Top 10 Reasons for High Turnover Rates

by Dan Marzullo on Jul 30, 2018 8:44:02 PM

Some industries—and businesses—seem to naturally have a higher turnover rate than others. In fact, there’s a close watch on jobs with the highest turnover rates. That doesn’t always have to be the case. You can help ensure that your business is the exception by following a few key strategies that can drastically improve your odds of keeping quality employees. From employee retention strategies to better recruitment approaches, in all facets of employee recruitment and retention there are avenues to reduce turnover.


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Before you begin building a turnover reduction strategy, it’s important to determine why the turnover rate is so high. Is it the norm in your industry? Do you know what the average turnover rate is for your competitors? Start by doing a little research to see where you stand. Ideally, you’ll be able to compare your current turnover rate with regional (if applicable) competitors.

Once you have current numbers in hand, it’s time to delve into the top 10 reasons for a high turnover rate. How many of them are you guilty of, and what can you do to resolve the problems?


The Retention Numbers Game:

1. You hire a lot of entry-level employees who don’t plan to stay in the position for very long.

If you own or manage a call center, fast food restaurant, or other business that’s popular for having many entry-level employees, not even the best employee retention techniques may work. A few of your employees may stay with your company long-term, and perhaps some of them will move into management positions. Others may enjoy the work as a long-term source of extra income or as a low-stress job in retirement.

However, by the nature of your business and by hiring a lot of entry-level employees, you’re providing a fantastic opportunity to these employees—and it comes with a cost. Instead of focusing solely on employee retention ideas, a better move might be investing more on your employee training programs so you can get newcomers adapted faster to the work environment and with fewer bumps.

2. You hire a lot of minimum wage employees.

This may go hand in hand with entry-level employees, but not necessarily. It’s well-known that some college graduates are frustrated at jobs paying minimum wage (or close to it) and require degrees and exceptional work experience. Even when it’s an “employer’s market,” taking advantage of experienced, highly educated employees who are desperate for work (even at a low rate) comes at a cost to you. These employees are likely to feel underappreciated and look for better jobs immediately.

3. Your competitors are offering more.

“More” isn't always overtly financial (i.e., salaries, bonuses, etc. ), although it can be. More can also mean more flexible schedules, more perks, or more in-office benefits, like snacks and access to ping pong.


Unposed group of creative business people in an open concept office brainstorming their next project.-8


When researching your competitors, keep an eye out for what they’re offering beyond hourly rates and salaries. These extra perks and benefits, such as gym memberships or telecommuting, could lure your employees away and decrease your employee retention.

4. Poor management.

Full-time employees spend the majority of their waking hours at work. They want and deserve to feel safe, secure, and respected in their position. This is impossible when you have poor management in place. “Poor management” can mean a lot of things, from illegal activities (such as sexual harassment) to maddening issues like micromanagement.

If an employee feels like they aren’t appreciated or if they dread coming to work, they’re going to start looking for another position. Managing your managers becomes increasingly challenging the larger your company is, which is why it’s important to bring in third-party consultants to ensure your managerial techniques are up to par.

5. Social media and internet have made the job search easier.

Twenty years ago, a person had to put in some serious effort to find a new job. They had to pore over the newspaper and even “pound the pavement.” Since they also worked 40 hours and often had other responsibilities, like a family, there wasn’t much time to look for a new job. The internet changed all of that and so did social media. It’s entirely possible for an employee to spend all day at work looking for another job and their boss will be none the wiser. Access to information, including available jobs, has naturally helped increase the turnover rate.

Secret Sauce of Employee Retention

6. Younger generations have different priorities.

A couple of generations ago, the dream was to get a suitable job and stay with it until retirement (complete with a gold watch). The idea of “work” and “career” has changed over the years, as have priorities. It’s increasingly common for a person to only stay in a position for a few years before moving on. Maybe it’s part of the trend towards instant gratification. After all, our brain prioritizes instant gratification. Maybe our idea of what a career means has changed for good. Regardless, younger employees tend to job hop more often than ever. Gallup dubs Millennials as the “job-hopping generation” with 60 percent open to a new job. That’s naturally detrimental to employee retention techniques.

7. Virtual work opportunities have increased.

Unless you operate a brick and mortar establishment, it’s unlikely that every single employee needs to work in an office. However, many business owners and companies cling to the idea that in order to work, an employee needs to be physically present. Do they? Virtual work isn’t for everyone or every position, but it’s a hugely appealing perk to many. In fact, along with childcare, it’s one of the most desirable of non-monetary benefits. Take a look at your positions and see how many of them may be done virtually. As a bonus, it’s a fantastic way to lower overhead and expenses.

8. Entrepreneurship, side gigs, and small business ownership has increased.

When the Great Recession of 2008 hit, it forced a number of would-be business owners and entrepreneurs out into the unknown. They had no other choice, thanks to layoffs and zero job opportunities. Now, it’s a lot more common for a person to own their own business or put together an income with a series of side hustles.


Young female businesswoman running her own business


With entrepreneurship on the rise, that’s becoming more desirable than long-term employment for some workers. You likely have a number of employees who are also working on their own small business or work side gigs for extra cash. You never know when the draw of working for oneself may have your employees turning in their notice.

9. Employees want their work to make a difference.

Increasingly, younger workers want more than “just a job.” They want a job and a career that they’re proud of and that makes a difference, and where they view their work-mates as second family according to The Atlantic. They’re frustrated with a corporate culture filled with non-stop meetings that leave them feeling like they’re not making a difference in the world. Some may call it idealism, but if an employer doesn’t offer a more holistic job opportunity that clearly shows workers how their daily activities are making a dent, they may look elsewhere. Fortunately, this is a relatively easy fix that is completely in the employer’s control. Ensuring employees feel heard, that they’re part of decision-making processes, and that you create work culture that encourages positive relationships is key. Offer ways for employees to connect, both within the business and the community, is to satisfy their need to give back and feel part of the world.

10. Recent years have taught us how to hustle.

Starting in 2009, people began to understand that if they lost their job, it probably wasn’t the end of the world. Those who were laid off or who couldn’t find a job after high school or college learned to make it work however they could. Maybe they moved back in with family or they figured out that driving for a ride share company actually earned them more than many full-time jobs.

Now, we have a country of skilled hustlers who understand that having multiple sources of income (via side gigs, cryptocurrency trading, bartering, etc.) is a lot safer than depending on a single job. It’s a hard lesson learned by recessions, and now we’re facing the results of it. Those who struggled through the Great Recession understand that there are plenty of options for income if they’re not happy with a single job. Part of “keeping” an employee used to be largely depending on the fact that the employee needed that job. However, with side gigs and multiple streams of income, total dependency isn’t always a given.


Importance of Employee Retention

Unless the positions you’re concerned about have built-in high turnover rates, such as entry-level positions, it’s critical to consider the importance of employee retention. Hiring the best employee for the position is just half of the process. You also need to retain them. It’s incredibly expensive to hire and train any employee. When there are unnecessarily high turnover rates, you’re increasing costs with nothing to show for it.

Retaining employees requires understanding what employees want. The best way to find out is to ask them. Anonymous, regular polls provide fantastic analytics that you can quickly put to use. You may be surprised by what it takes to retain employees in your unique company. They may not want what you think they do. Communication is key to any relationship, including between employer and employee.


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Benefits of Employee Retention

Recruitment and retention are two sides to the same coin. It’s time to start implementing strategies in every part of the employee funnel facet. From your recruitment strategies to ongoing training and retention techniques, keeping your employees (and keeping them happy) is one of the best things you can do for your business.

Remember that one of the best ways to recruit new employees is via word of mouth from productive, happy employees you already have. They’re your not-so-secret weapon for a healthy business and the key to hiring high-quality future employees.


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This post was written by Dan Marzullo

As a professional copywriter, Dan produces strategic marketing content for startups, digital agencies, and established brands. His work can be found in Forbes, Entrepreneur Magazine, YFS Magazine,, and many other media outlets.

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