Wednesday, December 15, 2004

How people come to leave

Most of the reports and studies that I had seen on the reasons people leave an organization were very much concentrating on the reasons that people give when they leave, not on the process that they go through to get there. Given this I wanted to do some research to develop an understanding of the dynamic process underlying their decision.

Now for the caveat – this understanding was done by doing some statistical analysis understanding several linked components and what the fit was between them. It was an analysis using a large population size (n=65,000) employee opinion survey. As such it didn’t track individuals through the dynamic process but tried to identify a trend by looking at fit between a large number of variables with the large number of responders. A relatively simple pattern is observable.

Let’s visualise one hire (for the sake of the explanation let’s call him Peter – there seemed little difference in the pattern between male & female though there were some differences in the numbers at each stage).

Peter joins the firm as an experienced hire. He does so with a certain expectation about what it is going to offer him – not just in terms of the ‘hard’ bits of the offer like salary, pension etc. but also the ‘soft’ bits – what his new boss is going to be like, the social aspects of working in the new team… Let’s make the assumption that Peter is happy with this package of ‘benefits’ that he is going to get from the job (ie it was the best that he saw on his job search)

During the first period of time he researches actively the ‘soft’ stuff trying to understand his new environment. He probably focuses on what the job really is about (the challenge) first followed by what makes the organization tick. This process in what is often called the ‘socialisation’ period is one of the key factors in determining his retention.

Let’s say he is initially content (he still thinks that he has made a good choice). Over time however something always changes, not least the challenge (it always gets easier over time to do a job, unless of course the job changes) – of course he could find that he and his boss don’t really click. Anyway something changes.

When Peter joined he felt that the pay and time he has to put in were ‘fair’ (he wouldn’t have accepted the offer if he didn’t, given our assumption). In fact, if you ask someone about pay and they say ‘pay isn’t the most important thing’ what they mean is that ‘I think the pay is fair to balance the other positives and negatives of the work’.

As people spend longer in a role the balance how they perceive positive and negative aspects changes. We found a strong link between the time people spent in a role and their desire to move on (either internally or externally).

As this happens something else occurs – their feeling of being ‘underpaid’ changes and so does their desire for ‘more work / life balance’ (ie more free time or less time demanded in other ways to do the job eg commuting, working after hours etc). The linkages between feeling underpaid and desire to have more work / life balance were startling and they were very closely linked with people who either were actively planning to leave their role or were thinking about leaving.

Why does this happen. Well let’s consider when Peter joins. He is initially happy with the job – the positive aspects (pay, other hard benefits, the ‘soft’ benefits) either are equal, or better than the negative aspects (the time he has to commit to the job, commuting, the negative aspects of his boss, any lack of challenge..) Over time this balance changes, either from things he learns on the socialization period, the challenge of the job dropping, something changing the job (a restructure for example, or just someone key leaving the team). What can Peter do about this?

Well, very little. However he still wants to balance the positive and negative aspects but to compensate for the increased negative aspects he now wants more money or to work less (or likely both to some degree). What becomes top of Peter’s mind is that he is not being paid enough to put up with all the bad stuff. So when he leaves the money is quite high up on his list, though it hasn’t changed since he joined (or has been increased inline with the market). When he resigns he tells HR in his exit interview ‘I felt I was underpaid’ or ‘I want a better quality of life’. The money or work / life balance becomes ‘the straw that broke the camel’s back’

For this reason fighting retention on money is a short-term strategy – it neither cures the underlying reasons for the unhappiness and is far too easy for your competitors to copy.