When you buy shares you are a part owner of a company and similar to most things in life, sometimes it is good to be an owner, sometimes it is not. At your work, you may be the owner or you may work for someone who wants to think like the owner to bring in and keep profitable business. In every work force people leave and there are many reasons for people leaving ,but they can be put into 7 categories. The reason why as an investor you need to pay attention to employees leaving is two fold: one to replace an employee cost about the amount of salary they receive (if fewer people leave, the company saves money) and two the baby boom generation is retiring – over the next 5 years 75 million will have retired to be replaced by 45 million. The good news for the next generation is soon there will be a jobs shortage and keeping and retaining employees is going to be and is very important.

In the book The 7 Hidden Reasons Employees Leave by Leigh Branham published by the American Management Association, NY, 2012, Mr. Branham outlines the reasons why people leave. based on what over 20,000 people who were asked by their companies said. In terms of management, by having better management or good management which translate into low turnover, no matter the industry and sector, the company saves money. If a company has a high turnover, it wastes both money and people. The first thing to remember similar to most decisions people make, the decision to leave your workplace typically involves numerous reasons and the decision is the law straw that breaks the employer employee bond. The key is over 2/3’s of the employees would have stayed if  changes made or managers matter.

If you believe the primary reason people leave is money, then you are wrong. The reality is most people make lateral transfers in the hope of moving upwards, it is not very often a person moves from a $10 a hour job to a $20 a hour. The money is closer to the first, but  the working conditions and work expectations change.

The 7 hidden reasons are:

1. the job or workplace was not as promised.
2. there was a mismatch between job and person
3. there was too little coaching and feedback
4. there were too few growth and advancement opportunities
5. workers felt devalued and unrecognized
6. there was stress from overwork, conflict and work-life imbalances
7. workers lost trust and confidence in senior leaders

 

Mr. Branham does not present the 7 reasons as their importance or frequency but the first two are listed because they tend to occur early in the person’s tenure. However, one can see the 7 hidden reasons – money is not the most important aspect. The best issue is picking and keeping good managers is the key.

Linking to dividend paying stocks, as investors we expect the company to make profits to pay dividends and in some cases they have monopoly like structures that should enable them to do that. From an investor viewpoint you want to know the people (every company’s most valuable asset) contribute and have a low turnover. A low turnover rate means people want to stay and contribute and the company saves money which allows them to make more.

There are more questions than answers, till next time – to raising questions