The real reason employees leave their employer

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If a workplace is rife with limited career advancement, a lackluster work culture and anemic pay raises, a company is in danger of losing key talent. This was the key finding of a report from online search firm Glassdoor, which also found that employees who work in a job for too long and without a path to promotion are more likely to leave for a better job than to seek one inside the same company.

For this study, Glassdoor didn’t have to search very hard for its data. The online job site scoured nearly 5,000 job transitions from resumes posted to its site. Then they combined that data with company reviews and salaries shared by employees to understand the statistical impact of various factors on employee turnover.

When it comes to job turnover, the study entitled “Why Do Workers Quit?,” conducted by Glassdoor Economic Research, found that the average American worker spends 15 months in one role but those numbers vary based on the job sector.

Government employees tend to stay in their jobs the longest. An average term for them lasts 18.6 months, while aerospace and defense put in an average of 17.3 months, while member of the media spends around 16.9 months at their job. Workers in the real estate field average 13.3 months in their job, with biotech and pharmaceuticals (12.7 months) and construction, repair and maintenance (10.6 months) experiencing rather quick turnover.

Salaries remain a primary factor in switching jobs. Glassdoor found that when changing jobs, employees earn 5.2% more on average when they make a job transition.

Job stagnation also plays a role on whether or not an employee will look for greener pastures.
“Adding an additional 10 months in a role increases the chances of an employee leaving the company for their next job by 1%— a statistically significant finding,” according to the Glassdoor findings.

“While it’s important to provide upward career paths for workers, a simple job title promotion may not be enough. Maintaining competitive base pay is an important part of reducing turnover,” says Dr. Andrew Chamberlain, chief economist of Glassdoor. “For recruiters, understanding competitive market value for potential candidates could be the difference between making the hire and losing the talent to an internal move within their current company.”

But it’s not just about the paycheck. Glassdoor found that high employee satisfaction, better opportunities for career advancement, the quality of the employer’s culture and values also lead to better employee retention. For every additional 10 months an employee stagnates in a job role, they are 1% more likely to leave the company when they finally move on to their next position, according to Glassdoor.

Interestingly, a trio of workplace culture factors had no impact on employee turnover: work-life balance, senior leadership, and compensation and benefits ratings.” Although these factors matter for overall employee satisfaction, they don’t appear to matter much for employee turnover,” the report found

“A lot of these findings are not necessarily surprising, but rather confirm what we’ve assumed — when employees are getting ready for a new role, they want better company culture, higher pay and a clear career path,” says MaryJo Fitzgerald, Glassdoor career trends analyst.

“One of the study findings that was somewhat surprising is that work-life balance did not have a statistically significant impact on whether employees stay at a company or go,” Fitzgerald says. “Although work-life balance is important for overall employee satisfaction, it doesn't make an impact as much as other factors like pay or culture.”

The cost of turnover
Avoiding, or at least reducing, staff turnover makes economic sense. The study found that on average, employee turnover costs employers 21% of an employee’s annual salary.

“Employee turnover is costly for employers. Although you can't control everything when it comes to turnover, Glassdoor data confirms there are many ways you can control whether employees stay or go. Employers that work to improve company culture, offer competitive base pay and regularly promote and advance employees into new roles will retain them longer,” Chamberlain says.

In addition, “these findings tell recruiters and employers looking to hire what to focus on to bring candidates in the door,” he adds. “For example, focusing on passive or active candidates that have been in their roles for quite awhile or are at companies without a strong company culture could help bolster recruiting efforts.”

Thanks to low unemployment rates, American employers will have to change their factors in order to retain valuable talent.

“It's a job seeker’s market, and hiring is tough right now with such low unemployment and a strong economy,” Fitzgerald says. “To stay competitive, this research shows that recruiters and hiring managers should focus on targeting talent that have been in their roles for more than a year, who are underpaid in the market and at employers with lower company culture ratings.”

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