WHY DO WORKERS LEAVE? Insight into who decides to quit and the reasons why - HR.com

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<style></style>After nearly three years of little to no job growth, a potentially sustainablejob recovery seems to be close at hand. However, the unemployment rate is stillteetering at historically higher levels, and with approximately 3.7 millionjobs available for 12.5 million unemployed,¹ it’s difficult tounderstand where a war for talent may be coming from. Yet, a recent government survey²found that 51 percent of job separations were due to quits — the first time since2008 that quits outnumbered layoffs. And more trouble with retention may lieahead for employers as revealed in the 2012 Aflac Workforces Report.³The latest study found that nearly half (49%) of employees are likely to lookfor a new job this year, with the majority of those identifying themselves astop performers with their company. For employers, curbing turnover costs have been a daunting task fordecades, and now that the ongoing war for talent is accelerating, the abilityto retain workers is more pertinent and more challenging than ever before. Asthe job market slowly transitions to becoming employee-driven, understandingwhy workers leave may be the key to business success. In fact, the employment approachthat organizations chose during the economic downturn will decidedly come backto either hurt or help them as the employment market continues to improve.Organizations that haven’t already made retaining their top talent apriority will need to do so quickly. As HR decision-makers analyze the bestmeasures to prevent an exodus of workers, the second annual Aflac WorkForcesReport provides important insight into why workers leave. The study of morethan 6,000 workers analyzes the mindsets and attitudes of employees who areconsidering leaving their job and those who aren’t. Findings from the reportreveal practical insights for employers who aim to increase employee retentionand strengthen their bottom line. Profiles of ExitingEmployees Not surprisingly, a recent study by the Society for Human ResourceManagement (SHRM),⁴ reveals that the majority of HR professionalsand managers surveyed agreed that turnover will rise significantly once the jobmarket improves. Further, they also feel that the job market will improvewithin the next year. Coupled with the results from the Aflac study regarding employees’intentions to stay with or leave their employers, these latest survey findingsshould have companies asking themselves: Which employees are poised to leave?Unfortunately for employers, a majority of those employees who say theyare extremely or very likely to leave their jobs describe themselves as thekind of workers that companies need to retain the most to stay competitive in atight economy. The Aflac study found that those most at risk of leaving sharethese qualities or traits — hard working (90%), high achiever at work (79%),highly educated (73%), and ambitious, strives to get ahead (64%). They are also more likely to be younger members of the workforce. Nearlyhalf (42%) of employees under the age of 34 are the most likely to look for ajob in the next 12 months, versus 53 percent of those between the ages of 45and 64 — who say they are not very or not at all likely to look for a job.Beyond the characteristics that make up these at-risk top performers,the Aflac report uncovered several distinct reasons why these workers are considering an exit. · They are likely to be physically and financially stressedout. The Aflac studyfound that workers who said they are stressed out are nearly twice as likely(43% vs. 25%) to leave their job compared to workers who are not stressed.Another quarter (28%) of employees who are extremely likely to leave their jobsin the next year say they don’t have peace of mind. The Aflac Report also finds that workers most likely to leave their employersare considering doing so because of financial concerns. Nearly half (49%)believe their families will not be financially secure in the event of anunexpected emergency, and 17 percent of those looking for a new job believethat the financial condition of their household will worsen in the next 12months. Interestingly, the majority (55%) of those not likely to look for a jobalso say that saving for retirement is the biggest financial challenge facingthem in their life right now, opposed to a staggering 78 percent of thoselikely to leave their employers who have delayed retirement because theybelieve they are not financially prepared to leave the workforce. · They feel their employer is not taking care of them.The degree to which workers feel their employer takes care of itsemployees weighs heavily on their loyalty or lack thereof. For example, nearly 4-in-10(38%) of workers who don’t feel their employer takes care of its employees arelikely to leave in the next year, compared to 76 percent of those who agreethat their employer takes care of its employees and are unlikely to look foranother job. Furthermore, 32 percent say that retaining employees is not animportant issue for their organization. Additionally, 38 percent of those likely to look for a new job say thata comprehensive benefits package demonstrates that their employer cares about them.Yet, 57 percent said that having a comprehensive overall benefits package willplay an important role in a decision to leave a current employer. This showsthat companies with underperforming or noncomprehensive benefits programs maybe in danger of losing important members of their workforce.· They don’t believe their company has a greatreputation.Although a company’s reputation in the marketplace as a great place towork may seem like something nice to have, the Aflac report found thatreputation greatly influences whether workers are likely to be loyal or not.The report found that 35 percent of workers who don’t believe their company hasa reputation as a great place to work are extremely likely to leave in the next12 months. This compares to a full 40 percent of workers who believe theircompany has a great reputation and who say that they are very unlikely to lookfor a new job in the next 12 months. · They are largely dissatisfied in their jobs.Not surprisingly, a decisive factor in employee retention is overall jobsatisfaction. The Aflac study found that while only 6 percent of extremely satisfiedworkers say they are likely to leave their jobs in the next year, more thanone-quarter (27%) of workers who are not very or not at all satisfied withtheir jobs are extremely likely to leave in the next 12 months. About anotherhalf (47%) of workers who are arguably going through the motions by indicatingthey are only somewhat satisfied with their jobs also say they are extremelylikely to leave in the next 12 months. How Can EmployersStem the Tide With High-Risk Workers?Whether by choice or otherwise, the majority of companies have becomecomplacent in recent years during the enduring employer-driven market. Formany, watching the bottom line trumped any efforts to retain or take care ofemployees as well as they did during pre-recession times. However, as isevidenced by the Aflac report and others, the consequences of these actions, orinactions as the case may be, are now impacting the ability to retain workersand particularly top performers. So how can business leaders and HR executives begin to stem the tidethat is building as we move closer to an employee-driven market once again?There are several best practices and important actions to pursue to prevent toptalent from walking out the door.Assist Workers in Easing Stress — Physical andFinancialStreamlined staff levels and higher productivity expectations have leftmany U.S. workers lacking in the work/life balance arena. Struggles with theday-to-day workload have contributed to rising stress for workers. To makematters worse, the recession caused financial distress for many workers with 51percent trying to reduce debt and only 8 percent saying they will befinancially prepared in the event of an unexpected emergency.³ Allthese combined factors translate into an overworked and highly stressed-outworkforce, which can greatly impact employee health and productivity.For instance, individuals with stress caused by large outstanding debtsand unstable financial situations report incidences of ulcers and digestiveproblems, migraine and other headaches, anxiety, depression and even heartattacks at rates between two and three times higher than the national average. Andfinancially stressed employees experience higher absenteeism and turnover,lower levels of job satisfaction and lower productivity.⁵Without question, American workers are facing a difficult, uphill battlewhen it comes to their financial health. More than half (58%) don’t have afinancial plan in place to handle the unexpected.³ The impact ofrecent economic downturns, corporate layoffs, and hiring and pay freezes haveleft the workforce vulnerable. At the same time, companies have beenpreoccupied with maintaining the bottom line and have often disregarded thevalue of a financially-stable worker. There are several best practices or services that anorganization can consider to help support its workforce in overcoming financialstress. · Education: Gobeyond general retirement planning or employer-sponsored savings accountprograms. Implement education programs, seminars or online courses to emphasizethe prevention of financial problems through money-management skills, such ascredit use, budgeting and tax planning. Be sure to offer follow-up refreshercourses as a way to curb information overload and confusion. · Treatment-Oriented programs:Consider offering credit counseling and debt management services to yourworkers, or refer them to nonprofit or community-sponsored programs that may beavailable to them. · Psychological Assistance:Counseling and EAP programs can help employees cope with the mental stress thatcan influence work performance and overall job satisfaction. However, manyworkers aren’t aware that EAP services include financial assistance andsupport. Last, be sure to offer such financial education and supportat relevant times, such as at tax time, rather than just at annual enrollmentor new hire. Chart 1 – Influenceof Worker Financial Health on Decisions to Leave³ Beyond diminishing financial stress, implementing flexible workarrangements or options is an effective way companies can decrease overallworkload and physical stress, moving the dial on worker retention. Nearlyone-third (32%) of employees say offering more flexibility in their workschedules would keep them in their jobs. Another 82 percent say having aflexible work schedule would have an impact on their ability to cope withpersonal issues, and 56 percent say it would have a strong/very strong impact.³It is very clear that workers want andneed work/life balance options but employers aren’t providing adequatesolutions. Only 28 percent of companies offer flexible work options.³Despite the belief of many organizations that a down economy is not thetime to invest resources (financial or otherwise) in these programs, now isperhaps the best time to do so to remain well-positioned after an economicrecovery. Organizations that are currently offering such programs need to activelypromote their work/life balance options among employees and candidates, as wellas encourage staff to take advantage without fear of a negative impact on theircareer.Offer Robust Benefitsto Help Demonstrate That You Care About Your WorkersAs indicated in the Aflac survey, a company’s benefits offerings areoften indicative and interpreted by employees as how much they matter to theiremployers. There is undeniable evidence linking benefits offerings and employeeloyalty. In fact, the 2012 Aflac WorkForces Report found that workers who areextremely or very satisfied with their benefits program are nine times morelikely to stay with their employer, compared to those workers who aredissatisfied with their benefits program. Similarly, when asked what theircurrent employer could do to keep them in their jobs, 49 percent said, “improvemy benefits package.” As company leaders and HR decision-makers seek effective ways to combatworker attrition, examining their benefits programs should be considered a toppriority. Given the high correlation between attitudes toward benefits andemployee loyalty, offering robust benefits programs can safeguard, support andhelp to build a positive reputation that works to substantially increaseemployee retention.Although a strong business case can be made for offering robust benefitsoptions that better protect workers, U.S. companies are actually decreasing theamount of ancillary benefits options they offer in 2012. The Aflac study foundthat on average, 10 percent of companies across the U.S. are decreasing alltheir ancillary benefits options. Many others are decreasing a portion of theirbenefits options, leaving employees with fewer choices for coverage andprotection. Chart 3 – AnnualComparison of Employer Benefits Offerings Evidence shows that employees desire more benefits options and that acomprehensive benefits package can have a crucial impact on workplace outcomes,yet employers often fall victim to the perception that simply providing majormedical benefits to workers is sufficient. Many do not know that often ancillaryor fringe benefits can make the biggest difference in demonstrating goodwilltoward employees. Simply put, more choices to bolster protection are amust-have for employees. To that end,companies ought to consider reinstating or implementing ancillary benefits,such as an adequate 401(k) program to help workers prepare for retirement.According to the Aflac study, only 28 percent of workers agree that they arewell prepared for retirement. Offering a support program, such as a 401(k)program or a stock purchase plan can help workers in this regard. Flexiblespending plans are also helpful in building better savings for employees. Othersought-after benefits by workers are the opportunity to telework and enroll inincome-protecting policies, such as life and disability insurance. When it comes toenhancing ancillary benefits packages, voluntary or supplemental insuranceplans are often the solution. Voluntary insurance plans can resolve the manymarket pressures faced by HR and benefits managers today, at no direct cost tothe company. They also offer an opportunity to better protect and help fosterpeace of mind among employees, with a variety of insurance policies, such as accident,cancer/specified-disease, dental, life, short-term disability, specified healthevent, hospital confinement indemnity, hospital intensive care, lump sumcritical illness and vision. While voluntary istraditionally viewed as coverage that exceeds an employee’s core benefitspackages, since many companies are cutting back on core health care coverage tocurb rising costs, the need for voluntary insurance is now essential. Inaddition, offering voluntary benefits options can also help diminish possibleworker turnover. The Aflac study found that 63 percent of workers who are likelyto leave their jobs say adding voluntary benefits would be important to thembecause the benefits help to meet their needs. Another 67 percent say havingvoluntary benefits options would provide them more comprehensive coverage, and 4-in-10workers say voluntary benefits options would be important because offering themis the right thing for their employer to do. Yet, more than half of workers(51%) who are extremely or very likely to leave their jobs say their employerand their spouse’s employer do not offer any type of voluntary benefits. Don’t Just Offer Benefits — Effectively CommunicateThemNot only do overall benefits impact worker retention, but effectivebenefits communication and promotion also provides an additional advantage tokeeping employees satisfied. The communication and marketing of benefits isoften an afterthought for many organizations, when in reality, they can be themost crucial factors in whether or not the organization achieves a return onits investment in its benefits program. Unfortunately, feedback from U.S. workers indicates that most companies’benefits communications and education aren’t up to par. In fact, the 2012 AflacWorkForces Report finds that only 9 percent of workers say their HR departmentcommunicates extremely effectively about benefits offered. Another 22 percentsay their HR department communicates not at all or not very effectively. This ineffective communication contributes largely to whether workersstay or go. The study found that nearly 4-in-10 workers (37%) who areextremely/very likely to leave their jobs say their HR department communicatesnot at all/not very well. Sixty-five percent of those workers say their HRdepartment only communicated about benefits at open enrollment or new hire. Workers who say their HR department communicates too little are twice aslikely (63% vs. 34%) to leave their jobs. The bottom line is the more a companycommunicates about benefits, the less likely employees are to leave.Chart 4 – Frequencyof Benefits Communication and Likelihood to Leave Corporate America spends billions of dollars on health and welfarebenefits every year, and yet employees feel ill-informed about the type ofbenefits available to them and/or about how to enroll. It is vital thatorganizations begin going beyond simply communicating and start marketing theirbenefits programs. Both employees and employers can experience the negativeeffects of insufficient communication and marketing of benefits. On the otherhand, when a company shows it cares about its employees, both parties reaprewards in the form of happier, more engaged and loyal workers. Don’t Underestimate the Role of Corporate ReputationOnce a company has established an effective world-class benefitsprogram, it can use those benefits offerings to gain a competitive advantage toattract high-quality candidates. Why? Because companies today are judged by boththeir brand promises and their ability to fulfill those promises, including thebenefits and advantages gained from working for their company. Whether or not thecompany delivers on those brand promises once a candidate becomes an employeeadds to employer reputation, ultimately affecting areas such as employeereferral and attrition. As organizations begin to make greater investments incrafting, managing and promoting their reputation, the benefits they offer toemployees can support their investment, while also directly impacting thepotential for worker attrition. Amidst shifting health care costs, pay cuts, layoffs and decreasingbenefits, a company’s reputation factors more heavily on employees’productivity, engagement and retention than ever before. Especially as Webcommunities offer greater transparency into a company’s true colors,corporations must demonstrate social and moral responsibility as a matter oftheir own survival. According to a survey by Hewitt Associates of 518 HR executives,⁶47 percent believe that employee trust has declined as a result of the waytheir company has managed its recession-induced cost reductions. The surveyalso found that 37 percent believe their organization’s handling of theeconomic downturn will make talented employees much more or somewhat morelikely to leave. Another survey of employeesconducted by Deloitte⁷shows that 41 percent view their employer with less respect.Drive Employee Engagement to Improve Job SatisfactionTowers Watson regularly studies the effects of employee engagement on botha company’s bottom line and its effects on the overall health of the workforce.They say that elements such as job satisfaction and management appreciation directlyconnect to a company’s ability to drive employee retention and engagement.Improving upon engagement remains only half the battle. As mentionedearlier, when it comes to boosting job satisfaction, the 2012 Aflac WorkForcesReport uncovered a clear correlation between satisfaction with benefits and overalljob satisfaction. Consider this: 73 percent of workers who indicate they areextremely or very satisfied with their benefits package also say they are alsoextremely or very satisfied with their job. This compared to only 33 percent ofworkers who say they are extremely or very satisfied with their job but who arealso dissatisfied with their benefits package. For companies struggling toprovide robust benefits, the combined potential gap in employee engagementcombined with a recovering job market clearly paints the picture that changes arenecessary to retain employees. ConclusionThere are a multitude of reasons for why employees may choose to leavetheir employer. Although during challenging economic times it may be easier foremployees to overlook certain aspects of their workplace that areunsatisfactory, the drivers for leaving an employer seem to remain the same ingood times and bad. A perfect storm is brewing that could leave companies wondering whatthey could have done differently to retain their workforce, but it’s clear thatworkers no longer take the word of corporate management at face value. They areinstead looking for true retention efforts that are supported by actions,policies and benefits. Some retention and engagement best practice improvements are obvious, butmaking benefits offerings a part of the retention effort is often forgotten.Yet, there are many perks — particularly now that organizations are budgetconstrained — such as EAP services, flexible work options, wellness programsand voluntary benefits, which are practical and cost-effective ways to boostemployee engagement, satisfaction and retention. Additionally, benefitsofferings and effective benefits communication contributes to corporate image,employee satisfaction and retention, not to mention creating an impression thatan employer truly cares about the well-being of its workforce. When business leaders and HR executives demonstrate genuine interest intheir employees and the factors that contribute to their decisions to leave, workersnotice. The value of understanding these factors can make the key differencefor building an engaged, loyal and more productive workforce. CITATION KEY ¹U.S. Bureau of Labor Statistics, JobOpenings and Labor Survey, May 2012.²U.S.Bureau of Labor Statistics, Job Openings and Labor Survey, April 2012.³2012 Aflac WorkForces Report, a study conducted byResearch Now for Aflac, February 2012.⁴Society for Human ResourcesManagement/CareerBuilder Survey, <http://humanresources.about.com/cs/retention/a/turnover.htm>, accessed on March 23, 2012.⁵Aversa, Jeannine, “Stress Over DebtTaking Toll on Health,” The Associated Press, June 9, 2008, <http://www.lifebenefits.com/lb/pdfs/F62382-28.pdf>, accessed on March 23, 2012 onLifeBenefits.com.⁶“Cost Reduction and EngagementSurvey,” Hewitt Associates, April 2009.⁷”2009 Top Five Total RewardsPriorities,” Deloitte, LLC Survey by Drake International, a global HR firm,March 2009. ⁸Crowly,Mark C., “The Sharp Drop-Off in Worker Happiness – And What Your Company Can DoAbout It,” FastCompany, April 30, 2012.

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