The most important resource of any organization is its people. Every business owner or manager is aware of the importance of employee retention. After all, talent is what makes or breaks the company’s success. Still, the rates of employee turnover and absenteeism continue to rise across every industry, causing businesses to lose money and experience disruptions in productivity and workflow. So why does this happen?

When talking about low employee retention rates, poor compensation and failure to cope with the role are often mentioned among the main causes. However, in 2021, over 30% of people cited a lack of growth opportunities and feeling disrespected as the main reasons for quitting their jobs. Those are the factors that could clearly be foreseen and dealt with by supervisors and managers. 

In fact, managers have one of the biggest roles in low employee productivity or decreasing retention rates. In this article, we will explore 5 reasons why managers are often responsible for high turnover and absenteeism, as well as walk you through some solutions to prevent it. 

But first, let’s define what employee turnover and absenteeism mean.

What is employee turnover?

Employee turnover – is the percentage of employees who leave an organization within a certain period of time. It is calculated by dividing the number of employees that left the organization within a specific time frame (usually a year) by the number of employees that worked there at the beginning of that period.  See Formulas and Cost Details

Overall, employee turnover is a natural process that happens to any company. Life is dynamic and there are a number of reasons people decide to quit. Several industries experience higher turnover than others: for instance, the turnover among service workers will be much higher than for people in other industries (such as financial sectors, government, ect.).

Still, rising turnover rates can signal serious issues in the organization. If your turnover has increased by 10% in the last year, this probably means that there are some underlying problems within the company that are causing employees to become disengaged and seek opportunities elsewhere.

What is absenteeism?

Absenteeism refers to the habit of regularly skipping work without a valid explanation. While all employees can miss work once in a while due to various reasons, chronic absenteeism is a serious issue. According to the book “Absenteeism: The Bottom-Line Killer” by Circadian, the average cost of absenteeism is $3,600 per year for each hourly worker. Studies show absenteeism rates above 1.5% are excessive and can be prevented.

Chronic absenteeism can be caused by many personal reasons, however, it can also be a sign of fundamental issues within the organization, including low pay, toxic work culture, and most importantly, poor management. 

5 reasons employee turnover and absenteeism rates depend on the manager

1. Poor onboarding 

Managers often overlook the importance of onboarding, but it is one of the most critical factors in employee retention. It sets the foundation for a new employee’s success and engagement within the company, so if conducted carelessly, it can become a direct cause of a high turnover rate. Over 1/3 of newly hired employees quit within their first year (The Work Institute). 

Among the most common mistakes managers make during the onboarding process is failure to provide new hires with a clear understanding of their roles and responsibilities or an honest overview of the company’s culture. Most organizations focus on compliance issues versus understanding what the employee needs.

As a result, new employees feel disengaged, they lose sense of purpose and cannot find their place in the organization. No wonder a recent study by The Brandon Hall Group suggests that companies with a strong onboarding process improve new hire retention rate by up to 82%. 

2. Employee burnout

In the past, “workaholics” were perceived as a benchmark for a great employee. Today, however, people begin to understand that a healthy work-life balance is essential for a productive and successful workplace.

Workers who feel burnout are much more likely to skip work for no reason or to find a new position altogether. Managers are the ones responsible for spotting employees that are pushed to their limits and helping them set clear boundaries between their work and personal life. Regular conversations can help managers see the signs of, and understand the stress issues employees are dealing with and what steps they could take to make improvements.

For instance, if a manager sees an employee who works overtime too often or forgets to take vacation days, they should give them a nudge or even force them to take a break.  

However, a truly great manager should create an environment where employees don’t have to work themselves into the ground to feel fulfilled and appreciated. Clarity around roles and priorities, alignment of values, flexibility in schedules and frequent one-on-one conversations and meetings are just some of the ways that help create a healthy and productive workplace.

3. Lack of recognition

Another key driver of employee engagement and retention is recognition. We all need to feel valued and listened to, it’s only human nature. What is more, in recent decades work has become a vital part of our identity. That is why when employees don’t receive timely positive feedback, they are more likely to care less about their performance, skip work or even look for new opportunities. 

To avoid high turnover and absenteeism rates, managers should learn to make their employees feel appreciated. However, it doesn’t mean just throwing a generic compliment once in a while. It is essential to put enough time and effort into performance feedback and recognizing effort and achievement. 

Here are a few ways you can show proper recognition to your employees and improve employee retention:

1. Give sincere and personal feedback

People can recognize insincere recognition from miles away. Simply sending an email that says “Thanks for a good job” is not enough. It’s important to mention what exactly impressed you about an employee’s performance: speed, quality, exceptional communication, etc. 

2. Normalize performance reports or regular one-on-one meetings.

Analyzing employees’ work regularly is a great way to contribute to their professional development, while also showing your appreciation. Of course, it doesn’t have to be praise only. A clear and thoughtful review of employees’ strengths and development areas will go a long way. 

3. Take an individual approach.

Every person has different goals, needs, and motivations. That is why you should try to tailor the way you show your recognition to each employee. For instance, some people would like to hear you praising them in person, some would appreciate an email, while others would be the most excited about some advice on their professional grow

4. Toxic company culture

A toxic workplace is one of the most common causes of high employee turnover and absenteeism. No one wants to work in an environment that hurts their confidence, morale, and mental health. That is why managers should promote a culture of respect, trust, and collaboration, while also minimizing workplace conflicts between employees.

However, very often managers are the ones creating a toxic environment. After all, as the saying goes, “People don’t leave their jobs, they leave their managers.” Disrespect, failure to communicate, lack of accountability – are just some of the common manager behaviors that make the workplace intolerable and increase both turnover and absenteeism rates. 

The best way to spot and handle toxicity in your company is to regularly gather employees’ feedback on the work environment and culture, and take action accordingly. This could include conducting regular employee engagement surveys, monthly general meetings, or simply encouraging an open-door policy for everyone. 

However, if you see that employees’ satisfaction with the work environment is low, but you cannot seem to figure out a reason, it may be time to look in the mirror. 

5. Lack of development opportunities

Last but not least, lack of professional growth is another common reason for high turnover and absenteeism rates. As mentioned previously, work is an integral part of our identity and that’s something a good manager should take into account. 

In fact, a recent survey by Deloitte showed that learning and development opportunities are the second most important factor for both Gen Z and Millennials when choosing a job. If new-generation employees don’t see any career prospects, they will easily become bored and no salary increase will make them stay in the position. 

Investing in the training and retaining of their employees is one of the main responsibilities of managers. In order to keep top talent, they should uncover people’s potential and do their best to cultivate a productive and high-growth work environment. 

Wrapping up

To sum up, high employee turnover and absenteeism rates pose a serious threat to the success of any organization. Not only does the company lose top talent to its competitors, but it also incurs additional costs for recruitment, training, and productivity loss. That is why it is essential to take a proactive approach to employee retention. 

As we have established in this article, managers play a crucial role in rising rates of turnover and absenteeism. It is their responsibility to create a healthy and productive workplace that encourages employees to grow as professionals. 

But, of course, it is not always easy. With all the tasks managers have to juggle every day, it is difficult to find enough time to focus on retention and take the required actions in their interactions with employees to build rewarding employee experiences. 

Here’s where Manage2Retain can help you. We offer a variety of employee retention strategies and solutions, as well as coach support for managers across all industries.