Employee Retention: Why Good Employees Leave

Employee Retention Why Good Employees LeaveAs the first flashing red light in a game changing series, “Top 7 Signs Your Company Needs to Change,” we have noticed good leaders in upper management leave and rising young stars exit for reasons beyond pay. More often, the reasons they leave are signs of deeper, underlying problems or conditions that need to change within the company. Why should you care? When good employees leave, it costs your company in multiple ways and causes disruption in relationships, retraining, results, and revenue. To improve employee retention, figure out why good employees are leaving in order to stop the talent door from revolving.

1.  Under utilization of people’s skills and expertise.  Smart companies align employee talents and passions with corporate pursuits.  When highly qualified people are not working in their area of expertise or passion but are caught up in tasks that they feel are not meaningful or unproductive, they will feel like they are wasting their time and get frustrated.  An example is engineers or IT developers who spend tons of time answering RFP (request for proposals) and RFQ (request for qualifications), rather than on projects that challenge their intellect and creativity. If this happens once in awhile, that is one thing, but if they are constantly playing catch-up for the company and they rarely get to do what they love and value, they will leave. If you have fresh new talent, you need to leverage their knowledge and insight on the product development or project delivery side of the business. People with creative talent need to be allowed to use their creativity to keep the job fun. Ownership in projects creates a higher level of commitment for the projects.

2.  Failure to recognize good performance.   Smart leaders in companies recognize people who work above and beyond the call of duty to achieve agreed-upon goals and successfully complete projects on time. People need to know their work has meaning, is important and appreciated. If employees invest huge amounts of time, energy and expertise into projects, they want to see results and implementation. If hard work is ignored, not acknowledged or not utilized, it sends a negative message that you do not care, or worse, you don’t care about them. If you don’t acknowledge high achievers, how long do you think they will invest in your goals or projects? As the saying goes, “Fool me once, shame on you. Fool me twice, shame on me.” The human side of business cannot be ignored without consequences.

3.  Broken trust.  If you don’t believe that broken trust is expensive, just ask Lance Armstrong or Tiger Woods.  Good employees admire and will follow people they trust.  Although President Abraham Lincoln was not loved by everyone, his ability to tell the truth, whether you wanted to hear it or not, earned him respect and the nickname “Honest Abe.” Has our need to be loved become so overpowering that we now stoop to just tell people what they want to hear regardless of the truth?  Lie to employees once, and they will probably write it off as “you had a momentary lack of good judgment.” Lying to employees over and over will cause employees to lose respect for you and the company that allows dishonesty. Though the truth can be tough to swallow , employees of high integrity hate being lied to or strung along with empty promises. They feel insulted, hurt, and betrayed and will not stick around for another round of abuse.

4.  Rewarding bad management.  Just because some people can manage things, doesn’t mean they can lead people. When senior leadership conveys a lack of confidence or displays close-mindedness in creative ideas expressed by others on the team, good employees look for opportunities to shine elsewhere.  Lack of consistency creates a Forest Gump “box of chocolates” feeling among staff…”you never know what you are going to get.”  If management says one thing this week and the complete opposite the next, employees feel jerked around and who likes to feel they are wearing a shock collar? Do not promote people whose only skill is to make themselves look good in front of the boss and never actually sell anything or improve the bottom line.  Rewarding cynical political maneuvering over good performance, sends a strong message that the leadership does not really care how people are managed or led.  Are your rules dumb, inflexible and out-of-date?  Meaningless rules that do not support better results or save money erode employee loyalty and engagement.  A famous Gallup poll of more than one million employees found “People leave managers, not companies.”

5.  Spinning wheels, but going nowhere.  No matter how much work the employee does, it doesn’t seem to matter or make any significant difference. No promotion in sight. No bigger profit for the company. No clear direction that the company is moving toward. No flywheel effect or breakthroughs into new market segments. Employees feel like they are walking blindly in the dark. Lack of collaboration between the leadership, sales/marketing, and technical/operations teams creates plenty of work, but no clear unifying direction. Good employees don’t mind working hard as long as they see meaningful progress, worthwhile goals, and valued results.

If your company shows signs of employee retention problems and you have some control or influence over process or policy, change it up! Otherwise, your organization’s effort to hire rising stars and great people with proven records of success will be wasted.

So here’s the bottom line…

  • To stop the revolving door and retain good employees, evaluate what is happening and why.
  • Make it a priority to build up your good employees, listen to their ideas, and give them a voice so they have investment in shared goals.
  • To increase retention of good employees, show them you value them, recognize their good performance, and be trustworthy.
  • Engage good employees in meaningful work, challenge them with projects that could give your company a flywheel effect, and reward them (emotionally, intellectually, and financially).
  • Help good employees thrive by placing them with good managers who are trustworthy. Employees who are valued, challenged, engaged and rewarded rarely leave.

Coming:  Part 2 of our game changing series “Top 7 Signs Your Company Needs to Change” alerts you to the red flashing signal “You have plenty of work, but profit is low.” If you have hundreds of projects but you are barely making your revenue goals, your profit margin may be too low. In reality, you are undercutting your own profit margins for the sake of positioning. Stay tuned…Stay alert!

Here are links to the game-changing blogs in this series:

“Increasing Profitability: You Have Plenty of Work, But Profit is Low”

“Dealing With Resistance To Change:  What To Do When You Frequently Hear “But We’ve Always Done It That Way”

“You Find Yourself Very Alone:  Growing Your Business Partner Network for Impact and Value”

“Compete on Value, Quality and Impact, Not On Price”

“Business Development Illusions If BD Falls On A Few”

“Reduce Business Stress If Management Anxiety Is High”


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  2. […] “Employee Retention: Why Good Employees Leave” […]

  3. […] You have good people leaving.  When good leaders in upper management leave your company and  young, up and coming stars exit, it […]

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