Why Employees Leave

"Why Employees Leave"
Leigh Branham interviewed by David Creelman,
Chief Correspondent, Human Capital Institute
"Creelman At Large"

Leadership starts at the top, and the top of a public corporation is not the CEO; it's the board.
What appears to be a talent shortage is often actually a retention problem. If the heart of the issue is employee disengagement and retention, then we need to understand the research on why employees leave. Join HCI’s Chief Correspondent, David Creelman, for an insightful interview with Leigh Branham, author of The 7 Hidden Reasons Employees Leave.

There are many reasons to want long-tenure employees. Teams work better when they stay together. Retention reduces turnover costs. Long-tenure employees develop deep knowledge of their customers, competitors and internal organization. Seasoned staff begin to take a long-term perspective. Yet, firms are often unable to hang on to their employees. The question is what drives those employees out the door?

Q: Everybody has ideas about why employees leave, but you actually did the research. Tell us about the research behind your book.

Branham: The Saratoga Institute (a division of Price Waterhouse Coopers) does regular exit survey work with employees. They had data from post-exit surveys and interviews they had conducted with 19,700 employees from 17 different industries from around the United States. Saratoga agreed to share that data with me so I could analyze it. In return, my publisher agreed to put the PWC logo on the front cover of the book I would write reporting the results of my analysis.

In addition to the Saratoga data, I had some personal insight based on twenty years doing career transition coaching--listening to employees talk about why things didn't work out with their former employers. I also did research on retention for my first book, Keeping the People Who Keep You In Business.

In all my research I kept coming up against the belief system of managers—that turnover was acceptable as just the cost of doing business. They weren't terribly concerned about it. Even when the job market totally turned for the worse they didn't let go of that old, dysfunctional mindset. I think it persists today. Most managers still believe that the main reason people leave is for better pay. They believe the pull factors are the primary reason, not the push factors, which are actually under a manager’s control.

Eighty-nine percent of the managers think it's mostly about the money, while 88% of employees say it's something other than money. That's a huge disconnect and should be of tremendous concern to every employer.

Q: What are some of the main reasons people leave?

Branham: The title of the book talks about "hidden reasons," but they are not really hidden to anybody who thinks seriously about this. The number 1 reason is that people don't feel valued and recognized. That manifests itself in a whole number of ways. Pay certainly falls into that category, both the actual amount and the sense of inequity within the company as well as in the outside talent marketplace. It's mostly about informal recognition and respect, which is more important in most organizations than formal recognition.
There are also a whole host of other things that can make people feel 'less than.' For instance, treating people with disrespect, insensitivity to differences, or trying to make them more like you. People don't feel valued when they don't have the right tools or a decent physical work environment. All this stuff says, "You're not important enough for us to invest in you." This is all very prevalent--50% of the employees surveyed said they felt ignored or taken for granted.

There's a whole belief system that says you shouldn't have to thank people for doing their job. That belief system gets it the way of retaining people.

Q: What turns dissatisfaction into actually leaving?

Branham: There is a moment of disengagement. Research by Dr. Thomas Lee at the University of Washington shows that 63% of all turnovers begin with a shocking or jarring event.

Q: What kind of things count as shocking events?

Branham: A lot of things can happen in the first few months of employment. You assume that you are going to be working for the person that hires you and then that person leaves the organization; or you find out you are not going to be able to advance as quickly as you were led to believe; or you discover that someone doing equivalent work is making a lot more than you are. These types of discoveries can be a big shock. Thirty-five percent of people quit in the first six months.

Q: What about people who have got past those vulnerable first few months?

Branham: It’s the same basic issue as with new employees: a disconnect between expectations and realities. There is so much change going on in organizations that there are many occasions where people can be jarred by an unpleasant surprise. For example, people inherit new managers constantly and if that new manager is different from what one expected, it can be the shock that leads them on the path to exiting.
Other critical events can happen: being passed over for a promotion; learning they might be transferred; learning the company might be taken over; being unexpectedly assigned to a new territory; being asked to do something unethical; learning the company is doing something unethical; incidents of harassment or discrimination.

Q: What happens after people are hit with a shocking incident?

Branham: The jarring event shakes them and creates a sense of betrayal. People start to think about how it would impact them if they left the organization. They wonder, "How would it look on my resume if I quit?" People begin to ponder, "Will things get better here?" At some point that employee will decide things aren't going to get better, and he or she begins a job search.

When I conduct exit survey work, I ask people to take me through the thought process from when they first started thinking about leaving to when they finally left. Sometimes it is months before they actually leave. But there is always a point when they switch from being passively dissatisfied to actively looking for a different job. The period of time when they are passively dissatisfied is where an alert manager could intervene. They could turn that whole situation around.

If employees walked around wearing sandwich boards that said "Thinking of Leaving" managers would notice, but so many managers are clueless. They just aren't looking for signs of dissatisfaction and so they miss this deliberation process that goes on between the first thoughts of quitting and the eventual resolution to actually start looking for another job.

Q: We discussed a couple of reasons people leave: people do not feel valued or there is a gap between expectations and reality. What is another common reason people leave?

Branham: Another big reason is a mismatch between the person and the job. This usually comes from faulty hiring. Firms often hire in a hurry, or hire a warm body just to fill a slot, or hire based too much on what makes that person eligible to do a job, such as knowledge or a degree, rather than looking at the talent that makes them suitable for the job. Another preventable mistake is believing anyone can do a low-level job. We also have too strong a belief that we can train people to do a job well, so we just hire whomever we can and attempt to train them. All these things create a job mismatch, which in time will cause the person to leave.

Q: What should organizations be doing to close the gap between expectations and reality for new hires?

Branham: There is a company in Kansas City that has a very frank and candid style of communicating. The firm realizes that its culture is not everyone's cup of tea, so they make sure they tell people about how they communicate before they hire anyone. They ask, "Do you think our style might bother you?"

Another tactic is having candidates talk to other recent hires to find out what it's like to work there. Firms can also hire people who have worked as temporaries and hence have accurate expectations as to what the organization is like. Yet another approach is to find a way to let people sample the work. At Wells Fargo Bank they initiated a process where applicants for bank teller positions watch a CD-ROM showing angry customers making unreasonable demands. They freeze the frame and ask the applicant to respond to multiple-choice questions on how they would handle the situation. With this process, they are killing two birds with one stone. They are testing the aptitude for customer service and they are also helping candidates realize they may hate this job.

Managing expectations is mostly about having the courage to have a frank discussion with the applicant about what the job is really about.

Q: What other things can firms do to improve retention?

Branham: Understanding the competencies required for a job and assessing those in the hiring process is important for reducing mismatches. The state of Georgia’s social welfare department invested in finding out what made some of their agents really good at collecting child support payments from deadbeat parents. They compared the stars to average performers using a methodology similar to behavioral-event interviewing. They used the competency profile in assessing candidates and got much better matches. The agents hired with the new profile each gathered $200,000 more for the agency, which saved the state something like $100 million dollars.

Another reason people leave is too little coaching and feedback—and that obviously can be addressed. That's just the basic stuff managers need to do, but many managers are just not doing it; 62% of employees said they don't get enough feedback. Ferdinand Fournies wrote a terrific book called Coaching for Improved Work Performance. Implementing his kind of approach will reduce unnecessary turnover.
Another problem is that employees perceive too few growth opportunities. Often this is because managers don't know how to be career coaches to their people—so they avoid communication. So firms should provide training on how to be a career coach or do workshops for employees on how to take charge of their careers. Without quality career discussions with their supervisors employees end up leaving and then the manager says, "I wish I'd known because I had plans for you."

Organizations can also survey employees about their managers. Managers themselves are often not getting feedback and they are not being held accountable for retaining people. It keeps coming back to two things: people skills training and accountability for people results.

Q: Is there something further you'd like to mention?

Branham: Senior leaders are important. Employees watch what senior leaders do and don’t do very carefully. The tip of the iceberg is turnover, but the bulk of the iceberg, invisible under water, is disengagement. Seventy percent of the U.S. workforce is less than fully engaged. In many cases, disengagement happens when employees see things in their senior leaders that make them lose trust.

I strongly believe in “servant leadership.” David Neeleman, founder of JetBlue Airline, was a great example of someone with an attitude of being there to serve employees. As the airline was getting off the ground, he even went on the planes after they landed to help clean up. That is hard for some senior leaders because they think there is too much entitlement already on the part of workers. Senior leadership has to make a decision whether to give to the workforce first or wait for them to give to the firm. When you look at the lists of best employers, many of those CEOs have the attitude of 'give first, and employees will give back back.' In other words, if you show your commitment to them, they will show their commitment to you in return. That attitude is what's needed going forward.