Why Good Employees Leave: Signs That Your Top Talent Might Quit
Employee turnover is a bigger problem than ever. In 2021, 53% of HR executives reported increasing employee turnover in their organizations, and 20% of HR executives said turnover had increased significantly.
An organization with 100 employees and an average annual salary of $50,000 can suffer employee turnover costs of $600,000 to $2.6 million each year. Overall, employee attrition costs U.S. businesses $1 trillion per year.
These are just the costs that can be quantified in dollars. Employee turnover also reduces productivity. Separated employees take valuable knowledge with them, and reduced staffing strains your remaining teams, which can cause even more employees to leave.
Additionally, it’s your best employees who are most likely to leave if they’re unsatisfied because good employees have the most job opportunities.
Solving employee turnover issues in your organization starts with understanding why good employees leave at a granular level. This means identifying key factors that increase attrition risk, actively observing them, and taking a proactive approach to retaining your most valuable team members.
At Praisidio, we help corporations see in real-time which employees are at risk of departure. In this article, we reveal the key metrics and signals we use to predict which employees are likely to quit prematurely.
Burned out by workload
Burnout is much worse than simply feeling worn out from a sprint of hard work or an intense project. Employee burnout is a chronic sense of mental and emotional exhaustion that can be severe enough to cause physical exhaustion.
The chronic nature of burnout is why it has such a big impact on employee attrition. Burned-out employees typically feel pessimistic, out of control, and hopeless. An employee who feels this way is very unlikely to stay in their current job.
Employee burnout itself is difficult to observe because not everyone will admit to feeling burned out. However, there are quantifiable indicators of employee burnout that can help you identify employees who are experiencing burnout before it’s too late:
Increasing out-of-office days
Isolation is a key symptom of burnout. Employees with hybrid work arrangements often start working more from home than they do in the office.
Working from home in itself is fine. However, it can indicate a problem if an employee’s ratio of in-office days vs out-of-office days starts to shift away from what’s average for them, their team, or a particular cohort.
More frequent absent and sick days
When an employee starts to feel burned out, they’ll often miss work more frequently than usual. Most employees will take more sick days. However, some people will show up late more than usual or even just miss work altogether.
Now, sick days happen and even good employees occasionally show up late. It’s a relative increase in sick days, tardiness, and absenteeism that may indicate an employee is experiencing burnout. Keep an eye on the trend, rather than absolute numbers.
Unmanageable weekly meeting load
Meetings are a necessary part of work. However, most meetings aren’t for getting work done. They’re for planning and collaborative problem-solving before everyone goes back to their desks to get things done.
Too many meetings or poorly scheduled meetings eat up work time. Track how many meetings employees must attend and examine when meetings are scheduled. Ideally, everyone should have blocks of hours dedicated to doing the core work of their job position. We call these hours “Maker Time.”
Employees who don’t get these hours to do their work feel like they have a lot to do and no time to do it, which contributes to feelings of powerlessness and disconnection.
Reduce overall meeting loads or strategically schedule meetings to ensure that employees have plenty of uninterrupted time to dig into their work.
Excessive project load
Sometimes employees have more work than they can handle. This issue can be especially costly because it often impacts high-performing employees the most.
Managers and business leaders usually want their best people working on the most important projects. Unfortunately, it’s often the case that all projects are seen as equally important. The result is that the most competent employees unintentionally get overburdened.
The solution is to track project loads to make sure project assignments are fairly distributed and that you’re not leaning too heavily on a few key contributors.
Like the other indicators we’ve mentioned, the key is to look for changes in employee behavior. Each employee has different baseline behaviors. Deviations from that baseline are the biggest indicators of burnout.
This is why actively observing employee metrics is so important. It’s nearly impossible to spot behavioral change without consistent data collection and analysis.
Disconnected and disengaged
A company is a network of personal and professional relationships. Without strong workplace relationships, employees become disconnected from their work and their peers. Employees who feel disconnected are much more likely to quit than those who feel personally and professionally engaged.
However, these relationships don’t happen all on their own. Working relationships need to be fostered and maintained, and when one person leaves the organization, it impacts everyone that had a relationship with the separated employee.
The first key takeaway here is that your organization must invest in building relationships across teams and departments. It takes some time, effort, and energy, but it will make your company more resilient.
The other important point is that it’s never safe to assume that just one person will leave the organization. Often, one valuable employee leaving causes a domino effect that leads to many people leaving.
Similar to employee burnout, a feeling of disconnection can be difficult to spot through employee surveys. The following indicators give you a clearer picture of whether or not your workforce is developing strong relationships.
Infrequent catchups and 1-on-1 meetings
Although it’s possible to put too many meetings on the calendar, zero meetings is the wrong number of meetings. Getting together to share ideas and collaborate on solving challenging problems is valuable. Meetings also give people opportunities to develop stronger relationships and a sense of connection to their team and tasks.
This goes for informal catch-ups with colleagues, skip-level meetings, and direct manager meetings. It’s especially important that managers and leadership take the time to sit down with each employee and exchange feedback.
The perfect number of meetings will vary from team to team, but there should be some meetings on the calendar. Nobody can truly do their job by themselves, so it’s actually less productive if employees never get together to collaborate.
Try to be aware of changes to meeting frequencies, more or less manager or skip-level meetings, or a complete lack of meetings. These are strong signals that something may be wrong.
High manager attrition and frequent management changes
Managers are a huge piece of the employee experience. There’s a reason for the adage that people don’t quit jobs, they quit managers.
However, this also goes the other way. When a good manager quits, their team will often quit in short succession. Hiring a good manager mitigates this sort of attrition, but good managers are hard to find.
Increasing peer and collaborator attrition
The people an employee works with are a huge part of the employee experience, and employees often find another job after the people they work with leave. It’s similar to the impact of manager attrition.
However, the effects of peer and collaborator attrition compound with manager attrition. If a manager leaves, it can cause one or two of that manager’s team to quit. Then the combination of manager turnover and peer attrition causes more people on the team to leave.
In short, employee attrition can cause runaway employee attrition. Intervene as early as possible if your employee attrition rates start to rise.
Not feeling recognized
Recognition is a big deal. Being recognized for a job well done is important to people. Unfortunately, recognition often gets treated like it’s not a big deal.
81 percent of business leaders say that employee recognition isn’t a priority for their company. Yet, just 23 percent of employees report being satisfied with the amount of recognition they get at work.
Clearly, there’s a mismatch here. Businesses often fail to give recognition because they believe it should happen organically or that people know when they’ve done a good job.
Unfortunately, this just isn’t the case. People give praise far less than they should, and even incredibly competent employees are often underconfident in their work.
Making people feel recognized for their work is essential, and it requires an intentional effort to make sure people are getting the praise and rewards they deserve.
Recognition policies are underdeveloped
If you have no guidance in your company documentation about giving recognition, it’s most likely not happening enough.
It might seem childish to have specific policies such as requiring supervisors and managers to give praise to at least one team member during every team meeting. However, people need clear, precise direction when it comes to giving praise.
Bottom line: if you don’t have official guidance and recognition programs, your employees will feel under-recognized, which increases the likelihood that they will find another job.
Tangible rewards are inequitably distributed
Tangible rewards such as bonuses are valuable. Employees like them, but many companies don’t even offer tangible rewards as a part of their recognition programs. Implementing some sort of bonus or other tangible rewards program is the first step.
However, these rewards also need to be equitably distributed. A recognition program ceases to be an incentive if the rewards aren’t spread around.
Check the historical data on who’s receiving bonuses and other rewards and make sure that everyone is getting a slice of the pie. Otherwise, your recognition programs could be making your teams feel less recognized, which is the opposite of the intent.
Compensation is a common reason for employee attrition because pay is important to people, and it’s easy for employees to do a little research to find out if they could get a pay raise by switching jobs. Roughly 50% of employees who plan to quit their job are quitting to find a job with better pay and benefits.
This isn’t a secret. Companies understand this, but they often fail to track metrics that give a good assessment of how well their workforce is compensated and precise information about who’s most likely to quit because of pay issues.
The best predictors of pay-related employee attrition are comparative metrics. Humans intuitively think in comparative terms, so people feel most unfairly compensated when their compensation stacks up poorly against other professionals in their industry, and rightfully so.
As such, these are the indicators we’ve found to be most informative in the realm of compensation.
Position in range
Position in range shows how much an employee is being paid as a percentage of the maximum salary for that employee’s job position.
If an employee works in a position with a salary range of $100,000 to $200,000 and gets paid $120,000, the position in range would be 20 percent because the salary band for that position is $100,000, and the employee gets paid $20,000 above the minimum of the salary range. The formula for calculating position in range looks like this:
Position in range shows you how much more an employee could be paid before reaching the maximum market salary rate for that position. It also identifies the employees who are being underpaid, relative to their peers, which tells you who’s most likely to quit because they feel unfairly compensated.
External compa ratio
External compa ratio compares an employee’s pay to the midpoint of the salary range of the market for that position. It quantifies how fairly an employee is being compensated relative to their peers in the industry.
This is the formula for calculating compa ratio:
An external compa ratio of less than 1.0 indicates that an employee is paid less than the midpoint of the salary range for their position, and is probably at a higher risk of quitting to find a better-paying job.
Internal compa ratio
Internal compa ratio is calculated in the same way as external compa ratio, and an internal compa ratio of less than 1.0 indicates an increased risk of salary-based attrition. However, internal compa ratio measures an employee’s salary against the midpoint of the salary range for equivalent positions within your company.
Checking your internal compa ratio is important because an employee is still being unfairly compensated if they’re making less than others in equivalent positions in your company, even if their salary is high in comparison to the market rate.
Pay raises are standard practice in most industries. However, raises need to be meaningful.
Therefore, you must take a data-driven approach to your pay increase structure. Most cost-of-living raises are less than the actual increase in the cost of living for the area because they’re set based on some arbitrary traditional standard or calculated using data that is far too broad to be relevant, such as global or national cost-of-living data.
Historical data on company pay raises should be compared to historical cost of living data for your region, and your pay increase structure should reflect the real cost of living for your employees.
No path for professional growth and development
Employees, especially your most productive employees, want opportunities for career advancement. A clear path for professional growth gives people a sense of control over their career and makes them feel like there’s a long-term payoff for the work they’re putting in right now.
When a good employee feels stuck in their career, they’re going to find a way to advance. If they don’t see a path for career advancement in your company, they’re going to look for opportunities in another company.
These are the data points that give you insights into how many opportunities for advancement there are for each employee.
Time in role
Greater time in role might seem like a good thing. An employee who’s been in their position for a long time brings a lot of experience to the table.
However, being in the same role for a long time can also indicate that there’s not much opportunity for an employee to move up in the organization or they’re not getting the skills they need to advance into a new position. High time in role can indicate that an employee is stagnating in their career and may be looking for external opportunities.
Be aware that relying on time in role alone won’t give you a complete picture of how an employee feels about their career prospects. Combine time in role with these next two metrics.
Number of job changes
Number of job changes gives you an idea of how likely it is that an employee will jump ship to advance their career. On its own, the number of job changes is a slightly more informative data point than time in role, because it’s more closely tied to the employee’s behavior.
When combined with time in role, the number of job changes offers a strong indicator of how likely it is that an employee will voluntarily separate to move up in their career.
Tenure with your company gives even more insight into how much opportunity for advancement an employee is getting. If an employee has been with your company for a long time and has been in the same role for a lengthy period, that’s a strong indicator that the employee may not have a clear path for advancement within your organization.
When you combine tenure, time in role, and the number of job changes, it’s possible to precisely predict which employees are most likely to leave for a better-paying or more challenging role in a different company. With Praisidio, it’s possible to look up to six months ahead so you have time to take action and retain those employees.
How to keep good employees
The key to retaining good employees is prevention. That means you need real-time data on each of the attrition indicators laid out in this article.
In the past, it was common to rely on employee and manager surveys as the primary method of data collection. However, as these are lagging indicators, surveys are only able to identify a problem once it’s too late. This makes timely intervention nearly impossible.
Additionally, many indicators are not predictive in isolation. They must be combined with other indicators to generate a clear attrition risk factor for each employee.
Another issue that hampers HR teams is the shortage of people and skills to aggregate and analyze data. Competent analysis is needed to spot trends and create actionable steps for effective intervention.
The fix is to more efficiently leverage the data you have.
Praisidio tracks your most important data points in real time and pulls them together into a single dashboard, where you can see flight risk and root causes per employee. Presidio is able to predict turnover up to 6 months in advance, so you have time to intervene before employees start making exit plans.
Praisidio clients typically reduce employee attrition costs by over $10 million for every 2000 employees. Praisidio also helps companies recapture 90 person-years annually for every 1000 employees, reduces burnout, and enhances workforce productivity.
Book a demo to see how much Praisidio can help you keep your best employees and save millions.