May 9, 2006

10 reasons why organizations are not able to retain employees

Reading Zoe's post I was inspired to come up with reasons why people leave organizations.

  1. People don't get integrated. Most organizations have an orientation program which is more of data-dump or focussed on compliance trainings being completed. The focus should be more on enabling employees to form networks within themselves.
  2. Performance goals are unclear. In a fast growing team or business the focus is on getting the thing done today, but rarely are performance goals thought through and employees told as to which resources to approach for help.
  3. Development is always tomorrow's job. Culturally Indians are focussed on learning. If learning adds value only to the job and not to the overall career goals of the individual then the organizations seems too transactional for the employee
  4. The personal touch is missing. How comfortable are managers building personal bonds with their subordinates? A lot of managers shy away fearing a bond will make delivering hard messages difficult. I would argue that it's the other way round! Knowing employees on personal level makes a manager know their strengths and weaknesses. Work allocation and employee development become easier.
  5. Reward systems are not transparent. Most employees who get salary increases because they have a rare skill at a particular point of time think they got their raise for excellent performance. Can you share details about how they have been compensated?
  6. Percieved equity of reward systems is low. Like it or not, employees discuss salary details and if there is any percieved lack of equity then you have an issue !
  7. Goal setting process is not scientific. Most organizations impose a normal curve fitment, but do not train managers to set realistic goals or goals that tie up with organizational or functional goals. This also leads to point number 6
  8. External equity is missing too. Don't do an annual compensation survey when the market moves every 3-4 months. If your practitioners feel that externally comparable professionals are being valued more, then they will leave.
  9. No communication around total value. If you offer benefits apart from only monetary terms do you communicate that to employees too. Things like being a global or niche industry leader, value of the brand of the organization, should also be made explicit.
  10. No career planning. Are people aware of the ways in which they can grow in the organization? Who are the role models within the organization? Do they know what they have to do to gain the competencies to move to various levels? (update: Can you be radical enough and create an internal talent market ?)


  1. Asolutely correct.i can see the same thing arond in my org.

  2. i was wondering how HR guys quit! ha ha!
    you know... the employees arent motivated enough so i am quitting? :)

  3. There's also the financial consideration. What if the employee got a better offer somewhere else and the compensation is greater? It would be tempting especially if the person has a lot of bills to pay and other concerns.

  4. Gautam these are true.

    For organization like mine formally Indian company but now an MNC due to series of acquisitions.

    The climate filled with politics(grape vine)
    What the new management says is not well communicated with all and leads to too many rumors, few quit on this rumors

    Attitude of Management
    technically new management came, the old Indian managers didn’t changed at all. and even they are unmanageable
    Eg; The New management proposes hike of 30% these people reduce and makes it to 10% to show that they are very worthy as they reduced cost. This gives the impression to us “God has granted but the priest stopped" kind

    Recognition& Reward system
    Since its kind of BPO,the people with great rapport with the manager get recognized. And the person who proposes new thing or Idea becomes enemy of manager& his associates

    In spite of this few never quit here
    Due to their self satisfaction( I am getting XX amount, with no responcbility, high comfort zone, even if i offered xx+50%,i wont) Due to these people ,people under him never see growth ,so they quit (since one manager is not quitting, 10 associates are quitting)

  5. Hi Gautam,

    Valid points. IMO, If I were to classify employees as silver, gold, and platinum employees (in terms of competence that matters to the organization), these considerations, especially monetary ones, do influence the segment of employees that have been with the organisation for 3-4 years and are silver, gold. Invariably in organizations there are also some Platinum employees who have stuck with the organization for more than 8 years for whom there could be other considerations too.

    By virtue of a longer association, there is an emotional bond with the organization. If this is not reciprocated (e.g., by recognizing tenure along with competence when rewarding stock options, instead of just competence), these "difficult to replace" people leave overnight. All those years of knowledge and experience vanish. There are other cases where people also stick around due to personal constraints (if you get to know them well). This set of people look for flexibility (and are willing to trade on benefits and points you mentioned above). To recognize this we need organizations (=mgmt & HR) to feel personally for employees (instead of what an impersonal free market recruitment has driven us into). In a knowledge industry, such people are difficult to replace.

    Finally, employees will stick if they respect the organisation.

    An organisation's values are clearly reflected in two things:
    1. Actual HR practices (in transactions) as opposed to schemes.

    I have seen some schemes that actually profit the company at the employees expense!! (e.g., Company car schemes that shows company ownership for depreciation purpose, but emp payes the financer thro' EMIs to get some spurious tax benefits, that are inconsequential, with employee bearing full and complete liability on behalf of the company. All very shady.)

    2. Treatment of employees during exit
    3. Senior Mgmt Practice of articulated values.

    It might surprise a lot of senior mgmt that their employees can actually discern that the emperor does not have clothes on, even if they do not say it outright. If an overwhelming percentage of the employees do not care and respect the organisation that they work in, it is only a matter of "when", as far their leaving is concerned.

  6. Some good insights here. In addition, organizations have a difficult time retaining people because:

    1. Their pay is too low - and by choice. Some retail establishments consciously accept high turnover in exchange for keeping labor costs down;
    2. Leadership is inept, and see people as an expendable commodity as opposed to a developable resource. In short, the organization can not walk and chew gum at the same time when it comes to leading people for the highest levels of commitment and contribution; and
    3. The departing employee was not a good fit for the position they occupied - or for the organization. The recruiting parties were asleep at the switch.

    Robert Edward Cenek, RODP
    Registered Organization Development Professional
    Trends and Research in the World of Work

  7. hi
    if these are the 10 reasons for attrition ,then why is it that nothing is done to prevent it.apart from all these reasons dnt u think the burden of work also adds to MNC's people have to work day and night and most end up with medical problems.why this problem cant be solved first?.

  8. hi,
    given the reasons for job attrition .how will you explain for the high disparity between lack of employment and rise in people leaving their jobs.

  9. Employees come to work with an implicit trust that their managers are always working for the best interest of the company and its employees. That trust should not and cannot ever be taken for granted. Look what is happening today. It is no longer "What's good for the company is good for the manager." It has become "What's good for the manager is good for the company." Top executives have totally lost sight of this phenomenon and are allowing managers to run amok for their own personal agendas.
    Several years ago I wrote a book on the subject of workplace culture and employee morale. It is as relevant today as it was then. Employee morale is directly linked to the interaction of employees with line managers who are charged with executing the policies and strategies of companies. Unfortunately, many of these managers subvert the good intentions of the organization to meet their own personal goals and agendas at the expense of their peers and subordinates. This management subculture is the result of a corporate culture of ignorance, indifference and excuse. Better corporate level leadership is the key. Read more in "160 Degrees of Deviation: The Case for the Corporate Cynic."

    Jerome Alexander

  10. Hi Goutam,

    The points you mentioned are legitimate. On the other hand, there is one thing that we miss in the BPO / Call Center industry - the recruitment process. with the huge demand to get more agents, majority of the screening tools and processes of companies that I audited lack aptitude asessment for customer service. Knowledge can be trained but the desire and aptitude to genuinely help a customer is a personality trait that can not be corrected by one week of language/accent reduction classes.

    this eventually translate to agents that have poor skills in handling irate customers even though they may have good problem solving skills and technical knowledge. this lack of customer service aptitude cause poor performance as well as unecessary stress on the job.

    companies that implemented changes in their recruitment testing tools have shown a marked improvement in customer satisfaction as well as employee retention. i've also implemented systems where accountability is set even at the recruiter level and have shown that some reruiters have a significantly higher statistical probability of hiring agents that eventually attrit or remain. this is also due to lack of calibration processes in the recruitment/interviewing process. it actually goes on and on, but i'd like to leave one last note: employees leave supervisors, not companies. :)

    I love your thoughts!

    BPO Consultant

  11. Hi Gautam nice article.

    I would also like to share the below research with all:

    Who is responsible for attrition

  12. hi gautam
    these are perfect 10 reasons you have given and it helps me very much in my assingnment.............thank u 4 this thank u very much................i like ur views!!!!!!!!!!

  13. cheers. This can be used as a ready reckoner anytime.

    I also follow a blog on Importance of Human Resources:


  14. rashmi

    this is true..though leadership style is makes a lot of difference.. it is one of the most important factors to retain people

  15. I got here from your tweet and surprised to see that you posted this in 2006 :-o. I believe that employees leave managers and not companies. And managers fail to do the basic thing, which is called appreciation. Just shower genuine appreciations for all the hard-work that employee does and see him loyal to the team.


  16. Atlast someone has taken pains to understand and talk about the ground realities and not blabber about Top management's derogatory fashionable frame of reference.

    Thanks Gautam!