5 Prominent Causes of Employee Turnover and Strategies to Reduce It

A company is essentially a blend of the collective intelligence of its employees and the combined capabilities of the technology it utilizes. When a company possesses highly skilled employees and utilizes advanced technology tools, it has the potential for unparalleled success. Unfortunately, this is not the reality for many companies. Some struggle with high turnover rates, signifying the departure of numerous employees, including experienced ones, over time. In this context, ‘high turnover’ implies that employee departures occur frequently. Employee turnover is caused by multiple reasons, and each reason is equally detrimental to the company. The company must identify these reasons and employ appropriate strategies to address them in order to reduce employee turnover.

In this blog, we will discuss the five most common reasons for employee turnover and explore strategies to reduce this high turnover rate.

Here are the Five Most Prominent Reasons For Employee Turnover 

1. Low Salary And Poor Benefits: People often compare their salaries and benefits with those of their friends and family. When employees feel they are not being fairly compensated compared to others, they become dissatisfied with the company and may eventually leave. In today’s competitive job market, companies recognize the value of retaining skilled and talented employees, and they are willing to offer competitive compensation. This is why employees are no longer willing to accept lower salaries and benefits when they have other options to work for companies that provide better compensation.

Related Webinars
Overtime Computations for Nonexempt Employees
Jun 13th 2024 @ 01:00 PM ET
Speaker: Patrick A. Haggerty, EA
Learn More
Audits for 2024: Surviving Those of the Agencies and Conducting Your Own
Jun 25th 2024 @ 01:00 PM ET
Speaker: Vicki M. Lambert, CPP
Learn More
Payroll Overpayments: Handling them Correctly in 2024
Jul 11th 2024 @ 01:00 PM ET
Speaker: Vicki M. Lambert, CPP
Learn More

2. Lack of Career Growth Opportunities: Employees often leave a company when they feel stuck in a position with no room for career advancement. Dissatisfied with this situation, they decide to seek opportunities elsewhere, where they can experience professional growth, learn new skills, and gain the experience needed to advance their careers. They are on the lookout for companies that offer good growth prospects and a chance to broaden their skill set, helping them climb the corporate ladder. Once they find such a company, they leave their current position where they feel stuck.

3. Bad Work-life Balance: Humans are not machines; they can’t work 24X7 without taking a nice amount of rest. They not only need rest but also require some time to spend with their family and friends, where they can relax and enjoy, forgetting the tensions of the workplace. When a company provides a poor working environment and demands long working hours, it starts affecting the mental health of employees and their work-life balance. This, in turn, affects both their personal and professional lives. No employee appreciates such conditions, and any company that promotes a poor work-life balance, whether directly or indirectly, and does not prioritize employee well-being, may find its employees deciding to leave. They seek companies that provide a positive work environment and a healthier work-life balance.

4. Toxic Work Culture: This is one of the biggest reasons behind an employee’s decision to leave a company. No one likes a toxic, negative, and stressful work environment where people in top positions use harmful tactics such as excessive pressure, bullying, harassment, or discrimination against employees. When an employee experiences this toxicity, they no longer wish to work in such a company, leading to a higher turnover rate.

5. Management Failures: Managers play a crucial role in running a company. However, when managers are ineffective, apply undue pressure on employees, or perform poorly in their roles, it can have a detrimental impact on employees’ perceptions of the management. Employees may begin to view the company negatively due to their experiences with these managers, ultimately leading them to consider leaving the company.

Here Are Some Effective Strategies To Reduce Employee Turnover:

1. Provide Fair Compensation: To reduce the employee turnover rate, it’s crucial to meet employees’ expectations by providing them with competitive salaries and the right benefits. This includes ensuring they feel fairly compensated for their work and offering additional benefits such as transportation allowances, free meals, and paid leave.

2. Provide Ample Opportunity For Growth: To prevent employees from feeling stuck in their roles, provide regular training opportunities for them to acquire new skills. Involve them in challenging projects that offer exposure and experience. Additionally, implement succession planning to ensure a smooth transition when an employee leaves the company, quickly assigning the departing employee’s responsibilities to a suitable current employee.

3. Promote Work-life Balance: To effectively reduce employee turnover, companies should prioritize employee well-being and work-life balance in all circumstances. This can be achieved by offering flexible work-from-home options when needed, providing both paid and unpaid leave opportunities, ensuring employees are not overworking or facing excessive commutes. When a company demonstrates such care for its employees, it fosters loyalty among the workforce and lowers the turnover of employees.

4. Positive Work Environment: No employee can work efficiently in a negative work environment, which is detrimental to both the employee and the company. Therefore, it is crucial for the company to establish a positive work environment where every employee is respected and protected from discrimination, bullying, threats, or undue pressure in the workplace. In such an environment, there should be no excessive pressure on employees to meet unattainable standards. When a company fosters such a positive work environment, employees are more inclined to enjoy their work, resulting in a lower turnover rate.

5. Conduct Proper Exit Interviews: You can’t address what you don’t know or understand, which is why it’s essential to conduct thorough exit interviews with employees who have chosen to leave the company. During these interviews, ask them a series of questions to gain insights into your company’s Employee Value Proposition (EVP), the reasons behind their departure, and their feedback and suggestions for improving the company. Once you have gathered this information, assemble a team of department managers to validate the findings from the exit interviews. If the issues identified in the exit interviews are confirmed, work on resolving them as swiftly as possible. After addressing these concerns, gather feedback from current employees to ensure that the issues have been completely resolved. If any recent issues arise, repeat the process to rectify them promptly. By following this approach, you can create a positive working environment that is free from persistent issues, ultimately reducing employee turnover.


Employee turnover can be a significant challenge for companies, but it’s not an insurmountable one. By addressing the root causes of turnover and implementing strategic solutions, businesses can foster a positive and productive work environment. Offering fair compensation, promoting growth opportunities, maintaining a healthy work-life balance, and cultivating a positive work culture are all essential steps in reducing turnover. Additionally, conducting thorough exit interviews and actively addressing employee concerns can help identify and rectify issues promptly. By prioritizing these strategies, companies can create a workplace where employees feel valued, supported, and motivated to stay, ultimately leading to a lower turnover rate and a more successful organization.

Stay Updated

Don’t miss any latest payroll update
Share Now

About Us

At Payroll Pro Guide, we’re dedicated to offering top-quality payroll insights, news, and blogs to enhance your expertise.

Recent Posts


Don’t miss....

Any latest payroll update

confirm your email

Your signup is almost complete! Please check your email for a confirmation message.
Grab our FREE

e-Books on Payroll Management