The Real Reasons Employees Leave Companies

Research from Georgia State University and Arizona State University

As leaders, we're all too familiar with the disruption caused by key talent walking out the door. But what if we could better understand the underlying factors that drive these decisions?

A groundbreaking meta-analysis conducted by researchers at Georgia State University and Arizona State University offers valuable insights that can reshape our approach to talent retention.

The study

The study, led by Rodger W. Griffeth, Peter W. Hom, and Stefan Gaertner, set out to update and refine our understanding of turnover antecedents – the factors that predict whether an employee is likely to leave. By analyzing data from numerous studies conducted over several decades, the researchers aimed to provide a quantitative review of the predictive strength of various turnover antecedents.

Their methodology was rigorous. The team collected data from published articles reporting predictor-turnover relationships, focusing on studies that measured actual turnover (not just intentions to quit) and used predictive designs. They then applied meta-analytical techniques to synthesize the findings, correcting for various statistical artifacts to ensure the most accurate results possible.

The findings

So, what did they find? Perhaps unsurprisingly, job satisfaction emerged as a key factor. Employees who are satisfied with their jobs are significantly less likely to leave. But the study delved deeper, revealing nuances that can inform our management strategies.

Organizational commitment, for instance, showed an even stronger negative correlation with turnover than job satisfaction. This suggests that fostering a sense of loyalty and connection to the company could be even more effective in reducing turnover than simply ensuring job satisfaction.

The researchers also found that factors like pay satisfaction, distributive justice (fairness in rewards), and promotional opportunities had significant correlations with turnover. However, these correlations were generally weaker than those for overall job satisfaction and organizational commitment.

Interestingly, the study revealed that an employee's perception of job alternatives is a significant predictor of turnover. When employees believe they have good opportunities elsewhere, they're more likely to leave. This finding underscores the importance of staying competitive in terms of compensation and benefits, but also highlights the need to create a work environment that employees perceive as superior to potential alternatives.

Performance also showed a negative correlation with turnover, meaning high performers are generally less likely to leave.

However, this correlation was relatively weak, reminding us that even our star employees might depart if other factors aren't in place.

What can we learn from this?

So, how can we apply these findings in our tech organizations? First, of course, is job satisfaction. A big part of job satisfaction is the manager, but also the rest of the people the employee has daily interaction with (for e.g, immediate team members). Work-life balance, opportunities for upskilling, the tools and setup given to the employee, the nature of the role itself, all contribute to it. Going into it in detail might need another dedicated post!

While job satisfaction is important, it's not the whole story. We should focus on building organizational commitment, perhaps through initiatives that align employees' personal goals with company objectives or by fostering a strong, positive company culture. Does the employee truly feel aligned with the company’s mission, values and strategy? If not, then may start looking outside eventually.

We should also know how our employees perceive their job alternatives. This doesn't mean we need to constantly outbid competitors, but we should strive to create a unique value proposition for our employees that goes beyond just compensation. They should know that whichever place they leave, it won’t be as good as this place - or at the very least, they’ll miss significant aspects of working at your place.

Fairness and transparency in rewards and promotions are crucial. Regular reviews of compensation structures and clear communication about career progression can help address these factors. There are plenty of places where there is little transparency in how people are promoted or given new responsibilities. Sometimes there are workplaces where people feel the employee review process is not fair, and no matter what they do, they won’t be able to get a fair chance at a promotion, better salary or new responsibilities.

Finally, while high performance doesn't guarantee retention, investing in employee development and creating opportunities for growth can help keep our top talent engaged and committed. If people feel that they are performing at their best in the company, they often feel fulfilled and motivated enough to continue at their current workplace, instead of looking outside.

By applying these research-backed insights, we can create environments where our best people not only stay but thrive, driving our organizations forward in the process.