Why Employees Leave: How to Improve Employee Retention With Your Employer Brand
Consider the time you spend creating and posting a job description, evaluating applicants, interviewing candidates, and extending job offers. Your new employee hasn’t even been hired yet and you’ve already invested tens of hours starting the process. While there are tools to cut down on the administrative tasks of HR, the human side still needs to be reconciled.
Many companies are wasting their hiring capabilities, not to mention valuable resources, by bringing on candidates who aren’t the right fit for their company culture. Even a well-qualified applicant can ultimately be a poor match for a company. If you want to save time and money and maximize your hiring efforts, you should focus on building an employer brand that authentically reflects your work environment—so you can attract the best-fit talent for your team.
Before we dive into the value of employer branding and how it supports employee retention, it’s essential to understand the full scope of hiring costs and why new employees choose to leave an organization in the first place.
The True Cost Of Hiring
Hiring is a necessity for companies that want to grow. As much as recruiting costs, it’s typically understood as an essential part of building a business. If you break down the individual costs of hiring, though, it becomes clear just how expensive hiring a single employee can be.
You could be paying for:
- Recruiters inside and outside of the company
- Job board listing fees
- Travel to and from the interview location for you and/or the interviewee
- Pre-employment screenings
- Relocation expenses
- Training expenses for new employees
Beyond the recruiting process, employees are a continual expense—salaries, professional development opportunities, benefits, and more should all be considered when evaluating the total cost of hiring.
Hiring Decisions Impact Your Company—Positively and Negatively
If we pull back the curtain even further, we see that hiring impacts your company as a whole. The effects are easy to see from the side of hiring a fantastic new employee that’s the right fit, not just for your company but also for the specific role. A good hire can brighten the office, bring teams closer together, and contribute to building a vibrant and healthy company culture.
While great employees are helpful and kind, bad hires can pull any company down. According to a recent study by Career Builder, the top three reasons employers qualified someone as a bad hire were that the worker:
- Didn’t produce the proper quality of work
- Had a negative attitude
- Didn’t work well with other workers
The study went on to say, “When asked how a bad hire affected their business in the last year, employers cited less productivity (37 percent), lost time to recruit and train another worker (32 percent) and compromised quality of work (31 percent).”
Unfortunately, the bad that stems from these situations can outshine the good work being done every day. Poor hires can have a ripple effect on the people around them and, by extension, your entire organization. But keep in mind: Most bad hires aren’t actively trying to harm your company. A survey by Gallup found that just 13% of employees are actively disengaged (the kind of negative energy that can profoundly impact team culture and morale).
Your goal should be to maximize your engaged employees and reduce the number of actively disengaged employees—something that can, at least partially, be accomplished by making better, more informed hiring decisions up front.
Employee Turnover Is Expensive
How much could you be spending if you need to re-hire for the same role? While the final number will vary depending on an employee’s role and their total salary, The Work Institute conservatively estimates that the cost of losing a U.S. worker is $15,000.
But as we’ve discussed, turnover doesn’t just cost your company a ton of money. It also puts a strain on your workforce that can end up costing you much more in the long run. For example, while you’re dealing with employee turnover fallout and determining how to move forward, your company will likely be understaffed. Being understaffed puts a lot of pressure on your current employees to step up, which might lead to burnout and increased stress at work.
Another considerable cost of losing employees—both good and bad—is the disruption it causes in team dynamics. You can’t put a number on how negatively this may affect your workforce. Everyone on your team brings a unique set of skills to the table and while we may want to believe that every employee who leaves is terrible, that’s simply not the case. Many fantastic, smart, and dedicated employees decide to leave their companies due to things like management mishaps, stagnant careers, and workplace policy issues.
When turnover is high, employee productivity suffers and, ultimately, so does your company’s bottom line.
Why Do New Employees Leave?
Let’s focus our attention on new employees. During the onboarding period, employers are evaluating whether they made a good hire. How is the new hire settling in? Are they taking some initiative? Do they seem happy? But it’s important to remember that new hires are also assessing their decision to join your team. Do they feel included? Does the role meet their expectations? Does the company culture match how it was described to them during the hiring process?
The first 90 days have a significant impact on whether or not your employees decide to stay with your company. In fact, Jobvite conducted a survey and found that almost 30% of job seekers have left a job within the first 90 days of starting. This is an alarming statistic, especially with the knowledge that hiring an employee can cost thousands of dollars (and having to replace an employee brings that number even higher).
In order to recruit more effectively and reduce turnover, it’s helpful to understand some of the reasons why employees leave in the first place, so you can adjust your talent acquisition strategy accordingly.
Here are three main reasons why employees leave:
1. Day-To-Day Role Inconsistencies
When candidates are searching for a new job, they take the hiring process and documentation seriously. Even if you tack “and other duties as assigned” on to a job description, employees still come into a new role expecting to have certain responsibilities. In the Jobvite study, 43% of respondents who have left a job within the first 90 days said it was because their day-to-day role wasn’t what they expected.
Do you hire employees for one thing and expect them to be able to tackle a ton of other responsibilities? While some people thrive in this environment, it burns out other workers. Gallup’s State of the American Workplace report found that, “60% of employees say the ability to do what they do best in a role is ‘very important’ to them.” When the role they signed up for changes, it creates a challenging work environment.
Your job as a hiring manager is to ensure that the role people sign up for is, for the most part, the role they’ll actually be doing. You can build role changes in the structure of the job, but communication needs to be present in order for those changes to be effective and accepted.
2. An Incident or Bad Experience Drove Them Away
Jobvite’s study also found that 34% of employees have left a job shortly after starting due to an incident or poor experience at work. While you can’t see or control every small thing that happens in the office, you should aim to create a company culture that thrives on communication. If your employees don’t feel comfortable approaching you from the start, it will likely be difficult to win their trust later.
Make sure you’re addressing any issues that come to your attention and following up with new employees to let them know you’re there for them as a resource and an advocate. Simple actions like these can help you get ahead of any potential issues and make a big difference in building a culture that supports employee retention.
3. Company Culture Wasn’t the Right Fit
Last but not least: 32% of respondents in the Jobvite study cited company culture as a reason for leaving. This is why it’s so important to portray your company culture as accurately as possible during the recruiting process. When you’re honest about who you are as a company and create an employer brand that reflects the lived experiences of your employees, you’ll naturally attract more informed candidates that are better long-term fits.
Making Better Hires From The Start
Attracting candidates with strong credentials is at the top of the list for many companies, but it’s also important to consider that the person with the best resume might not be the best person to hire for your team. Let’s say you have a candidate with the training and experience required to do a specific job. If they don’t collaborate well with others or frequently show up late to work, that could cause problems down the line.
How do you avoid this? According to research done by LinkedIn, a strong employer brand can reduce an organization’s turnover by 28%, reduce the cost to hire by 50%, and yield 50% more qualified applicants.
Why Employer Branding Leads To Less Turnover
When you prioritize building an employer brand that shows people what they can expect from working at your company, you can use your brand as a tool to set and manage expectations early on the candidate journey (as early as the discovery phase). You’re helping candidates understand who you are and what you stand for as an organization before they even apply.
As a result, you’ll start attracting more applicants who are inspired by your mission and values and can envision themselves contributing to them—versus those who aren’t necessarily invested in your culture and career opportunities—strengthening your talent pool in the process.
If you can deliver on the employer brand promises you make during the recruiting process, you’ll enable your company to make better hires and retain more employees.
Activating Your Employer Brand Throughout the Employee Lifecycle
Your employer brand isn’t just a tool for talent acquisition. It’s reflected throughout your candidate experience and can indicate what your employee experience is like—so there needs to be harmony between your brand messages and your actions every step of the way.
Capture Your Culture and Values
What makes your company unique? Why should someone consider joining your team? Find ways to showcase that through your careers page, social media, videos, podcasts, blog posts, brochures—and anywhere else potential employees might discover and engage with your brand. Start by identifying some key characteristics that you want candidates to know about and build recruitment marketing assets around those themes.
Think about a distribution strategy that gets this content—and your company—in front of a broad audience of potential candidates and make sure your messaging is consistent throughout.
While it might be tempting to only focus on the most positive aspects of your company culture, don’t be afraid to showcase some of the less glamorous sides. You can promote work-life balance as a core value and still be honest about the fact that there will be some occasional late nights. When your team does have to work late, what do they do to make it more enjoyable?
If something is a regular part of the employee experience, candidates should know about it—and if it’s not for them, they can decide not to move forward (saving you from hiring someone who might end up leaving after a few months).
Make Sure Your Candidate Experience Reflects Your Values
After researching your company and learning about your workplace, potential candidates who identify with your brand may decide to take that next step and apply for one of your open positions. At this stage, it’s crucial for candidates to have an experience that aligns with the messaging that originally caught their attention. Candidates are able to spot brand inconsistencies and that can cause them to reconsider your company and their application.
For example, if your careers page highlights that you value accountability, you need to take accountability during the hiring process—like providing consistent communication about next steps, even if that means letting someone know you’re not moving forward with their application. Potential employees want to see the connection between the employer brand you share with the public and how you treat candidates in reality—and they’re judging what they see when they interact with you during the recruiting process.
Remember: Your Employee Experience Shapes Your Brand
The values and principles that you own and advocate through your employer brand need to be sustained in your employee experience. If you immediately abandon the promises you made during the hiring stage, your new employees will notice.
Of course, there’s an adjustment period. First day jitters, learning curves, and settling in are all a normal part of the onboarding process. But when an employee first gets to your company, their loyalty to you is low and during this time, it’s easy to leave a company that doesn’t live up to expectations.
Not every employee will look to leave under these circumstances. Some will stick around because they need to wait to find another job. But those employees likely won’t be engaged at work and that’s not good for your team.
Here’s the bottom line: You need to be upfront about your values and who you are as an organization through every stage of the candidate journey. Candidates should be able to determine early on if your company environment is one where they’ll thrive. You shouldn’t shy away from what makes your company unique because that’s how you’ll enable your company to find the best candidates for your open roles.