Kasper Hulthin is co-founder of employee analytics company Peakon. Views are the author's own.
This quarter, employers are likely to see a sudden jump in two-week notices. It's the perfect storm: record-low unemployment combined with post-holiday blues and New Year's resolutions. ZipRecruiter provides concrete evidence; job applications have been spiking 20% to 30% every January since 2015.
Understanding the business implications here is crucial. The costs of losing employees can add up quickly, with The Society for Human Resource Management estimating that replacing a salaried employee can cost 6 to 9 months' salary on average. Unfortunately, businesses find themselves in this costly position rather often. The Work Institute's 2018 Retention Report predicted that 1 in 3 workers would quit their jobs each year by 2020.
Luckily, there's a simple solution: Listen to your employees. Work Institute's report found that employers could prevent three quarters of employees from leaving if they listened to workers' concerns. This conclusion aligns with a recent study from my own company. We analyzed more than 32 million employee survey responses from 125 countries to understand what motivates employees to quit. We found that tell-tale warning signs begin to emerge a full nine months in advance of departure dates.
By identifying what causes employees to quit, we can in turn figure out how to prevent it. Here are four ways you can prevent team members from leaving:
Provide challenging work
A sense of accomplishment is an important factor in maintaining loyalty, and engagement is one of the most crucial elements to employee retention. Employees are most likely to leave a job when they feel their work is no longer meaningful, whether it's the content of the task or the chance to grow professionally because of it.
Be ready to discuss pay
When it came to employees who quit, the study found a steep drop-off in ratings for the statement, "I can have well-informed and constructive conversations with my manager about pay." While monetary reward is closely tied to engagement, the ability to openly talk about pay proved to be even more crucial for employee engagement than the feeling of being fairly rewarded. When employees feel like they can have discussions with their manager about compensation, they feel respected and supported emotionally, driving meaningful engagement in the workplace.
Be a supportive manager
In a point closely tied to the compensation discussions above, data shows that people leave managers — not colleagues, culture or the company. Employees are more likely to disengage with their job if they do not have a mutually beneficial relationship with their manager. Employees who quit had a steady decline in rating over time for the statement, "My manager provides me with the support I need to complete my work." This shows a need for managers who go beyond assigning tasks and empower employees with support.
Set clear development plans
Employees look for ways to excel in their fields, whether through professional growth or personal connections. The quest to become "our best self" is human nature. When a job lacks this crucial aspect, employees are likely to leave in search of another position that can fulfill the need for growth. The survey found a drop-off in ratings for statements about various types of growth, including career advancement, learning and developing new skills, and mentorship that supports development.
While every company and every employee is different, retention generally is about striking the right balance of challenging work, support, development and, of course, pay. The best way for employers to find this balance? Listen.