Terminations cost organisations a lot of money. Therefore, it is important for HR managers to understand the reasons why employees voluntarily quit. A meta-analysis provides insights into several factors contributing to resignations. From this, evidence-based strategies for mitigating involuntary terminations within organizations can be formulated. 

By Laura Creon

The cost of terminations is estimated to range between 90 and 200 percent of the terminated individual’s annual salary (Allen, 2008). In addition to the costs of filling the vacant position, there are also expenses associated with training, potential declines in quality, and even ripple effects (Allen et al., 2010). But for what reasons do employees voluntarily quit? Is it the salary, as is often claimed, or does the saying ‘People quit bosses, not jobs’ hold truer?

The most common reasons for termination

The meta-analysis by Rubenstein et al, (2018) examined 57 factors potentially linked to voluntary employee resignations. The following reasons achieved the highest correlations:

• Lack of development opportunities: Those who have the impression that the organisation offers little to no development opportunities or benefits, apart from pay, are more likely to quit.
• Absence of Positive Leadership Style: Employees who don’t feel positively guided by their managers are more inclined to quit (the meta-analysis encompassed various positive leadership styles such as transformational leadership). Hence, the adage ‘People quit bosses, not jobs’ holds merit.
• Unfavourable organisational climate: Those who work in a less appreciative working atmosphere are more likely to quit.
• Uninspiring job design: Employees who do not experience their job as motivating are more likely to quit. It’s long been established that jobs are most motivating when they are varied, meaningful, and holistically designed (Fried & Ferris, 1987).
• Low organizational embeddedness: The embeddedness of an employee in an organisation is expressed by the fit to the organisation, the networking within it and the cost of leaving. Those scoring low in all three aspects are more likely to quit.
• Low satisfaction and work-life conflict: Individuals who are dissatisfied with their work or other areas of their lives, and those experiencing conflicts between work and personal life, are more likely to quit.

And what about salary? Dissatisfaction with salary also contributes to higher quit rates. However, this correlation is less pronounced than the aforementioned reasons and is comparable to perceptions of organizational fairness. While salary plays a role, other factors can wield greater influence.

Effective strategies for staff retention

For evidence-based turnover management in organisations, experts recommend a three-step approach (based on Allen et al., 2010):

• Analysing current reasons: How many employees resign, who resigns, and how do costs and benefits behave in the resignations within our organization? How does the situation compare with organisation-specific and external benchmarks?
• Establishing shared understanding: What are the various general and organization-specific reasons for employee resignations? What roles do different stakeholders within the organization play, and what actions can they take?
• Implementing tailored measures: Measures should be based on the outcome of the diagnosis (Allen, 2008). Broadly effective measures include promoting internal mobility, improving the organisational climate, and developing leadership capabilities. (Allen et al., 2010). The topic of flexibility in work design is also playing an increasingly important role (Sull et al., 2022). Through analyses for individual target groups, e.g. in the context of focus groups, starting points for further specific measures can also be uncovered.