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Retention Survey Shows Reasons Employees Quit Employee turnover and retention has become one of the biggest headaches for HR professionals and is one that most employers are interested in curing. In a recent survey, the Society for Human Resource Management (SHRM), the world’s largest human resource management association, reports on the experiences of 473 HR professionals at U.S. companies concerning their employee turnover statistics and retention efforts. The results provide insight into the reasons employees quit and give examples of policies that have been implemented to increase retention rates and decrease employee turnover costs. Not surprisingly, better career opportunities and more competitive salary and benefit packages are the top reasons for employee resignations. Resignations Are on the Rise According to the SHRM 2000 Retention Practices Survey, voluntary resignations are on the rise at most organizations. Forty-one percent of the responding HR professionals reported that their number of voluntary resignations had increased during the past three years. This number is up from 1997, the last year SHRM surveyed retention practices, when only 35% of the participants reported an increase in resignations. Larger companies (those organizations employing 1,000 or more workers) were hit hardest, with 50% of this group registering more resignations. Smaller organizations (those with fewer than 1,000 employees) fared slightly better, with 39% reporting an increase in resignations. On average, responding organizations reported a total turnover rate of 17%, although the largest companies experienced higher rates. Companies with more than 1,000 employees had a 21% turnover rate, while organizations with 5,000 or more employees reported a 26% rate. Reasons for Quitting Not Surprising Why are workers leaving their jobs? As the table on the right shows, a better career opportunity is the primary reason cited by 78% of the respondents. Money is the second most cited reason, although this finding conflicts with HR journal articles in recent years indicating that employees have become less motivated by cash. Sixty-five percent of the respondents reported that employees left because they were dissatisfied with salary and benefits. Poor management was a distant third (at 21%), followed by moving to follow a relocating spouse (18%). Policies and Benefits Can Reduce Turnover To understand the causes of employee turnover, most of the survey respondents (87%) conduct exit interviews. Of these respondents, over half made changes based on exit interview information, and these included reviewing salary structures, forming employee retention committees, establishing alternative work schedules, and introducing bonus plans. The survey also asked the HR professionals to rank the effectiveness of several retention tools. Traditional benefits apparently work the best. The respondents ranked health care benefits as the most effective retention tool, followed by competitive salaries, competitive salary increases, and competitive vacation and holiday benefits. Interestingly, some of the newer and trendier benefits did not fare as well. Concierge services (where a hotel-type concierge arranges personal services like dinner reservations and personal shopping) ranked as the least effective retention tool, and telecommuting and special severance protection packages also ranked in the bottom five. Based on the survey findings, the best action for employers trying to boost their retention rates is to analyze salary and benefits packages to determine if they measure up to the competition. Print copies of the SHRM 2000 Retention Practices Survey are available for $39.95 for nonmembers and $29.95 for members and can be ordered by calling 1-800-444-5006. Members also can download a free copy of the survey from http://www.shrm.org/surveys/results/. This article is not intended as legal advice. Readers are encouraged to seek appropriate legal or other professional advice. For more articles please click here.
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