Why do employees leave after four years?

August 26, 2020

Employees stay with the same employer for just over 4 years. 4.2 years to be precise, according to a 2018 report by the US Bureau of Labor Statistics. But why do employees leave

Some say this 4-year tenure is a sign that the global workforce is suffering from a shorter attention span. But actually, the figures are the same today as they were in 1983. So can we really blame the “job-hopping millennials”? 

Average tenure hasn’t really dropped since 1983

It’s easy to look at the figure of 4.2 years average tenure, and compare this to the traditional idea of a “job for life”. You know, the one where you finish school, you start an internship, you move up the chain, and you eventually retire, without ever seeking employment elsewhere. 

But actually, if you think that this “4-year career” thing is a worrying new trend caused by technology or millennials, then this study by the Employee Benefit Research Institute might surprise you.

According to the report, average tenure in the US was the same in 2018, as it was in 1983. Sure, it went up a bit and down a bit over those few decades. But it started at the same number, and settled at the same number.

So the first thing to consider, when trying to work out why employees have started looking for new jobs after just four years, is that it’s not a new phenomenon – it’s been going on now for decades!

There are plenty of reasons why employees leave, and they’re probably not your fault

If you’re asking yourself “why do employees leave, when their conditions here are so good?” then you’re not alone. But actually, job site Monster says there are a lot of reasons employees leave after just a few years

For example: 

  • No more room for progression. After a few years, employees might find that they’ve reached their full earning potential with their current employer. And when there is no internal opportunity for progression, the natural alternative is to seek an external opportunity.
  • Natural ‘boredom’. Monster reports that it’s around the three-year mark when employees start to feel the itch of boredom. This doesn’t mean you’re a boring employer. It’s just the point at which employees tend to get so settled with their job, that they can feel like it isn’t challenging enough. With no challenge, there’s no engagement. Hence the search for something new and exciting begins.
  • Diverse experience looks good on a CV. While nobody wants to have a CV littered with jobs that only last a couple of months each, having a handful of jobs that you’ve managed to hold onto can make an employee’s career history look strong. It shows that they have experience working within different environments, and dealing with different types of people. It also shows that they can find a job, and keep it for several years – but also that they are in demand by other employers.

I don’t think these are the only reasons employees tend to leave after a few years. But the point here is that while there are certain things you can do to increase average tenure within your company, none of the reasons employees leave after 4 years are really due to a ‘turnover crisis’. 

Turnover and tenure are two different things

As difficult as it might be to accept, employees leaving your company after four or five years is pretty normal. It’s been normal for the last 35 years.

But tenure and turnover are two different things. The thing you need to worry about, is when your short-term turnover is high.

Many employers track short-term turnover across a one-year period. Because if a high percentage of employees are leaving within their first year, it might be a sign that you’re doing something wrong as an employer.

You can reduce ‘bad’  turnover by listening to your employees

If you have a problem with ‘bad’, short-term turnover, then you might take a little inspiration from one of our customers, Circle IT. 

When their Head of HR Jennifer Griffiths first stepped into her role, the company was suffering a massive 54% turnover, year-on-year. They were having to re-employ more than half of their workforce every year, just to keep their business running!

For Jennifer, the solution was simple – she asked employees for their opinion on what life at Circle IT was like. And it returned a lot of insights.

In a nutshell, by listening to what her employees wanted, and actually acting on their concerns, Jennifer managed to reduce turnover from 54% to 15%, which saved her company more than £100,000.

You can watch the full video story here.

Of course, you might be thinking: “So what? Whether it’s 6 months or 6 years, and whether it’s my fault or not, it is a pain in the neck when an employee leaves – what can I do about it?” 

Making a counter offer isn’t always the best thing to do

When a good employee leaves, it might be your knee-jerk reaction to assume it’s all about the money. In fact, the employee may even tell you as much! And you might be tempted to make a counter offer, in order to persuade them to stay. 

But in a post we published a few years back, we identified three reasons why making a counter offer might be a bad idea:

  1. They’ll probably leave anyway. When an employee leaves, it isn’t often about the money. Money might be a factor, but there are bound to be other reasons too. So even if the employee accepts your counter offer and stays for a while, chances are high that you’ll be having the same conversation again in just a few months time.
  2. It sets a bad precedent. As soon as word gets out that there’s free money for anybody who threatens to leave, you may find you have a problem on your hands. Suddenly, everybody is threatening to leave in the hope of a pay rise.
  3. The money could be better spent on regular pay reviews. If you spend this extra budget on giving your employees frequent and fair salary reviews, they’ll be less likely to feel unfairly treated in the first place.

There are times when a counter offer may be necessary. But this should never be your go-to reaction when somebody says they’re leaving.

More advice for improving your retention strategy

Of course, if you really do just want to extend that average tenure, then there are a few things you could try. For example, incentives for staying with your company for five years – such as extra holiday entitlement.

But ultimately, if you run a good ship, and you treat employees well, you’ll most likely avoid the pitfalls of bad turnover anyway.
Or for more reading on improving retention, you might be interested in the views of Andrew Heath, who says that “employees don’t quit a job, they quit a bad boss”. Andrew published an article on our blog about this recently, which you can find here: How to reduce staff turnover.

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