Top 5 Reasons Why Employees Quit Because of Their Leaders

Nearly half of U.S. workers are actively looking for a new job in 2024 according to a study from LinkedIn and Microsoft. A similar survey from ResumeBuilder shows that 28% of workers said they are likely to quit with the highest numbers among younger workers.

While there is a long list of reasons why employees say they are quitting, almost every one of them relates back to company leadership. When leaders fail to create the right work environment for the employees and invest in their success, bad things happen. It often means the best performers will leave as they are more likely to have other options, impacting company performance.

So, what are the top reasons why employees quit and what role do leaders play in ensuring their organization avoids these mistakes? Let’s break them down.

1. Lack of Growth Opportunities

It’s easy to get caught up in immediate business needs and deliverables and put employee career aspirations on the back burner. When leaders fail to invest in their team members’ professional development, however, it creates a stagnant work environment and invites turnover.

A study by career site Zippia found that more than three-quarters of employees are looking for opportunities to expand their careers. For some, it’s about the potential to learn new skills and advance. For others, it’s about making themselves more valuable to avoid falling victim to downsizing or obsolescence.

How important are training and growth opportunities? The same survey showed that 92% of employees say growth opportunities, training, and career paths had a positive impact on their engagement in the workplace.

Yet, nearly 60% said they have no formal training or growth opportunity. This lack of leadership in this area is a key reason why employees look for a job elsewhere. Leaders who fail to prioritize growth opportunities are at significant risk for turnover. When employees feel they’ve hit a ceiling, they may look elsewhere.

2. Negative Work Environment

One of the most important things leadership does is to create the right environment for employees to thrive. Failing to build and maintain a positive organizational culture can cost you your best employees and cause significant problems in recruiting as well.

A negative corporate culture can make even jobs workers like seem unbearable, impacting their mental and physical health and creating:

Excessive stress
Poor morale
Disengagement
Culture of fear
Burnout and depression

Nearly half of employees say they experience work-related stress daily on the job according to Gallup. For many employees, the situation is bad enough that 35% said they would take lower pay to escape a toxic workplace.

3. Poor Communication

Poor communication is common in the workplace and it’s become even more challenging with today’s remote and hybrid workforce. When managers and supervisors fail to communicate effectively, it hurts productivity.

If you think you are communicating effectively in your workplace, consider this: According to a Gallup survey, only 7% of workers strongly agree that they are getting accurate and timely communication where they work. Employees cite a lack of clear direction about goals and expectations, inconsistent (or conflicting) messages, and a lack of understanding of how their job aligns with company performance.

When employees experience good communication, it has a significant impact. A McKinsey study shows that effective communication can improve productivity by up to 25%.

However, communication is not just about providing clear instructions. You must provide regular feedback and conduct meaningful performance appraisals. A Pew Research survey shows that 80% of employees who received regular feedback said they were happy or very happy with their manager or supervisor.

4. Lack of Recognition

Employee recognition is a powerful motivator, yet a lot of managers and supervisors underestimate how important it is. Even in good working environments, bosses who ignore employee efforts can make team members feel undervalued, causing them to question their role within the organization.

Yet, recognition for a job well done is one of the easiest— things you can do. It doesn’t require expensive HR tools. A simple thank you or recognition in front of peers can go a long way. Small financial incentives can also make a considerable impact. A Gallup/Workhuman study of a 10,000-person organization showed savings of more than $16 million annually from reducing employee turnover when recognition was an important part of company culture.

5. Inadequate Compensation

While money isn’t always the top reason employees leave, it plays an important part. Sometimes, employees have needs that require a higher salary. More often, it what’s the compensation and benefits package represents. For example, if workers know they are being paid less than others in the same job or at competitors, it sends a strong message about their value.

Leaders should advocate for fair market rates. They also need to address salary concerns to show they value their employees.

Employees today demand fairness and transparency in decision-making. When they feel their managers or supervisors do not deliver on these goals — especially when it’s about something as important as their paycheck — it’s a surefire way to lose talented people.

PwC reports that 83% of workers rate fair pay as important to remaining in their jobs, but only 57% agree that their workplaces provide that. When employees feel their financial needs are dismissed or undervalued by leadership, they’re more likely to seek opportunities with organizations that offer more competitive compensation packages.

Developing the Right Employer-Employee Relationship

The relationship between company leaders and employees plays a significant role in retention rates and attracting top candidates. Leaders who pay attention to these five critical areas significantly increase their odds of success, creating the kind of workplace where employees feel valued, treated fairly, and make a valuable contribution.

A supportive culture, focused on clear communication and transparency, can go a long way in keeping employees engaged and productive.

OneDigital | Resourcing Edge is a trusted resource for HR and payroll administration, offering professional employer (PEO) services to help you manage the burden of employee administration and help your employees grow.

Contact OneDigital | Resourcing Edge to discuss your HR needs today.

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