Why employees leave, and how to make them stay

Replacing employees is an expensive business. It can cost as much as one fifth of the annual salary of the worker who is quitting. So how can employers encourage their workers to stay?

According to jobs site Glassdoor, the main reason people leave a job is to go to a firm with a better company culture.

Glassdoor looked at the job changes undertaken by over 5000 people, and found that employees nearly always moved to an employer with better ratings in six measures of company culture: overall rating; career opportunities; compensation and benefits; culture and values; work-life balance; and quality of senior management.

How can companies hold on to employees?

But there were also clear reasons for employees to want to stay in their current workplaces. Glassdoor compared the ratings and reviews of companies on its website (there are over 600,000 of them) with their staff turnover, and found that a company’s overall rating and the career opportunities it offered, as well as its values, were high on the list of employee priorities.

A one-star increase (on a scale from one to five) in overall company rating raises the probability that an employee will stay in that company for their next job by 4%. The same increase in career opportunities and culture and values makes employees 5% more likely to look in-house for their next move.

Unsurprisingly, pay is also high on the list, though it’s not the most important factor. A 10% increase in base pay makes an employee 1.5% more likely to stay. That’s despite the fact that workers receive an average 5.2% pay rise when changing jobs to another company.

Interestingly, work-life balance had little effect on the survey’s findings. Nor did whether employees liked their bosses.

Glassdoor’s findings are supported by an academic study which found that companies with higher ratings got more job applications and lower salary requests.

How long do employees stay in a job?

The average amount of time spent in a job is 15 months. However, employees working for the government stayed longer – on average 18.6 months. Workers in the aerospace and defence, media, IT, telecommunications and non-profit sectors also remained in their jobs longer than average.

Construction workers, on the other hand, switched jobs on average every 10.6 months. Other fast-turnaround industries included biotech and real estate.

Employees are also more likely to quit around their first, second and third anniversaries in a job. Glassdoor suggests this is because that’s often when employers conduct annual reviews.

Glassdoor says employers boost their chances of retaining staff by improving workplace culture, making pay competitive and ensuring people can progress up the career ladder.

For employees looking to advance their careers, research suggests that taking a job with a new company may not be the right move. A paper by the Wharton School of the University of Pennsylvania found that employees receive the greatest long-run benefits by taking different roles at their current company. By contrast, switching employers led to initial increases in pay but smaller career advancement benefits.