Why Do Good Employees Quit and What is It Costing Your Company?

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How To Keep Your Best Employees and Reduce Turnover

Finding good employees is tough. Keeping them can often be even tougher. Currently, the median time an employee spends at a company is 4.6 years. Losing a good employee is hard, especially if you thought things were going well and it comes as a surprise. The employee-employer relationship can be a tricky one and hard to navigate. While employee turnover can often be frustrating and even a personal defeat, it always hurts your bottom line.

In one study, 89% of managers surveyed said they thought most employees leave for better pay. However, another study found that 88% of employees who quit did so for something other than money. Clearly, there is often a disconnect between managers and employees about what motivates an employee to leave. Often poor management, overworking, and the absence of growth opportunities lie at the heart of an employee’s departure.


Related Article: 6 Characteristics of a Good Employee

While money may not be at the heart of an employee’s decision to leave, it will cost your company money, resources, and skills when top performers leave. Losing employees is expensive and can often be prevented. Understanding the costs of employee departure to your company and the real reasons employees leave will help you prevent it.

What is employee turnover really costing your company?

When good employees leave it costs your company in many ways. From damage to morale if she was well-liked in the office, or lost skills (as well as the investments you made in helping her acquire those skills), to clients and institutional knowledge there are many risks to your company when an employee leaves.

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Beyond the more intangible losses, it costs money to lose employees. How much? According to data drawn from 30 case studies taken from 11 research papers on the costs of employee turnover, it costs  at least 20% of their salary when an employee leaves. These costs reflect the loss of productivity from the departure, the cost of finding a replacement, and the reduced productivity while the new employee gets up to speed. If you are a small business with multiple employees leaving each year these numbers can add up quickly and make a big dent in your budget.

Just because losing employees costs real money, doesn’t mean the other effects including lower morale are less important. A company culture where employees are constantly leaving will inevitably lead to higher turnover. Keeping people at your company and keeping them happy there will encourage more people to stay. The trick is understanding how to do that.

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Why do good employees quit and how can you prevent it?

In looking to prevent good employees from leaving it is important to understand why they quit in the first place.

Poor Management

Many people like to say, “people don’t leave jobs, they leave managers,” and it is true. The manager is the company’s first point of contact with an employee, if that contact is bad, the relationship with the company will be bad and the employee won’t stay long. Often it isn’t about someone being an inherently “bad manager” but rather having poor management practices. Luckily, many of these can be fixed.

Employee Productivity

Bad managers don’t listen to employees, treat them with respect, fight for them, or show them appreciation. Good managers always make sure they have time to hear from an employee, they listen to what they say and they take action to improve problems when they arise. Good managers can teach their subordinates, they can help them grow, and they know that the success of the company ultimately depends on the success of its employees.

Good managers are teachers and coaches, not bosses. You will earn the respect and loyalty you show your employees and they will work harder because of it. They will also stay at your company longer.

Overworked and Overwhelmed

Now, if you want people to stay at your company longer in terms of years you don’t want them staying at the office longer in terms of hours and days. Employees who are are overworked are overwhelmed, unproductive, and unhappy. All things that will make them more likely to look elsewhere for work.

According to some studies, “approximately 40% of all workers today feel overworked, pressured and squeezed to the point of anxiety, depression and disease, and 63% of Americans report they are not coping effectively with stress,” says business psychologist and HR consultant Dr. Tiffany Sanders. On top of this, there is, according to Dr. Travis Bradberry, “New research from Stanford shows that productivity per hour declines sharply when the workweek exceeds 50 hours, and productivity drops off so much after 55 hours that you don’t get anything out of working more.”

Anything you as a business owner and manager can do to increase efficiency and help employees do their work better can help. For example, in many industries, 2-D barcode scanners and technology can ease the burden of repetitive, time-consuming work.  Asset management and inventory tracking are time-consuming processes that can be sped up with the new technology. Less time spent on these tasks is more time spent on other more engaging and important work. This all adds up to happier employees.

Lack of Opportunities for Growth and Development

Ultimately, for many employees true happiness isn’t about a good manager or getting home early, it is about growing and developing as an employee and person. If you can’t grow at your job you are not likely to stay there. People want to be inspired and then receive the opportunities to act on that inspiration. If you don’t provide them, they will find someone who does. Especially your best employees.


Ultimately, for many employees true happiness isn’t about a good manager or getting home early, it is about growing and developing as an employee and person.


You need to seek employee input and learn what they want to do and what skills they want to develop. Many employees may have ideas for new responsibilities and tasks they could take on if you ask them. Ultimately, as a manager, you need to decide what roles you want them to fill but it can be helpful to get their opinion and if you can’t give them exactly what they want at least you can try to give part of it, or explain what needs to happen for them to get the role they want.

At the end of the day, keeping good employees requires constant attention and care, kind of like running your business. You need to be attentive to employee needs and issues and you need to create an atmosphere of trust and respect. It isn’t always easy, but the rewards are good for your business and good for your employees.

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Tips To Help You Keep Your Best Employees

You can’t afford to lose your best employees. Here are some quick tips for how to keep them:

  • Good communication is key – always be ready to talk with your employees and listen to them if they have issues or concerns, you won’t know there is a problem if you aren’t communicating.
  • Don’t overwork – After 55 hours a week employee productivity drops so much it isn’t worth working, and the unhappiness and stress it can create will lead to employee turnover.
  • Create opportunities for growth – Always make sure there are ways your employees can grow and can do work that inspires them.

Good employees are an investment into your company’s future.   Of course you hope they turn out profitable, like you would a monetary investment, but this doesn’t happen by accident.  Hire good managers, don’t overwork or overload employees and allow everyone to grow professionally.  Take care of the people that take care of you and watch your most important company investment pay off.

How could tweaking your management style help to retain the most valuable employees at your company?

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Brian Sutter

Brian Sutter

Director of Marketing at Wasp Barcode
Brian Sutter is the Director of Marketing at Wasp, responsible for the development and execution of the company’s marketing strategy. His role encompasses brand management, direct and channel marketing, public relations, advertising, and social media. He also writes and speaks on topics related to helping small business owners grow their business and improve operational efficiency.
Brian Sutter
Brian Sutter