Why Employees Leave (Part 1 of 3): What causes high employee turnover? | Excelerated Business Solutions

Why Employees Leave (Part 1 of 3): What causes high employee turnover?

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Why do people leave the organizations they work for? Is it because of the pay? The perks? Or the lack thereof?

In this three-part series, I will explore with you the common factors that cause employee turnover, the strategies you can use to counter these factors, and, finally, focus on how to deal with a common factor that many rapidly growing small business face:

A Heavy Workload.

In this first video, the first of a three-part series. I discuss the common factors found in many organizations that may be causing employees to leave at a faster pace than average. Are you finding it difficult to retain employees, even when your business is doing very well? Are you wondering why your employees leave despite best efforts? Employee turnover is costly for any organization, but more so for small businesses. Consider how much it will cost you to replace the employee—you will need to find someone with preferably the same qualifications and experience to replace that person—you also need to train the new hire, and introduce him or her on how you do things in your business. You need to do all of these at your own expense.

Case study: ice cream deli in a high tourist area in Mexico

Let’s consider the case of an ice cream business in Mexico. I chose this case for two reasons. Firstly, why not Mexico? Why stick to your own backyard when you can explore and learn from other businesses in other parts of the world? And secondly, this particular business was surveyed, scrutinized, analyzed, and the results of the study were published in a study that could benefit business owners like you and me.

This particular case is the subject of a study published in the Journal of Business Case Studies. They wanted to know why the staff of this deli kept leaving the company even if the business was doing very well, especially during the peak tourist season.

In the service industry, like any other, there are seasoned peaks and lulls. Volunteer turnover—that is, when employees decide to leave on their own—that happens during the peak seasons can pose a challenge to businesses, which can impact on their workload, stress levels and the morale of the team.

The study found quite a few reasons why employees left this particular organisation. Here, I highlight the top three reasons for employee turnover.

Reason 1: No clear track for career development or growth

The employees complained about two things:

  1. that there were limited opportunities for career growth and
  2. that there were insufficient opportunities for training and development.

Good employees want to advance in any job in the same way that business owners want their businesses to grow. When employees don’t see themselves growing in a particular role or organisation, many of them will leave and look for better opportunities elsewhere—and at your expense.

Reason 2: Bad company culture

Those surveyed expressed that there were instances were supervisory and management staff showed signs of favouritism and treated some members of the team differently than the others. Many employees also felt that they were not being recognized for their hard work.

Employees want to be treated reasonably. They want to see great work commended and bad work penalised. Favouritism is unfair and this can be demoralising to the members of the organisation—prompting them to leave the company.

Reason 3: Demanding work schedules

Work can become very demanding, particularly when the business is run by a lean team. This is the reality for many small businesses. The problem is further worsened when there are other causes for the heavy workload. Many times, this is caused by unclear workflows and processes—leading team members to be unsure of what is expected of them. When employees don’t know what to do because it was not properly explained to them or because there are no clear processes for certain conditions at work, this becomes a recipe for high employee turnover.

So what should we do? The answer is to address why the employees leave in the first place.

  1. To provide career development and growth within the organisation for all employees,
  2. To develop a company culture that cultivates a safe and motivational working environment, and
  3. To develop clear workflows and processes that will alleviate the heavy workload of your team.

But how do you do that exactly? I’ll explain more in my next video! So please, watch out for the next installment of the Employee Turnover Series, as I explain how to counter the common factors that cause employees to leave.

If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.

Raymond Huan

Raymond Huan

Raymond is a successful business coach and consultant who has helped companies achieve growth for over 10 years. He's worked with companies of various sizes and industries across Australia, New Zealand and Singapore, as well as organisations whose footprint spans across multiple countries. In his book $20K to $2 Million in 2 years , Raymond shares valuable insight of companies that he's coached who have achieved sustained growth of over 50% each year for over three years in a row. Read more about his valuable insight in other posts on the Excelerated Business Solutions Blog or follow him on Twitter.
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