Reasons Employees Are Leaving Their Jobs & How To Prevent It

Businessman leaving a job, holding cardboard box and laptop bag, dossier and drawing tube in box.

American workers have been leaving their jobs in record numbers since the onset of the pandemic in 2020, with the quit rate ticking higher with each passing month. According to Yahoo Finance, in 2021, roughly 48 million people quit their jobs, and resignation rates remained elevated during the first months of 2022. Alaska, South Carolina, Georgia, Delaware, and Kentucky were the states where the quit rate was highest.

For employers, the ‘Great Resignation’ intensifies an already-challenging labor market. On top of dealing with unprecedented staffing shortfalls, companies now have to contend with numerous factors–some of which are out of their control–that are causing employees to leave their jobs.

So why are so many workers quitting? We’ll reveal the five top reasons employees are leaving their jobs and the steps employers can take to prevent it.

The Case For Keeping Employees 

If employees resigning is such a widespread trend, is there anything companies can really do about it? The answer is yes, and it pays to invest in it. 

Employee retention comes with a cost, but it pales in comparison to the expense of hiring completely new workers or leaving important positions open. Indeed places the cost of hiring a new employee between $4,000 and $20,000–and that’s before accounting for their pay and benefits. According to Gallup, voluntary turnover costs U.S. businesses $1 trillion a year. 

Thankfully, retention strategies are a proven way to keep employees on the job. The key to success is aligning those strategies with what your employees actually want. To understand that, we have to get to the bottom of their reasons for leaving. 

Reason #1: Low pay

Money has always been a top motivator for people to leave their jobs, but this factor has been exacerbated in the last 12 to 24 months. With inflation driving up the cost of living at a pace we haven’t seen since the 1980s, many employees are finding their salary is no longer cutting it. What might have been a low, yet manageable wage two years ago suddenly isn’t enough to make ends meet for millions of workers. 

At the same time, the cost of childcare is enormous. Many two-parent households with children have decided it’s more cost-effective to have one parent stay home and be the primary caregiver rather than allocating close to an entire salary on daycare. 

How To Prevent It

The straightforward solution is to pay more. Ensure your salaries are on par with the standards for your industry and geographical area. 

But simply throwing more money at employees isn’t always effective (or possible). If you can’t increase salaries in a meaningful way, consider other incentives that employees rank as highly important, like performance-based bonuses and high-quality healthcare. 

Related: Employee Incentive Programs To Motivate and Engage Your Staff

Reason #2: Health Risks

COVID-19 forced healthcare workers and other front-line employees to take a hard look at the value of their career versus their physical and mental health. Nurses in particular decided their jobs weren’t worth risking serious health consequences for; in November 2021, a whopping 32% of U.S. nurses in a patient care role said they were considering leaving their jobs. 

But healthcare isn’t the only profession where health concerns have trumped career goals. Restaurant and hospitality employees expressed frustration over being in high-risk environments and employers not taking the proper precautions to protect them. 

How to prevent it

While the pandemic’s grip on American businesses has loosened, workers still want to feel that their company values and protects their health. Companies should stay abreast of workplace safety guidelines issued at the national, state, and county level and implement measures to comply with them. 

Beyond pandemic-related health considerations, an employer-sponsored health insurance plan is seen as a must-have by top employees. Workers also increasingly value mental health services like wellness apps and health benefits that cover therapy or counseling. 

Related: Ways to Improve Employee Mental Health

Reason #3: Work-Life Balance

The seismic shift to remote work awakened millions of employees to the benefits of working from home some or all of the time. Many employers embraced the shift, but others have resisted it, and it’s cost them in the form of increased resignations. 

In a 2022 survey, 39% of workers ranked work-life balance as the most important element of their job, even above compensation. Top employers are now wooing candidates with unparalleled flexibility in the form of remote work and unlimited PTO days. So, if an employee is unhappy with their work-life balance at their current job, it’s relatively easy to find a better option elsewhere. 

How to prevent it

If your business model supports it, allow some or all of your employees to work from home part- or full-time. If remote work isn’t an option, consider other flexibility offerings that don’t come with additional costs, like non-fixed arrival and departure times, more control over scheduling and shift changes, floating holidays, or a compressed workweek. 

Reason #4: Switching Careers

For some employees, the pandemic was a catalyst to step away from the workforce either temporarily or permanently. For others, it was the motivation they needed to pursue an entirely different path. One survey found that 20% of workers quit their jobs to pursue a new career. 

In some industries that were closed for long periods of time, like restaurants, workers couldn’t simply sit back and wait for their places of work to reopen. So, they took the opportunity to go back to school or upskill into other fields and now, won’t be returning to restaurant work. It’s put employers in a tough spot. 

How to prevent it

While you can’t keep employees from leaving to follow their dreams in a different field, you can give them a clear path to grow upward in yours. Provide ample opportunities for advancement and cross-training. Cover a portion of the cost of professional development for employees. Promote from within whenever possible and prioritize internal referrals. If you don’t already have a mentorship program, consider starting one. 

Employee retention should be a top organizational goal that all levels of management play a part in. Managers should have honest, regularly scheduled conversations with their reports about their goals, progress and where they see themselves in the future. 

Related: How To Start a Workplace Mentorship Program

Reason #5: Striking Out On Their Own

The desire for greater flexibility and independence has contributed to another workforce trend: steady growth of the freelance market. The promise of “being your own boss” has prompted droves of workers–an estimated two million in the last two years alone–to leave their full-time jobs and become independent contractors, making their own hours and setting their own rates. 

Freelancing isn’t the only way employees are striking out on their own. Many are taking the opportunity to start their own businesses, which technology has made easier and more affordable than ever.

How to prevent it

Employees increasingly resist the feeling of being married to a company, especially those on the younger end of the workforce. Instead of being loyal to one organization for many years, workers are more apt to hop from one job to another as good opportunities present themselves. 

Capitalize on employees’ entrepreneurial spirit by offering them opportunities to spearhead creative projects and work independently. Keep micromanaging to a minimum as much as possible. 

If employers want to change the course of the Great Resignation and overcome the persistent staffing shortage at long last, they must first turn their attention inward and enact measures to prevent their existing employees from jumping ship.


Resources and sources

  1. https://finance.yahoo.com/news/states-job-resignation-rates-pandemic-123749821.html?guccounter=1
  2. https://www.indeed.com/hire/c/info/cost-of-hiring-employees?hl=en&co=US
  3. https://www.gallup.com/workplace/247391/fixable-problem-costs-businesses-trillion.aspx
  4. https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/surveyed-nurses-consider-leaving-direct-patient-care-at-elevated-rates#:~:text=Healthcare%20workers%20and%20their%20organizations,according%20to%20McKinsey’s%20latest%20research.
  5. https://www.businesswire.com/news/home/20220125005017/en/Work-Life-Balance-Is-More-Important-Than-Compensation-in-2022-Paro-Research-Finds
  6. https://www.usatoday.com/story/money/2022/01/04/great-resignation-number-people-quitting-jobs-hit-record/9083256002/
  7. https://thrivemyway.com/freelance-stats/
Pete Newsome

About Pete Newsome

Pete Newsome is the president of 4 Corner Resources, the nationally acclaimed staffing and recruiting firm he founded in 2005. His mission back then was the same as it is today: to do business in a personal way, while building an organization with boundless opportunities for ingenuity and advancement. When not managing 4 Corner’s growth or spending time with his family of six, you can find Pete sharing his sales and business expertise though public speaking, writing, and as the host of the Hire Calling podcast.