Employee Turnover: An Evidence-Based Approach to a Thorny Issue

Key points

Managers and HR practitioners might only come up with a few solutions when trying to reduce the employee turnover rate, but the best results likely come from comprehensive approaches.
Start with an accurate diagnosis to focus action on the real causes of employee turnover in your organization. Remember to consider external factors, such as unemployment rates.
Get an overview of the most important internal causes of employee turnover: managers, team atmosphere, the characteristics of the job, pay and rewards, stress, and workforce demographics. We have a series of in-detail Evidence Summaries focused on each of these factors!

Retaining employees is as important as finding and hiring them. When employees leave, the organization suffers many costs. It may lose knowledge, and it must invest money and time in recruiting, selecting, onboarding and training new people. It’s easy to find advice on how to reduce employee turnover, but an evidence-based practitioner would look for more than that.

Firstly, investigate your own organization to paint a unique and accurate picture of what employee turnover looks like in your context. Then, take some tailored action taking into consideration also research on this issue.

Employee turnover has many causes – identify the first one to act upon

Four researchers from the USA have just published a meta-analysis on the causes of employee turnover. They specifically looked at voluntary employee turnover, meaning the rate at which people decide to end the employment relationship with an organization. The study brings new insights from the last 17 years, the time passed since the publication of previous comprehensive research on the topic. The study is also extremely rich: it looks into 57 possible influencing factors, analyzing data from up to 669,000 people.

Here we have selected the most trustworthy and relevant findings and have grouped them together by topic, in an easy-to-navigate view of what makes employees more likely to leave their jobs*. Our story answers an important question: when you are trying find how to reduce employee turnover, which direction can you take?

Who is most likely to leave? Employees with profiles in high-demand and actively looking for new opportunities

Which employees are you most likely to lose? Research confirms an intuitive answer: the first to go are those who are already thinking of leaving and are searching for other jobs. But they are even more likely to leave when they see many alternatives in the market. For example, this can happen when unemployment rates are low. At such times, people perceive that many jobs are available and there is little competition to get them. The same can happen with occupations that are in high demand. However, all is not lost: even in these circumstances, people are far from 100% sure of leaving. Not everyone who thinks about quitting and is looking for a new job will actually leave. So, you actually can investigate the causes of employee turnover and take action for everyone you want to keep.

The saying is true: people leave bosses…

The saying “people leave bosses, not jobs” is partially true: a lot that has to do with the manager affects people’s decision to stay. Employees are more likely to leave a company if they feel things are not being handled fairly at work. The same happens if they consider that their employer has failed to deliver on its promises. Another important factor for staying is how people feel and act in their team, and whether they perceive a positive the atmosphere. Managers are the ones who can align people and create positive feelings within their team and company.

Psst! We have published an in-detail Evidence Summary on the the relationships between Managerial Behaviors and Employee Turnover. Check it out!

…but they leave jobs too

The nature of the job itself contributes just as much as the manager towards an employee’s decision to leave. When employees are unclear about what you expect of them, they are more likely to leave the organization. Furthermore, a monotonous job, with seemingly unimportant tasks, little autonomy, and void of feedback might also push the jobholder to leave. Finally, the less job-related information employees receive and the less they can contribute to decisions, the more likely they are to leave. Although you might think there is nothing you can do about the nature of the work, note that these characteristics are not strictly linked to the content of the job itself. You can give a sense of autonomy, more feedback, and a feeling of involvement to almost any role. Seek advice from professionals involved in job design, they are usually familiar with these dimensions and with what to do to enhance them.

Hey! We have also published an in-detail Evidence Summary on the the relationships between Job Characteristics and Employee Turnover. Give it a look!

Money matters, but other benefits matter even more

People often mention salary as the reason for someone leaving. Well, the actual salary (intended as monetary compensation) has only a small-to-moderate effect on the decision to leave. Actually, rewards beyond pay matter more, especially benefits, training courses, and career growth opportunities. It is also important to consider how tightly pay is linked to an employee’s job performance. The more direct the link, the more likely they are to leave, but this connection seems to depend on the specific context and job.

We have also published an in-detail Evidence Summary on the effect of Compensation and Benefits practices on Employee Turnover. It’s waiting for you!

Stress may increase employee turnover, but not so strongly

Another commonly held opinion is that employees leave because of stress. However, stress levels matter less than perceptions of the manager or the atmosphere in the team. Even more interesting are workplaces where being highly stressed is the norm. Here, the more stressed a single employee is, the less likely they are to leave the organization. In other words, the group average flips the relationship between stress and turnover for individuals in the organization. This can happen in companies where it is normal to work extra hours, invest a lot personally or deliver top results constantly. At this point, you might think that stress is not important, but this is not the case. While stress might not greatly increase the employee turnover rate in an organization, it could influence many other important outcomes, such as performance, well-being, or job satisfaction.

Pay attention to specific demographic groups

Many organizations struggle to keep employees from specific groups and to maintain a diverse workforce. Indeed, some demographic characteristics are associated with a higher probability of leaving a job. So, employees who are married, have children, have been working in the same place for a long period of time, and are older are less likely to leave a job than single, childless, young, and recently-hired employees. (To make new employees want to stay, check out our previous Evidence Summary on onboarding.)

But even more important for building a diverse workforce is the influence of the majority in an organization: the further away a single employee is from the average in an organization, the more likely they are to leave. For example, the older your workforce is on average, the harder it will be to keep young employees. This is true for a variety of variables, such as age, education, sex, tenure, job satisfaction and organizational commitment.

Takeaways for your practice

Before taking any action to reduce employee turnover, take a snapshot of the situation. Collect organizational data and analyze it to understand the employee turnover rate in your organization and how it compares to the industry average.
Look into differences within your organization: are there any specific departments, demographic groups, or specialists who have been especially likely to leave? You might want to focus your efforts on the most acute situation.
Measure the impact of employee turnover on your organization: which outcomes are affected by high turnover rates? Use these as benchmarks to evaluate if any actions you implement actually work.
Remember that turnover has many causes and that you can achieve better results by acting on several of them.

Make sure to check out our series of in-detail Evidence Summaries on the links between Employee Turnover and:

Trustworthiness score

We critically evaluated the trustworthiness of the study we used to inform this article. We found that the design of the study was moderately appropriate (70% trustworthiness level) to demonstrate a causal relationship, such as effect or impact. This means that there is a 30% chance that alternative explanations for these results are possible, including random effects.

Learn how we critically appraise studies to assign them a Trustworthiness Score.

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References & Further resources

Rubenstein AL, Eberly MB, Lee TW, Mitchell TR. Surveying the forest: A meta-analysis, moderator investigation, and future-oriented discussion of the antecedents of voluntary employee turnover. Personnel Psychology. 2017;00:1–43. https://doi.org/10.1111/peps.12226

Analytics in HR (N/A). What drives employee turnover? Part 2. Retrieved [20/01/2018] from https://www.analyticsinhr.com/blog/what-drives-employee-turnover/