A new study, Why Do Workers Quit?, conducted by Glassdoor Economic Research, finds employees that stagnate in a job too long are more likely to leave their employers rather than move to a new role within the company.
The economic research arm of Glassdoor looked at more than 5,000 job transitions¹ from resumes submitted to the site and combined that data with company reviews and salaries shared by employees to understand the statistical impact of various factors on employee turnover.²
What factors affect employee turnover
Interestingly, the report found that workplace factors like work-life balance, senior leadership and the quality of compensation and benefits packages have no statistical impact on employee turnover.
On the other hand, high employee satisfaction, better opportunities for career advancement, the quality of an employer’s culture and values, and higher pay lead to better employee retention.
How to use this information
This comes as a valuable warning sign to employers because on average, employee turnover costs 21 percent of an employee’s annual salary.³
“Employee turnover is costly for employers,” said Dr. Andrew Chamberlain, chief economist of Glassdoor. And although you can’t control everything when it comes to turnover, Chamberlain suggests that there are many ways you can control whether employees stay or go. “Employers that work to improve company culture, offer competitive base pay, and regularly promote and advance employees into new roles will retain them longer.”
This information can also help your recruiting efforts. “These findings tell recruiters and employers looking to hire what to focus on to bring candidates in the door,” says Chamberlain. “For example, focusing on passive or active candidates that have been in their roles for quite a while or are at companies without a strong company culture could help bolster recruiting efforts.”
Respect for corporate culture increases employee retention
A recent academic study showed a strong employer brand leads to more applicants, and this study reveals the same is true if employers want to retain existing workers. A 1-star increase (on a scale from 1 to 5) in the overall company rating on Glassdoor boosts the likelihood an employee will stay at their employer by a statistically significant 4 percent when they transition to their next job.
In addition, past research has shown that both the quality of career opportunities and culture and values of a company drive overall employee satisfaction. This study confirms that these factors also drive retention. A 1-star increase in career opportunities and culture and values ratings on Glassdoor raises the odds that employees will stay at their companies when moving into their next role by 5 percent, respectively.
Increased pay, increased likelihood of retaining employees
Salary continues to be an important part of an employee’s decision to move into a new role. According to the study, when changing jobs, employees earn a 5.2 percent pay increase on average when they make a job transition. The statistical analysis in this study found that a 10 percent increase in base pay increases the odds an employee will stay at the company by 1.5 percent.
“While it is important to provide upward career paths for workers, a simple job title promotion may not be enough,” says Chamberlain. “Maintaining competitive base pay is an important part of reducing turnover. And for recruiters, understanding competitive market value for potential candidates could be the difference between making the hire and losing the talent to an internal move within their current company.”
Job stagnation leads to turnover
While the average worker spends 15 months in one role, employees differ when it comes to the industries in which they work. Workers in government (18.6 months), aerospace and defense (17.3 months) and media (16.9 months) spend the most time in their roles, while employees in real estate (13.3 months), biotech and pharmaceuticals (12.7 months) and construction, repair and maintenance (10.6 months) turn over more quickly. Stagnating in a role too long can impact retention. Adding an additional 10 months in a role increases the chances of an employee leaving the company for their next job by 1 percent—a statistically significant finding.
¹ In this study, a job transition is defined as any time an employee lists a new role on their resume, including internal moves within the same company and external moves to a new company.
² Based on 5,006 job transitions extracted from resumes shared on Glassdoor between 2007 and 2016. Data analysis completed as of November 1, 2016. Full study methodology: https://www.glassdoor.com/research/studies/why-do-workers-quit/
³ Center for American Progress Issue Brief, November 2012
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