Why do employees leave their jobs?

Posted by Fed Finance Canada in Our employment advice
Posted at 26/03/2024
Why do employees leave their jobs?
According to Statistics Canada, in 2022, the employee turnover rate was 20.2%, which implies that 1 in 5 people change jobs. Why does this happen? Our finance recruitment experts exchange a lot with candidates, so we're well placed to get their feedback.

10 top reasons why employees leave their jobs

You've chosen the right candidate and he's slipping through your fingers? Take a look at these different aspects and think again.

1. A bad line manager

The line manager contributes a great deal to the well-being and professional development of his or her subordinates. When an employee finds himself under the direction of an incompetent, uncaring or authoritarian manager, this can have a significant impact on his commitment and job satisfaction.

For example, an ineffective manager may lack people management skills, be unable to provide clear direction on work objectives and expectations, or be unresponsive to the ideas and contributions of subordinates. This lack of leadership can confuse the team and lead to misunderstandings, compromising overall performance. Worse still, creating an unsupportive work environment can leave employees feeling devalued. Since the manager is the embodiment of the company to the employees, the company's image suffers. Employee loyalty cannot be sustained under these conditions.

Employees look for managers who inspire, support and guide them in their professional development. When faced with a poor line manager, they may quickly consider seeking opportunities elsewhere where they will feel better supported and valued.

2. A lack of recognition

Recognition and appreciation are fundamental pillars of employee motivation and retention. But when employees give their best and their efforts aren't recognized or appreciated, morale and attachment to the company may suffer.

Recognition can take many forms, including verbal praise, tangible rewards such as bonuses, professional development opportunities, or simply sincere words of thanks. Employees who feel valued and respected for their contributions are more likely to remain engaged and motivated in their work.

Conversely, a lack of recognition can create a climate of disengagement within the company. Employees may begin to question whether their work has any real impact, and whether they are truly appreciated for their efforts. What's more, lack of recognition can also lead to resentment and feelings of undervaluation among employees.

3. A toxic corporate culture

Corporate culture is the heart of organizational identity and profoundly influences interactions within the company. A so-called toxic corporate culture means devastating consequences for employee well-being and organizational health as a whole.

What do we mean by toxic? We could mention the following mistakes:

  • Favoritism, which creates a sense of injustice among employees, with some benefiting at the expense of others;
  • Harassment, whether verbal, physical or emotional, leading to a climate of fear and mistrust;
  • Unhealthy competitiveness, where employees are driven to compete with each other at the expense of collaboration and cooperation;
  • Disrespect for individuals, their ideas and contributions.

Companies that tolerate or ignore a toxic corporate culture risk losing their best talent. Talented and engaged employees are attracted to positive work environments where they feel respected, supported and valued.

4. A lack of professional development

Employees aspire to grow in their careers and acquire new skills. Professional development includes a range of opportunities, such as training programs, opportunities for advancement, challenging projects and experienced mentors. When employees lack access to these opportunities, they can feel disengaged and unmotivated to invest fully in their work.

A lack of growth opportunities can also lead to skills stagnation and professional obsolescence. In an ongoing process of change, with new technologies and skills emerging rapidly, employees need to be able to continually develop their skills and remain relevant in the job market.

It can also be seen as a sign of a company's lack of interest in its employees. A junior financial analyst working in an investment firm could find himself blocked in his career progression if he isn't offered a training program.

5. A lack of communication and not enough transparency

Open and transparent communication is the cornerstone of a healthy organizational culture. When information is not shared transparently or communication is ineffective, the outcome can be misunderstandings, rumors: overall, a general feeling of mistrust among team members.

Employees need to feel informed and involved in decisions that affect their work and working environment. The withholding of information or unilateral decision-making without consultation can generate resentment and disengagement among employees. You damage team cohesion and productivity when lack of transparency fuels rumors and speculation.

6. Poor benefits

In addition to base salary, benefits such as health insurance, paid time off, retirement programs and other perks play a decisive role in an employee's decision to stay or leave a company.

Inadequate or unattractive benefits can deter employees from staying with a company, especially when they compare the benefits offered by other employers in the marketplace. Quality benefits help boost employees' financial and emotional well-being, helping them to feel valued and cared for by their employer. Especially if the pay doesn't measure up either!

By offering competitive and attractive benefits, companies can not only attract top talent, but also retain their existing staff.

7. Low pay

This one sounds really obvious, although this reason is not the most decried. Compensation that doesn't live up to an employee's expectations in relation to their work is a great deal of frustration. Salary reflects the value an employer places on their worker.

A company's compensation policy must remain competitive in the marketplace and include opportunities for advancement and merit-based salary increases. Salary expectations are becoming increasingly high: employees are asking around, so do it as well.

8. Interpersonal conflicts

People-to-people conflicts in the workplace are also responsible for people leaving their jobs, because it creates a stressful and unproductive environment. When employees get caught up in conflicts with colleagues or supervisors, they may be tempted to leave the company to escape the tension.

Disagreements arise generally from differences in personality, work style or values. They have a negative impact on team dynamics and employee morale. Then, it leads to reduced motivation, increased stress and a deterioration in working relationships. This is often why companies carry out psychometric tests, to check compatibility between team members.

9. A lack of work/life balance

A healthy work-life balance is essential for employee well-being. Companies that fail to recognize this necessity and encourage a work environment where employees are constantly overworked or unable to reconcile their professional and personal obligations risk losing their best talent.

Why? Because they'll burn out and succumb to excessive stress. If you're contributing to a decline in your employees' quality of life, it's only natural that they'll look to change jobs and companies.

10. Your values are no longer aligned

When a company's values diverge from those of its employees, it can lead to feelings of disconnection and disengagement. Employees often seek to work for companies whose values and organizational culture match their own.

That's why it's so important to be honest about your employer image. Sooner or later, if you hide less noble motives, your employees will understand the trick and leave.

If people leave their job, you should think deeper about it

When an employee decides to leave his or her job, it doesn't usually happen suddenly or without reason. It's often the result of a series of reflections and frustrations built up over time. For employees, this can be a difficult decision to make, especially if they have invested time and energy in the company.

An employer must recognize that the departure of an employee, especially a valued one, requires serious reflection and self-examination on the part of the company. This doesn't mean simply looking to fill the vacancy, but rather examining the root causes that led to the employee's resignation and identifying areas where improvement is needed.

When an employee decides to leave, that decision is often a symptom of a wider problem within the company. This may be due to shortcomings in the corporate culture, communication problems, a lack of recognition or insufficient growth opportunities, as seen earlier. Companies must be prepared to question their practices and make significant changes to avoid losing further talent in the future, and thus ensure optimal employee retention.

Looking for a new job? Fed Group is here to help you

If you're looking for a job in finance, Fed Finance can help you with your project. Alternatively, if you're a recruiter looking to hire a new employee, don't hesitate to entrust your recruitment to us!