Top 5 Employee Retention challenges

Have you ever wondered why people leave your company at a rate higher than the industry average? You must have noticed the hit to your bottom line. Indeed, a high rate of employee churn is a costly affair.

What are the main reasons for employees leaving a company? Unsurprisingly, a bad salary can cost you your top employees. People also are constantly on the lookout for better opportunities that challenge and excite them, as per the latest surveys. Many employees even cite overworking and lack of appreciation as the reasons for leaving. Finally, there is something that is directly under your control—failure to hire the right employees.

When it comes to retaining the top-performers, it becomes especially hard. They tend to jump ship constantly. So identifying why employees leave your company and how to retain employees is crucial if you want to save thousands of dollars.

Estimates peg the cost of replacing an old employee at 40,000 USD.  You arrive at this figure by taking into account the time and money taken to advertise, recruit, and provide corporate training to new employees. Not to mention the loss in productivity.

As you read on, you will see how each of these employee retention challenges affect your employee turnover rate and rid your company off your valuable employee.

Dissatisfaction of Salary

It goes without saying that in the absence of the right incentives, employees will be on the constant lookout for a new job. Some estimates show that most employees would leave for a 10 percent hike offered by another company.

As a result, if you don’t want to have an increased cost of employee turnover then you need to break from the trend of miserly salaries and hikes. However, employees are not just looking for great salaries; they are also interested in the benefits on offer. This is shown by a study done by Aflac that concludes that 1 out of every four employees believe that a good package is an indication of the company’s concern for employees.  

As part of the package, most employees look for retirement benefits, paid sick leave, and health insurance, and failing to provide these can lead to a loss of talented employees. Nowadays, there are unconventional incentives that employees have come to expect, such as onsite childcare and pet insurance.

If an employee turns out to be a high performer, there is also the expectation of bonus programs and awards for employees to be put in place. In most cases, these can be in the form of stock options that make sure the employee feels more connected to the company.

Dissatisfaction of Salary

Besides, employees also tend to not favor companies with rigid working hours.

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Better job opportunities in the market 

Based on a recent survey by The Harris Poll found that people mainly leave their jobs due to a lack of career development, employee recognition, job satisfaction, and career growth opportunities, we can conclude that employees value upward mobility in their job. If you fail to provide the same, you stand the risk of losing one in three employees, as the aforementioned study pointed out. 

Notably, employee attrition has been a thing even among companies that strive to provide developmental tools. This is largely because only 26 percent of employees found the tools effective. 

For more proof, look no further than the study put out by Global Talent Monitor, which concluded that there was a strong correlation between employees leaving and the fact that they did not see a viable future in the company. 

The employees feel the urge to leave by also seeing their colleagues walking out of the door. They feel the ripple effects of more workload, new employee trainings as well as not seeing any company growth.

This feeling is generally a result of spending countless years toiling away without any upward mobility. People may also shift to another job if they do not find their role with the current employer challenging enough. They may even leave the company if they feel they are not learning enough, and then they come across an opening that promises them rapid employee growth and advancement when it comes to skills.

Hiring wrong Candidates

If there is one thing a company needs to know, it is that employee retention starts with the hiring process. It cannot be overstated how important it is to hire the right people for your team. One of the major employee retention objectives is to avoid hiring the wrong candidates.

Making sure you pick the right person is especially important given how employees who have been with you longer tend to be the most productive. One of the key element of employee attrition is the fact that managers place little emphasis on whether the people they hire can fit into the organizational culture. Also, there are times when managers have to on-board people rapidly without thinking about long-term ramifications.

That is a huge mistake!

Ideally, a candidate should have spent a significant amount of time in their previous company, which is a good sign of good employee engagement and the ability to stay committed to a role. Another thing managers need to look for before taking on staff is whether the employee has a volunteering record. 

Hiring wrong Candidates

Checking whether potential employees have been involved in any kind of team sports is another way to gauge if they will be ready to commit to your company.  

Of course, you can choose your own metrics to pick the right person, but remember how costly it is to pick the wrong person who refuses to stick around for long.


Lack of Appreciation

Like everyone else, employees feel the need to be thanked and appreciated for what they bring to the table. To have the best chance of talent retention, you need to prioritize in lifting the employee morale,  appreciating them and focussing on employee experience, which will lead to an engaged and motivated workforce.

As per a comprehensive study, most senior executives think their company has in place mechanisms to reward employees for good work, but only around thirty percent of employees feel the same way. This means that there is a lot of work left to be done if you are serious about your talent retention efforts.

The gaps in showing employees that you value their work is quite prevalent around the world, as evidenced by a Gallup study that showed only one in three American workers got praised for something they had achieved in the last week. This is especially alarming given how employees who feel they are not valued enough are twice as likely to quit within a year.

The issue of lack of appreciation is especially severe when employees feel that an unqualified person has gotten a promotion ahead of them. This brings in them a lack of confidence to stick on with their current employer.

Unrealistic expectations from Employees

As per recent data from the American Institute of Stress, more than half the workforce is stressed at work. This trend has been consistent over the last five years, according to the same source.

Unsurprisingly, the unrealistic expectations from employees are the key driver of this stress, which consequently leads to employees quitting in droves. This means that the impetus is on managers to play an active role in helping employees cope with stress.

It is worth noting that the youngest employees who might be new to the corporate work culture, are the most stressed out. Specifically, it was people between 18 and 34 who felt the most stress from having to face unrealistic expectations at work.

unrealistic expectations from employees

Unrealistic expectations that lead to employee exits from their jobs can take the following forms:

  • Work overload
  • High-pressure deadlines
  • Unreasonable expectations of quality

Now, what could be the cause of this? There are quite a few, but the most prominent ones are:

  • Poor leadership
  • Lack of communication
  • Lack of flexibility in work timings
  • Unclear goals
  • Lack of employee development

When an employee feels that they have to shoulder unrealistic expectations, they tend to lose morale and tend to burnout, which is when they decide to quit the company.

Human Resource Management Course

Books on Employee Retention that you could try:


As billionaire Sir James Goldsmith puts it, “If you pay peanuts, you get monkeys.

Ultimately, whether your top employees stay with you in the long term boils down to how well you treat them.If you understand the importance of employee retention and want to

If you understand the importance of employee retention and want to retain your most valued workers, you need to stop taking them for granted and make it a priority to cater to their needs and provide a nurturing environment where they can thrive with optimal employee retention strategies.

Merin is an HR professional with an MBA in Human Resource. She likes doing a lot of research and study in the field of Human Resource and can't help but share her knowledge on the same in this platform. She is also a great cook and during her free times she keeps experimenting with new dishes. Know more about Merin by clicking here.
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