Companies across the globe are facing mounting challenges as the nature of work continues to evolve at a rapid pace. From early signs of economic downturns to inflation, political unrest, global health crises, and ongoing supply chain disruptions, organizations are under immense pressure to adapt. In response, many businesses are scaling back spending and reassessing priorities.
Organisation heart is their people. But whether employees are choosing to leave or organizations are forced to make tough decisions around layoffs, losing talent is never easy. According to the U.S. Bureau of Labor Statistics’ July 2022 report, employee exits are becoming increasingly common — 4.3 million workers voluntarily left their jobs, while 1.4 million were laid off or discharged.
Employee turnover can be deeply disruptive, especially when resilience and adaptability are critical. Organisation should take proactive steps to mitigate its effects and prevent it altogether.
What is the impact of losing an employee?
Before tackling how to improve employee retention, it’s important to understand the broad impact of losing an employee and how it can disrupt multiple areas of your business.
It’s costly
Turnover doesn’t come cheap. From recruiting and onboarding to training and lost productivity, replacing an employee demands significant financial investment. Advertising job postings, interviewing candidates, and offering competitive compensation all require a budget. Every time someone leaves, your organization takes a financial hit.
It weakens employee engagement
Workplace relationships are critical. Our data shows employees who lack meaningful connections are over three times more likely to intend to quit and nearly twice as likely to actively seek new roles. With 43% of employees reporting they don’t feel connected at work, the loss of a colleague can further erode engagement, especially when only 21% of the workforce is engaged.
It damages morale and culture
A healthy workplace culture thrives on stability and collaboration. But when someone leaves — especially a well-respected team member — morale can take a nosedive. Research even suggests quitting can be contagious, spreading uncertainty and discontent through teams.
It reduces productivity
As morale and engagement decline, so does output. Teams may struggle to maintain performance, experience higher levels of stress, or encounter increased burnout — all of which hurt productivity and disrupt business operations.
It impacts your bottom line
All these factors snowball into one outcome: diminished business performance. From rising costs to falling engagement, the cumulative effect of turnover can take a significant toll on your company’s financial health.
Losing employees is a costly event for any organization
The true cost of employee turnover extends far beyond just recruitment expenses—it includes the loss of institutional knowledge, decreased productivity, increased workload for remaining staff, and time invested in onboarding and training new hires. The cost of replacing an employee can range from 50% to 200% of their annual salary, depending on the level and role of seniority. For example, replacing a highly skilled or executive-level employee involves higher recruitment fees, longer vacancy periods, and more complex training needs. Additionally, turnover can negatively affect team morale and employee engagement, leading to further productivity declines and potentially even more turnover—a costly cycle. These cumulative financial and operational impacts can significantly erode a company’s bottom line, making employee retention a critical business priority.
Four Key Reasons Why Employees Are Leaving — and What You Can Do
Despite economic slowdowns and rising layoffs, employees are still voluntarily leaving their jobs. This wave of turnover is shaped by a combination of personal priorities and external business pressures. Here are four major reasons employees are walking away — and actionable steps you can take to address each one
1. A Desire for Purpose in Their Work
The pandemic prompted many employees to reflect deeply on their values and priorities. Now more than ever, people want their work to feel meaningful and aligned with their purpose. When employees don’t see the significance of their contributions, engagement drops — and so does retention.
What to do: Communicate the “why” behind the “what.” Help employees understand how their roles connect to your company’s mission. Coaching programs can support employees in uncovering purpose, clarifying goals, and reigniting passion for their work.
2. Financial Pressures and Budget Cuts
Organizations facing economic headwinds are tightening budgets and reducing headcount. However, leaner teams often lead to overextended employees, increased stress, and blurred responsibilities, all of which can cause dissatisfaction and burnout.
What to do: Focus on upskilling your existing talent. As employees take on more diverse roles, support them with development opportunities to adapt and thrive. Providing tools like virtual coaching can help employees strengthen resilience and prioritize their professional growth during times of change.
3. Seeking Better Career Opportunities
According to Research, many employees who left their jobs cited low pay, limited advancement opportunities, and feeling undervalued as key motivators. Without clear growth pathways, employees may look elsewhere for career progression.
What to do: Invest in professional development. Offer tailored learning, mentorship, and career coaching that empowers employees to grow within your organization. Promote internal mobility and regularly communicate career pathways so employees see a future with you.
4. Career Shifts and Life Resets
Some employees are pursuing entirely new directions, whether launching a small business, switching industries, or taking time off to recover from burnout. The shift toward more flexible lifestyles and self-employment continues to gain traction.
What to do: Support them — even as they exit. While it may seem counterintuitive, offering genuine support strengthens your employer brand and increases the chance of “boomerang employees” returning later. Encourage open dialogue and maintain relationships; the professional world is more connected than ever.
Ultimately, understanding why employees leave is the first step toward creating a workplace where they want to stay. Would you like help creating an employee retention strategy or toolkit based on these reasons?
How to Prevent Rapid Turnover from Day One
While reactive measures can help mitigate attrition, preventing turnover starts the moment a new employee joins your organization. Here are five proactive strategies to help you build retention from day one:
1. Prioritize a Strong Employee Experience
The overall employee journey — from onboarding to long-term engagement — plays a critical role in retention. Consider how new hires are introduced to your company: Are they welcomed with intention? Are they given tools to integrate into the culture? Especially in remote or hybrid settings, fostering early and ongoing connection is essential for long-term satisfaction.
2. Provide Career Growth Opportunities
Employees need to see a future within your organization to stay engaged. When development stalls, retention suffers. Offer upskilling, personalized coaching, and training across all levels. Make it clear that professional growth is not just possible but expected, and ensure employees know how to access and pursue these opportunities.
3. Bring Core Values to Life
Your company’s values should shape daily decisions and actions. Employees are more likely to stay when they see consistent alignment between what’s said and what’s done. Evaluate how your leadership models these values and look for opportunities to make them more visible and actionable in the workplace.
4. Nurture a Culture of Belonging
Inclusive workplaces don’t happen by accident — they require intentional leadership. As employees increasingly seek workplaces that welcome their whole selves, a sense of belonging can determine whether they stay or leave. Cultivate an environment where inclusion is practiced, not just preached, and where diverse perspectives are genuinely valued.
5. Build a Foundation of Trust and Safety
Trust is the cornerstone of high-performing teams. Without psychological safety, employees may avoid taking risks, offering feedback, or speaking up, leading to disconnection and disengagement. Encourage open communication, provide feedback respectfully, and train managers to lead with empathy and accountability.
Starting with these fundamentals helps create an environment where employees feel supported, seen, and excited to grow, reducing the likelihood of early departures. Would you like help turning this into a retention roadmap or presentation?
Conclusion: Employee turnover is more than a human resources challenge — it’s a business imperative that affects culture, productivity, and the bottom line. In today’s volatile landscape, marked by economic uncertainty, evolving employee expectations, and shifting career priorities, organizations must move beyond reactive strategies and prioritize proactive retention efforts.
The most effective way to prevent costly turnover is by investing in your people from day one. This means creating meaningful employee experiences, offering robust career development opportunities, living your core values, fostering belonging, and building a foundation of trust and psychological safety.
By understanding the deeper motivations behind why employees leave — and responding with empathy, intention, and strategy — companies can not only retain top talent but also build a more resilient, engaged, and future-ready workforce. Ultimately, organizations that treat retention as a strategic priority, rather than an afterthought, will be best positioned to thrive through change.
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