a big “aha” moment for him.

A fantastic manager will set realistic goals and expectations, and foster a culture of accountability and transparency. By doing so, employees below them are more likely to stick around.

4. Lack of work-life balance

The issue of work-life balance has become a hot topic in recent years due to the “self-care” movement and Covid transforming the modern workplace. It is now widely recognized that a lack of balance between work and personal life can have a significant impact on an employee’s well-being and job satisfaction.

There are several reasons why balance in and out of the office is so important. Firstly, it will have a positive impact on one’s physical and mental health. Secondly, having a balance will improve motivation, as employees feel more valued and supported by their employers. Finally, it will lead to increased productivity and efficiency, as employees are able to focus more fully on their work when they are not distracted by their personal life.

To address the topic of work-life balance, many companies are now implementing policies and practices aimed at promoting a healthy balance for their employees. For example, creating flexible working arrangements such as telecommuting or flexible hours, as well as wellness programs and other initiatives aimed at promoting employee well-being. By taking these steps, you can help to create a workplace culture that values and supports its workers, thereby giving them yet another reason to stay.

The overarching solution: Become talent-centric.

Leaders can proactively stop employees from leaving by prioritizing them from the very beginning. A “talent-centric organization” (TCO) is one that considers its employees in every decision. Rather than letting money or the product drive decisions, TCOs think first about those essential to their existence and success: their talent. Creating a culture of effective communication, transparency, open feedback, and growth opportunities will put you on the path to becoming a TCO.

Creator and Host,

Carol Schultz

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