What characteristics of a job, firm, and industry act as predictors of voluntary turnover?
Managers often assume that employees leave a company in search of higher pay, but recent research from Personnel Psychology suggests that pay is just one of many factors that contribute to turnover. According to the study, other important factors include non-cash benefits, professional development opportunities, and job characteristics. To reduce turnover, managers should consider implementing strategies that address these other factors, as they may be more cost-effective and have a greater impact on employee retention than increasing pay alone.
One important predictor of turnover that is gaining attention in the research is employee engagement. Studies have found that engagement is a useful predictor of turnover, and that employees who feel a sense of meaning in their work, feel safe and supported in the workplace, and are able to manage work-life balance are more likely to stay with a company. Managers can foster engagement by creating a positive work culture, promoting open communication and idea sharing, and providing support for work-life balance.
At a high level of importance to turnover predictability is job market perceptions and withdrawal attitudes. How would a manager measure these factors, though? It is obvious that employees would be hesitant to share their actual opinions on other job prospects and experienced withdrawal feelings with their employer. One way to handle this issue is to collect data on these topics while maintaining employee anonymity. Speaking to this, the researchers suggest managers bring in “neutral consultants to administer surveys,” which will help employees feel confident in their anonymity. On top of this, managers can use absentee rates and monitor how employees utilize time on the clock if an unobtrusive measure is desired.
Alongside addressing issues with current employees’ levels of engagement and withdrawal attitudes, it is extremely cost-efficient to avoid hiring individuals who could be considered a “bad fit.” An important consideration when making hiring decisions is how well a candidate’s values and personality align with the company’s culture. Candidates who share the company’s values, such as a strong emphasis on professional development, are more likely to be successful and stay with the company for the long-term. Additionally, assessing candidates’ emotional stability and conscientiousness through personality tests may help to identify those who are more likely to stay with the company.
Adding to the consideration one should make when examining person-company fit, the meta-analysis offers useful data. The relationship between mean-level data and employee characteristics such as job satisfaction and organizational commitment are negative. For example, in a firm that is full of highly committed and happy individuals, an unhappy individual is more likely to resign. This is why it is important for a new hire to share similarities with the company’s current staff. The more an individual’s characteristics (such as how much meaningfulness they experience from their work) stray from the firm’s average, the more likely the individual is to leave as they will be cognizant of the dissimilarity.
In summary, pay is an important factor in turnover, but it is not the only one. Managers should also consider other factors like non-cash rewards, job characteristics, leadership, climate, and organizational support when developing strategies to reduce turnover. Furthermore, focusing on employee engagement, work-life balance, and alignment of employees’ values and personalities with the company culture are also crucial to employee retention.
Johnny Smith is an intern focusing on strategy and operations at Zweig Group. Contact him at johnny.smith@zweiggroup.com.