No company likes to deal with turnover, but it’s an employees’ market in many industries and jobs aren’t hard to find. Knowing what might make your employees quit, however, can give you an opportunity to make changes before they give their notice. A new study from the career website PayScale found there are several top reasons employees why leave their jobs.
“The motivation to leave an organization and the decision to accept a job at new one are often two different decisions,” says Wendy Brown, director of content marketing for PayScale. “It’s a push-pull process employees face, and doing the right thing to retain an employee is different than how you attract a new person to your organization.”
Why they leave
The top reason employees quit? It’s the bottom line. Twenty-five percent of respondents stated that higher pay was the reason they looked for and took a new job. Millennials are 9% more likely to quit for money than boomers, who are more likely to leave for increased flexibility in their job.
“Employees know what they’re worth and do their homework,” says Brown, adding that value-based compensation packages go beyond the paycheck.
“We’re seeing a trend in perks that come a la carte and can be customized,” she says. “Companies are picking up the cost of gym memberships, daycare, or even paying off college loans.”
While the number is key, transparency on the pay spectrum is also important to employees. “Having a total compensation statement where employees can see the range for where they are in their role, where they’ll bump up against the top and what it takes to get to next level gives folks a path,” says Brown. “Also, being transparent about how you structure your pay and adjusting as needed to make sure you’re giving fair pay helps. Even if people could make more elsewhere, feeling like they’re part of the compensation process will make them more likely to stay.”
Brown says previous PayScale research found that when companies don’t have open conversions about pay and their pay philosophy, most employees think they’re underpaid even if they’re paid fairly or above market.
Why they pick a new company
Interestingly, the PayScale study found a disconnect between the top reason employees quit and the top reason they’re attracted to a new job. While pay is the motivator for leaving, it’s not the top reason for taking a new job. Twenty-seven percent of respondents said they changed companies because it offered an opportunity to do more meaningful work. Yet just 14% of employees quit to find an employer who aligns with their values.
“Employees need to ensure that they can pay their bills, but once the salary is satisfactory, it’s meaningfulness and their values motivate them to choose a new employer,” says Brown.
Attract and retain the best people by clearly communicating your company’s values and purpose. Articulate this information inside the organization and by posting it on your career website, weaving values and purpose into your storytelling, suggests Brown.
“The values an organization holds dear should also be embedded in the organization’s compensation philosophy and reflected in all pay decisions,” she adds. “Everybody has different values, and throughout everyone’s life, those needs and values can change. Being transparent helps keep employees happy.
The bottom line for employers: Ensure that you’re getting the pay right first, says Brown. “Pay people fairly, using the market as your foundation,” she says. “Then have ongoing conversations with your employees about what they consider to be meaningful work. Matching pay and mission gives employees what they want most.”