Upward mobility, progressive pay drive retention, Glassdoor study shows
- A Glassdoor study on employee turnover found that workers who stayed with an employer for a long time without a title change, or clear path for advancement, will leave for the next step in their career, the researcher wrote in the Harvard Business Review. Glassdoor looked at 5,000 job transitions from thousands of resumes shared on its site between 2007-2013.
- The study also found that a 10% pay increase is linked to a 1.5 percentage-point increase in the likelihood that employees will remain with their company when they move into their next role. Glassdoor’s researchers summarized that title changes and promotions weren’t enough to keep workers on staff; salaries were expected to rise along with careers.
- When employees leave their companies, they move onto organizations with a higher Glassdoor rating, the study showed. In summary, employees who feel committed to a company because of its values are less likely to leave as a next career move.
Glassdoor conducted the study to help HR determine why and under what circumstances employees are apt to stay or leave. The company rightfully points out that employers who don't ask why workers leave are missing out on an opportunity to intervene before they exit.
Turnover is costly: Businesses can spend as much as 21% of an employee's pay to find a replacement, the report notes. That's part of the reason why exit interviews, and even 'stay' interviews, have gained popularity among employers.
Although the job-hopping stigma of millennials may be overblown, this demographic will be harder to retain if employers overlook studies like this one. The same risk applies to high-potential talent.
The results also confirmed what other studies also have shown: Employees want opportunities to grow and advance, and turnover among them is at its lowest when the work culture is positive.