7 Reasons for Low Employee Retention

Does your business seem like a revolving door for employees? Does it seem like no one wants to work at your company, or people just seem to quit for no reason? Constant employee turnover can be a problem, but there’s always a reason. High turnover doesn’t happen without a cause.

A recent study found that the average annual turnover in the US about 20%. And they also concluded that about two-thirds of that is voluntary. Some industries tend to have higher retention rates than others. For example, turnover rates tend to be higher in industries such as retail and hospitality compared to government and finance-related jobs. Here’s a short one breakdown of average turnover rates by industry during the past year.

  • Construction: 53%
  • Manufacturing: 39%
  • Trade, transport and public services: 54%
  • Information: 37%
  • Financial activities: 29%
  • Professional and business services: 63%
  • Education and health services: 38%
  • Leisure and hospitality: 82%
  • Government: 20%

A few other things could be influencing these numbers. Some of these industries were affected by the Great Resignation that began in late 2022. But overall, these numbers reflect the average over the past 3 years or so.

It is important to know the cause in order to find the right solution. Here are some common reasons for low employee retention.

Toxic work environment

Everyone has a bad day now and then. Even in the best jobs, there is bound to be the occasional conflict or misunderstanding between colleagues.

But a toxic work environment goes far beyond that, making people hate their jobs.

A toxic work environment can make existing physical health problems worse and can even create mental health problems. These results of a toxic work environment are not just a person’s imagination.

There are many signs that a work environment is toxic. One of the signs is the way co-workers handled conflicts. Do people handle conflict by yelling at each other? They either try to work it out with each other collectively or involve management resolve the conflict?

Another area to consider is how well and how involved everyone is. Are there team members who are routinely excluded from participating in work or after-work activities? Isolating employees can lead to things like cliques forming. This hurts workplace unity and also makes it more difficult to maintain a strong collaborative effort with everyone. Which one

If harassment, intimidation, or gossiping is tolerated, you are helping to create a toxic work environment. This will make your good employees to stop worrying about their jobs and encourage them to quit.

Lack of growth opportunities

Your most ambitious employees will be looking to grow their careers and would like to know that there is a future for them. According to the US Bureau of Labor and Statistics, the average amount of time employees stay at a job is about 4.1 years. This means that in the 2020s, most workers will not stay in a job for more than 5 years. While you can’t keep your employees forever, providing opportunities for growth can help them stay longer.

Most employees know that it takes time to prove yourself in a new job. But at some point, if there are no opportunities for growth, employees may have no choice but to go elsewhere.

This could be true for employees who don’t necessarily want to be promoted, but just want a different challenge. Lateral job changes, i.e. jobs at a similar level, can offer a nice change of pace. Companies that allow a manager to block these types of transfers may do so under the guise of “we need you here.” This can leave employees with no choice but to go elsewhere.

Lack of recognition

How are your employees recognized for their efforts? How often are they shown appreciation? Lack of recognition can cause employees to become discouraged. Employee recognition doesn’t always have to be a monetary bonus. Here are just a few ideas:

  • Say “thank you” for a job well done.
  • Recognize each person’s birthday.
  • Celebrate days in your industry, especially those that workers appreciate, such as the Day of Administration Professionals.
  • Provide special rewards for goals employees have achieved.
  • Provide free snacks, drinks or meals when the team works overtime or during holidays.

Recognizing employees is not only great for retention, but it’s also a great way to do it improve employee morale. There are many different ways to reward your employees and recognize their hard work.

Bad management

Have you ever had a boss for your idea? Instead of giving you credit, he or she takes the idea and takes the credit. This is a manager’s strategy that decreases employee engagement.

Positive and productive managers give credit where credit is due. They are kind, but fair. They refrain from gossiping and enforce the rules fairly. Effective managers proactively communicate with employees. This helps people know what is expected of them so that problems can be prevented.

Ineffective managers may gossip about those around them. This hurts morale. A manager with poor communication skills will leave his team members wondering what is going on, and this can create problems. A manager who hesitates or completely refuses to address problems can also damage morale.

There is a big list companies that failed due to poor management. So many other small and medium businesses don’t stand a chance if they are consistently poorly managed. Losing employees is just one of the effects of poor management. Learn to evaluate your leadership and management philosophy, type of leadership, and a skill set to improve your overall retention rate.

Improper compensation

Employees who learn they are underpaid can spread the word on their way to a better job offer. This could result in referrals to a competitor. Paying employees fairly can avoid this problem. And, in the digital age of sites like Glassdoor, it’s easier than ever for employees to find out if your company is known for fair or unfair pay policies.

Lack of purpose in work

Everyone works on the weekend, but it helps to find purpose at work. Do your employees have a sense of purpose in what they do? Especially in jobs that are mundane or repetitive, is there a way to connect each employee’s work to a larger mission or purpose?

To help employees find purpose in their positions, start by aligning the company’s vision and values ​​with individual employee goals. This will help them see the bigger picture and understand how their work contributes to the overall success of the organization. You can also find ways to allow employees to communicate and express their opinions and ideas.

Also, encourage them to develop their skills and interests and take ownership of their tasks. By using their individual talents and having a sense of ownership, they can take more pride in their work because they can better express their uniqueness. While responding well to the responsibilities that have been given to them.

Employees want to feel that what they do matters. If a job feels boring and purposeless, it can make people feel not only disengaged, but feel like there’s no reason not to pursue other options. What kind of purpose does your company offer your employees?

Bad working conditions

Imagine getting up early for work because you’re also doing someone else’s job. The office is dark, with harsh artificial lighting. You leave your things on your desk. Then you stop to use the toilet, which stinks to high heaven. You return to your desk, noting how dirty the floors are. Glad to be in an area that doesn’t smell, you flop into the chair. You forgot how bad this chair hurts your back!

Do you see any of the poor working conditions in this picture?

  • Darkness is not an ideal working environment. Also, natural lighting should be there whenever possible.
  • No one should have to sit in a painful chair.
  • A clean work environment is essential.
  • Finally, make sure your group is fully equipped help your team avoid burnout.


Many companies face the problem of low employee retention. This problem can cost time and money, but proactive companies can take steps to avoid it. Knowing the most common causes of low employee retention is the first step to solving this complex problem. Additionally, being aware of these causes can help your organization address and resolve the issue.

Erin Shelby on Twitter
Erin Shelby

Staff Writer: Erin Shelby is a writer and blogger based in Ohio. Follow her on Twitter @ByErinShelby

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Item tags:

Company Culture · Find Your Way · Grow Your Business · Leadership · Productivity · Success · Your Mindset

Article categories:

Find your way · Grow your business · Lead your team · Productivity · Your mindset

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Employee retention is a key factor for business success and for any company that desires to grow. With increasing competition and the ever-changing digital landscape, it’s becoming ever more important to foster a productive working environment. Ikaroa understands this and seeks to provide a support system that keeps people engaged and motivated. Here are 7 reasons why employee retention can be a challenge and how Ikaroa can help:

1. Unclear job expectations: Without a clear explanation of expectations, employees may feel ill-equipped to meet the challenges they face. Ikaroa works with management to ensure that job responsibilities are made crystal clear so that employees can feel confident in their abilities to meet the company’s expectations.

2. Poor Benefits: Employees tend to stay if the company offers competitive compensation and benefits. Ikaroa can help to ensure that employees feel appreciated with market-competitive benefits packages.

3. Lack of recognition: People like to feel appreciated for their work and lack of recognition can have a major impact on their engagement and commitment to the organization. Ikaroa helps to provide incentives and reward systems that encourage people to be productive and feel appreciated.

4. Not enough growth opportunities: Employees need to know that there is room to grow and develop professionally. Ikaroa works with businesses to create programs and incentives that provide clear paths for growth and development.

5. Poor Management: In some cases, management can be the reason for employee turnover. Ikaroa can help ensure that your management team is properly trained and understands how to motivate and lead employees effectively.

6. Stagnant work environment: Without the opportunity for new challenges, growth, and innovation, employees will likely become disengaged and eventually look for alternatives. Ikaroa provides the tools and resources to foster a productive and engaging work environment.

7. Poor culture: A workplace culture where morale is low and the environment hostile are major causes for why employee retention is a challenge. Ikaroa offers the resources and workshops to build a supportive and creative company culture that keeps employees engaged and motivated.

Employee retention is an important component of organizational success and Ikaroa is well positioned to help companies achieve its goals. With the right strategies and resources, Ikaroa can help to foster a productive and engaging work environment that encourages employees to stay and grow.


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