The flip side of the recruitment coin is retention. In addition to the obvious connection (the fewer people that leave, the fewer people that must be recruited and hired to replace them), a company with high employee retention also has greater success in recruiting. In our highly-connected world, word gets out about companies that are great places to work, and those companies have more success attracting the top talent they want.
That being the case, it’s helpful to understand the reasons why people choose to stay with some employers, and why people choose to leave others. Enter McKinsey & Company, with some fresh data. They recently surveyed over 13,000 people to understand the factors currently driving employee attrition and retention. Of those respondents, 7,500 people were employed and planning to stay with their company. Almost 5,000 were employed but were planning to leave. And another 1,100 or so were ‘active quitters’ – people who had left their most recent previous employer at some point between April 2021 and April 2022.
Their findings are a valuable, data-rich source of insight into what it takes to hang onto your best employees, and to attract others like them.
Survey Says …
On the surface, some of the results bear out what most employers think of as retention factors. The top overall reason given for leaving a job was the lack of career development and advancement, with 41% of respondents naming that as the main reason they quit their last job. This won’t come as a surprise, particularly for companies in technology fields. Most employees in the knowledge sector look for opportunities to grow their skills, develop new ones, and to take on greater levels of responsibility. The second most common reason also likely tracks for most employers: inadequate total compensation was named by 36% of respondents as the reason they left. In the overheated candidates’ market of recent years, it’s sometimes seemed as though all it takes to dislodge an employee is a call from a recruiter with a higher offer elsewhere.
Going a bit deeper into the survey results, however, some of the results become a bit more surprising.
Digging Deeper
A significant number of employers are focused on creating a flexible workplace. Particularly through and in the wake of the pandemic, companies are offering hybrid or fully remote positions in some cases, and more flexible work schedules in others, in an effort to attract and retain talent. But only one out of four survey respondents cited a ‘lack of workplace flexibility’ as their primary reason for leaving their last job. This isn’t to suggest that creating a more flexible workplace isn’t worth pursuing; far from it. It suggests, however, that there are other factors that play a more significant part in the actual decision to leave.
Intriguing things happen, too, when you begin to look at the overlap that exists between some of the reasons given.
Nearly one third of respondents said that a ‘lack of meaningful work’ was the main reason they left their last job. However, for some people, that lack of meaning may stem from a lack of development and advancement opportunities. In other words, if you believe that you’ve plateaued and your career isn’t going anywhere, that can feel very much like a lack of meaning.
In a similar vein, 34% of people named ‘uncaring and uninspiring leaders’ as the reason they left their last job. A significant part of a leader’s job is to foster a sense of purpose and meaning in work. So, some of those 34% might also belong in the group looking for more meaning in their work.
There may be significant crossover between the 26% who said a lack of flexibility caused them to quit, and the 29% who feel that their employer’s expectations were unsustainable. Likewise, the 26% who felt a lack of support for health and well-being might also have been experiencing the effects of unsustainable expectations, unsupportive people, and uncaring leaders in their last jobs.
Push and Pull
The other thought-provoking breakdown in the survey results is the split between retention factors – those that cause employees to stay with their company – versus the attrition factors that make employees think about leaving. Each of the primary reasons mentioned above tend to fall on the side of ‘retention’ factors, while the related factors tend to increase the risk of attrition.
Meaningful work, for example, is a factor of retention. In other words, it is more often a reason why employees choose to stay with a company, rather than a lack thereof being the reason they would leave. However, the lack of development and advancement opportunities, and uncaring and uninspiring leaders, are factors more related to attrition.
Flexible work environments are a retention factor, whereas unsustainable expectations – one possible ‘dark side’ of the lack of flexibility – is an attrition risk. Support for health and wellbeing is a factor that supports retention, while unreasonable performance expectations, unsupportive colleagues, and uncaring and uninspiring leaders are all factors that can cause employees to look for the nearest exit.
Key Takeaways
Retention – a non-negotiable building block for successful recruitment – means putting focus on both the ‘push’ and ‘pull’ factors: minimising those that can cause attrition, and promoting those that keep your best employees happy and engaged in their work. To prioritise, it can be useful to consider the insights drawn from Kinsey’s large dataset.
Here are the three most important elements we see in the data.
- Provide Meaningful Work (to the extent possible). Empower leaders – by title or otherwise – with the capacity to foster a sense of meaning in the work. However, don’t overlook the fact that to some people, meaning is defined in terms of continuous development and learning, and greater levels of accountability. Finally, if you’re not compensating your people accordingly for the work, you’re at greater risk of attrition (and you’ll find it very difficult to attract others).
- Offer Adequate Flexibility (to a reasonable degree). If you’re able to offer hybrid or remote options to your employees, it’s certainly worth considering. But hybrid and remote aren’t the be-all-end-all. Just as importantly, ensure that the workload for your employees is manageable, and allows them to set appropriate boundaries between work and the rest of their lives.
- Support Employees’ Health and Well-being (as much as is reasonable). Healthcare support and other formal wellness programs may be part of this. As may be the balance mentioned above. Less formal but equally important is creating a culture in which leaders and staff alike feel free to talk openly about self care and managing well-being.
With dozens of new articles and news items every day promoting creative new ways to attract and retain employees, it can be overwhelming and dizzying to narrow focus on the things that will actually produce the results you want. We hope this summary of McKinsey’s data helps you do that.