Most of your company's expenses are unavoidable, but employee attrition is one of the costs that you can have significant control over. Employee attrition can cost six to nine months' worth of the departing worker's salary, so it's in your best interests to find ways to address employee attrition head-on. Of course it's necessary to create a culture in your organization that makes people want to stay -- but it's equally important to be able to recognize which employee is planning to quit next. Research into employees quitting provides some actionable insights:
Demographics most likely to quit
Over half of employees who leave their jobs do so within the first year, according to a study by Equifax. This statistic indicates that the early phases of your new hires' careers are the most sensitive and that you should pay extra close attention to new hires who show continuing signs of disengagement at the workplace. To this end, it is important to focus your onboarding program on how to engage employees as quickly as possible to avoid high turnover. It's also helpful to be aware of which industries have the highest percentage of employee turnover. The average turnover rate in 2015 across all industries was 16.7 percent. However, the banking and finance industry saw an 18.6 percent turnover rate, the healthcare industry was at 19 percent, and the hospitality industry topped the list with a whopping 37.6 percent employee churn rate.
Specific traits that mark a quitter
While knowing that your industry tends to have especially high turnover rates can cause you to be more alert to the risks, it also helps to know what specific traits to look for in your employees. Research conducted at Jon M. Huntsman School of Business at Utah State University yielded an actionable set of behaviors that you should be watching for. If employees display at least six of the behaviors listed in the Utah State University study, the likelihood they are planning to quit in the near future reaches 80 percent. Top behaviors listed in the study include:
- Less focus on the future: Since they know they won't be around as projects are completed and rolled out, workers planning to quit in coming weeks tend to show markedly less willingness to sign onto long-term projects. They may also pass up opportunities for training and development, and show less interest in advancing to higher positions within the company.
- Less connection to work: As they begin to withdraw and their engagement level drops, workers planning to leave soon tend to display lowered productivity. They'll come up with fewer new ideas and suggestions for innovation, and they won't go beyond the required minimum effort.
- Less social energy: Employees likely to quit soon begin to retreat from normal socializing at work. They become "more reserved and quiet," and they also avoid interacting socially with their boss or other managers.
Employee engagement is a reliable indicator. Reviewing the problematic behaviors listed above, it becomes obvious that they all describe a worker who is not engaged. The direct correlation between engagement and retention is further demonstrated by the USU's list of behaviors that don't correlate with quitting: If you have an employee who suddenly schedules a lot of doctor's appointments, shows up at work in a suit, or even leaves a copy of their resume on the copier, you may want to check in with that person -- but (contrary to conventional wisdom) those actions don't necessarily indicate that the worker plans to quit. And, interestingly, these non-problematic behaviors can all occur in a fully engaged worker. Predicting employee attrition, then, becomes a matter of being able to recognize lack of engagement, rather than other less reliable markets.
Developing your action plan
Using employee recognition as an indicator enables you to identify your most loyal employees. These top performers are the ones who are not only engaged in producing high-quality work, but they're also the ones who reach out to recognize their colleagues and promote an atmosphere of warmth and recognition within your organization. Conversely, once you find out which people are most engaged with their coworkers, you can also more easily become aware of the ones on the opposite end of the spectrum: the employees who are retreating from engagement and showing signs that they might quit.
Recognizing coworkers is a solid sign of engagement
According to a recent Achievers study, it was discovered employees who were about to be promoted sent an average of 3.8 times more recognitions than their coworkers; meaning active recognizers are more likely to be promoted within their organization as opposed to non-active recognizers. Those employees who feel appreciated and engaged tend to reach out to express active recognition of their colleagues are more likely to stay than quit, and they're also the ones you need to nurture and groom for leadership roles.
Once you identify the members of your staff who are in greatest danger of quitting, you can develop managerial practices to build employee morale and loop the outliers back into a sense of alignment with the company. A desire to be recognized and appreciated for the work that they're doing is one of the primary reasons that people quit their jobs, and a Forbes survey found 79 percent of employees "don't feel strongly valued for the work they put in." That same article stated, "When you take into consideration the high cost of turnover and an increasingly improving job market, these findings ought to get you thinking about your own recognition strategies. How can you expect employees to stay at your organization if they're not getting the appreciation they deserve?"
Don't lose top talent and take action immediately by developing the right employee recognition strategy for your business. The more you increase employee recognition, the more you'll increase employee retention and engagement as a result. To learn more about how you can increase employee retention through a culture of recognition, download our Ultimate Guide to Employee Recognition.