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The 7 Hidden Reasons Employees Leave

8. Lack of Recognition (4 percent), indicating a lack of worth.
9. Favoritism by Supervisor (4 percent), indicating a lack of trust.
10. Supervisor™s Poor Employee Relations (4 percent), indicating a lack of
11. Poor Working Conditions (3 percent), pertaining mostly to undesir-
able physical conditions, indicating a lack of worth.
12. Training (3 percent), pertaining mostly to insuf¬cient offerings,
poorly conducted training, or the denial of permission to attend
training”all indicating the lack of perceived worth.
13. Supervisor™s Incompetence (2 percent), indicating a lack of trust and
14. Poor Senior Leadership (2 percent), same reasons as those given for
next level management, plus lack of clear vision or direction”
indicating a lack of trust or con¬dence.
15. Supervisor™s Lack of Technical Skills (1 percent), indicating a lack of
trust and con¬dence.
16. Discrimination (1 percent), indicating a lack of trust and hope.
17. Harassment (1 percent), indicating a lack of trust.
18. Bene¬ts (1 percent), indicating a lack of worth.
19. Coworkers™ Attitude (1 percent), indicating a lack of trust.

To get below the surface of the exit survey responses, Saratoga con-
ducted focus groups with respondents to probe further into their reasons
for leaving, and analyzed the content of written survey comments. When
employees are asked to give open-ended feedback, either in writing or
open discussion, they are no longer just responding to prefabricated ques-
tions”they are speaking from their hearts about the needs that were not
Here are the ten most frequently mentioned issues identi¬ed in de-
parted employees™ responses to the question, ˜˜What did ABC Company
(former employer) do poorly?™™

1. Poor Management: The comments were mostly about uncaring, in-
competent, and unprofessional managers, but also complaints
about managers overworking them, not showing respect, not lis-
tening to their ideas, putting them in the wrong jobs, making no
effort to retain them, emphasizing speed over quality, and being

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abusive. There were also many comments about poor or nonexis-
tent methods of selecting managers.
(Issues: Trust, Worth, Hope, and Competence)
2. Lack of Career Growth and Advancement Opportunity: Comments
were mainly about having no perceivable career path, but also
about the company™s failure to post jobs or ¬ll jobs from within,
and unfair promotions or favoritism.
(Issues: Hope and Trust)
3. Poor Communications: Comments were mostly about top-down
communication from managers and senior leaders (particularly the
lack of openness with information) but also about miscommunica-
tion between departments, from the human resources department,
from corporate of¬ces to ¬eld of¬ces, and following mergers.
(Issues: Trust and Worth)
4. Pay: Comments were mostly about not being paid fair-market
value or not being paid in proportion to their contributions and
hard work, but also complaints about pay inequities, slow pay
raises, favoritism in giving raises and bonuses, and ineffective per-
formance appraisals.
(Issues: Trust and Worth)
5. Lack of Recognition: This issue is connected to issues of pay and
workload, but there were many comments about the organiza-
tion™s culture not being one that encourages recognition.
(Issue: Worth)
6. Poor Senior Leadership: The comments were mostly about lack of
caring about, listening to, or investing in employees, but also about
executives being isolated, remote, and unresponsive, providing no
inspiring vision or direction, sending mixed messages, making too
many changes in direction and organizational structure.
(Issues: Trust and Worth)
7. Lack of Training: Comments were mainly about not receiving
enough training to do their current jobs properly, but also citing
poor quality of training, being rushed through super¬cial training,
lack of new hire training, poor management training, and lack of
training for future advancement.
(Issues: Worth, Hope, and Competence)
8. Excessive Workload: The comments were mainly about being asked
to do more with fewer staff, but also about sacri¬cing quality and
customer service to make the numbers.

The 7 Hidden Reasons Employees Leave

(Issues: Worth and Competence)
9. Lack of Tools and Resources: Comments cited a range of issues, in-
cluding inadequate of¬ce supplies, malfunctioning computers,
poor phone system support, outdated technology, and lack of
human resources to relieve overwork.
(Issues: Worth, Hope, and Competence)
10. Lack of Teamwork: Comments were mainly about lack of coworker
cooperation and commitment to get the job done, but also men-
tioning lack of coordination between departments or different lo-
(Issues: Trust and Competence)

What Caused Their Initial Dissatisfaction?
As noted in Chapter Two, employees often experience an initial shock or
disappointment that may ultimately result in their leaving the organization.
At one time, Saratoga Institute included the question, ˜˜What caused your
initial dissatisfaction?™™ in its post-exit survey, but dropped the question after
reviewing the ¬rst 950 responses. As it turned out, the nineteen reasons for
leaving shown in the pie chart in Figure 3-1 were identical to the reasons
for initial dissatisfaction and in the same order from top to bottom!
This lends added weight to the conclusion that most people ultimately
leave for a reason that had as its genesis an event that may have occurred
weeks or months earlier. Again, the key reminder and good news in this
for managers is that there is a built-in period of ˜˜rescue time™™ during which
they have the opportunity to identify the employee™s dissatisfaction and try
to correct it.

A Few Words About Pay
In spite of the fact that hundreds of employees surveyed had worked for
companies that did not pay competitively compared to other companies in
their industries, compensation issues still amounted to no more than 12
percent of all reasons for leaving.
This ¬nding is consistent with the conclusion of Saratoga™s compre-
hensive 1997 report, in which lead researchers Barbara Davison and Jac
Fitz-enz, in their chapter on why employees leave, stated:

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Pay . . . is often a smokescreen, not a primary reason that employees
leave one organization and move to another. Saratoga Institute™s ongo-
ing research into retention shows that less than 20 percent leave for
better pay.
Competitive pay is fundamental to retention; however, the rami-
¬cations of continually ˜˜buying™™ employees are not always in the best
interest of the organization. The remaining employees are always af-
fected, pay plans become ineffective, and the ¬nancial impact can be
far-reaching . . . However, maintaining a competitive pay plan on the
front end and facing up to job and working conditions has a greater
positive effect.3

One of the ¬rst laws of retaining employees is to pay at or above what
the market is paying for similar jobs. Competitive pay is the ticket to admis-
sion for organizations wishing to qualify as employers of choice, yet survey
results make it clear that many companies have not yet purchased that
Regarding the individual employee™s decision to stay or leave based on
pay, Saratoga™s director of research, W. Michael Kelly, observed, ˜˜The rule
of thumb is that in a healthy job market an unhappy employee will bolt the
company for a 5 percent pay increase, but it will take at least an increase of
20 percent to compel a satis¬ed employee to jump ship.™™4 Of course, pay
is more important to some than it is to others. We know that many em-
ployees who struggle to pay their bills can understandably be enticed to
leave for increases of less than 5 percent.

Do You Know Your ˜˜Poach Rate?™™
If you still think retention is mainly about money, ¬nd out how much
it is costing your competition to get people to leave you. That™s called
your ˜˜poach rate.™™ If your poach rate is less than 20 percent, it ain™t
the money, honey! People who love their work, love their boss, and
love their company don™t leave unless the offer is coming from the
”John Putzier5

Several studies have also shown that, in general, salespeople are more
money-motivated than most other workers. And, at the other end of the

The 7 Hidden Reasons Employees Leave

spectrum, we all know individuals whose loyalty to their employer, or to
their manager, is so strong that they have turned down increases of 30
percent or more because they could not imagine being treated better, or
¬nding a more satisfying job, elsewhere. Indeed, we can ¬nd plenty of
these people happily employed at America™s top employers of choice.
In reviewing survey comments about pay from both leavers and stayers,
it is striking how few comments have to do with the actual amount of
salary, bonus, or other incentive. Rather, the key issue seems to be fairness,
or the lack thereof. Employees seem to be frustrated about pay because
they have observed what they consider several kinds of inequities:

• Superior performance reviews have little effect on pay increases.
• Experience is discounted when new hires are paid as much as vet-
• Higher education levels do not translate into higher pay levels.
• Increasing stress and aggravation aren™t worth the money.
• More and more hours make the pay worth less and less.

As Michael Kelly commented:

˜˜What is most disturbing about these beliefs is that they ¬‚y in the face
of an employee™s desire to know and understand the formal and infor-
mal rules for attaining higher pay levels”performance, experience, ed-
ucation, willingness to sacri¬ce and undergo hardships. If these factors
are not linked to increases in pay, they ask, then what is? Pay policies
and practices that do not encourage and support employee commit-
ment present obstacles that even the most capable supervisor will ¬nd
formidable, if not impossible, to deal with.™™6

Respecting the Differences
It™s worth noting that these themes come from the comments of employees
at all position levels in a wide range of industries”¬nancial, pharmaceuti-
cal, medical devices, technology, manufacturing, distribution, insurance,
health care, telecommunications, transportation, computer services, elec-
tronics, consumer products, consumer services, business services, con-
sulting, and other services. The companies were widely distributed
geographically as well, with every region of the continental United States

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In reading the exit survey comments, it quickly became apparent that
two or three key issues were glaringly in need of ¬xing at each company
surveyed. This is not unexpected, but it reminds us that, while most em-
ployees want the top ten things that bring satisfaction, every organization™s
culture is different, and each suffers from a smaller number of issues that
cry out to be addressed.
We also need to keep in mind that, while all employees want trust,
hope, worth, and competence, they may differ as to which ones are most
important at any given time. This may depend on their age or tenure with
the organization, for example, as with younger employees, for whom the
hope and expectation of career growth in the company may be paramount.
Older workers may be more concerned about health-care bene¬ts. Com-
puter designers will want the latest technologies. Some employees will
want to be recognized in a public ceremony, while others will not. When
it comes down to engaging and retaining one employee at a time, effective
managers will respect these individual differences.

Who Has the Power to Meet These Needs?
It should be acknowledged that a manager or organization cannot always
prevent a valued employee from leaving, or even delay the decision to
leave. As we see in Figure 3-2, depending on the degree of employee
control over the decision and the degree of employer in¬‚uence over that
decision, we have four possibilities7:
If we look back at the pie chart showing the reasons survey respondents
left (Figure 3-1), and subtract the unavoidable reasons where the employer
had little or no control over the employee™s decision to leave”retirement,
commuting distance, return to school, start own business, family illness/
circumstances”we are left with 95 percent of the reasons ¬tting into quad-
rant A in Figure 3-2: voluntary and preventable by the employer. Of that 95
percent, more than 70 percent of the reasons are related to factors that are
controllable by the direct supervisor. This conforms to what most of us
already know”that the employee™s direct supervisor has the major share of
control or in¬‚uence to prevent or correct these issues. As the saying goes,
˜˜people join companies, but they leave managers.™™
Well, sometimes they leave companies, too, and the senior leaders who
run those companies. It is the senior leaders who set the direction, who
shape the culture, who approve the pay ranges and the training budget,
whose demands bring stress and overwork, and whose strategies can bring

The 7 Hidden Reasons Employees Leave

Figure 3-2.
Degree of employer/employee control over decision to leave.
Employer Degree of Control
Over Employee Decision to Leave

High Low
Employee Degree of Control


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