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Why so many new hires leave within the first year and how to prevent it


The expense of finding and retaining top-performing talent can challenge organisations’ profitability, and if employees leave within the first year, there are even more costs.

Research shows that only 12% of employees leave their employer to earn more money.[1] That means most employers can take action to prevent staff turnover. One of the most common reasons staff leave a company is failure to fuel the intrinsic motivation that most new hires feel.

Here are five key reasons employees leave during the first year:

1. Excessive workload

New hires are often more productive but if you give them more work than you give their peers, they are bound to feel resentment. Instead of making new hires feel penalised for outperforming their co-workers, set realistic expectations for all employees and find ways to elevate the productivity of underperforming workers. Reward employees with extra time off or promotions when they do well, so they don’t leave the company feeling overwhelmed and unfairly treated.

2. No acknowledgment

Staying silent when employees do a good job, or worse, vocally criticising poor performance then refusing to acknowledge a job well done, demotivates workers. To improve retention, organisations need to show their appreciation for employees. Accolades don’t impact the company’s bottom line. Adding financial rewards or extra time off where possible makes employees feel appreciated and encourages them to repeat desired behaviours.

3. Lack of flexibility

Insisting staff keep a traditional schedule is out of step with most organisations in the age of mobility. It can even make employees resent you for making them miss important moments in their personal life. The more flexible the company can be, the less likely employees are to go and work for a competitor.

4. Poor transparency

When workers don’t understand the company’s goals and future plans, they can feel as if they aren’t important to the business. By communicating openly and honestly with employees and including them in tactical and strategic decisions, they become more loyal and invested in making the company succeed.

5. No communication and engagement

Poor communication can leave staff having to guess what they’re supposed to deliver, which can lead to employee dissatisfaction. It’s important to listen to complaints and requests from your team then address them directly. It’s also critical to let your staff know they won’t be adversely treated for providing feedback, even if it’s negative.

6. No career opportunities

Employees leave a job sooner when they sense they have little or no opportunity for growth and advancement. Giving workers a clear path to promotion and providing training opportunities will make them less likely to want to leave.

7. Lack of team spirit

Everyone wants to work in an environment that’s friendly, open and fun, but that doesn’t usually happen all by itself. It typically takes some effort on the part of the employer to create and foster a positive atmosphere in the workplace. It stands to reason that if your staff are happy in their workplace and get along well with each other, they are much less likely to want to look elsewhere. What’s more, they are also likely to be more productive if they are content. Events outside of work, such as a regular staff lunch, or even Friday afternoon drinks and snacks in the office, is a great way of developing a bond within your team and also shows that you care for and appreciate the efforts of your staff.

To keep employees engaged and positive, it’s important to make your company a great place to work. That means eliminating the factors that cause high employee turnover to improve retention and reduce recruitment costs.


About the author

Rob van Es_landscapeRob van Es is Acting CEO at REFFIND. He has more than two decades of experience managing sales for high-tech start-up and later-stage companies.


  • David Pearce

    Interesting article Rob. I do not believe most managers or
    organizations have a very accurate idea of the true cost of employee
    turnover. If they had a reasonable idea
    I believe they would not waste a minute to rectify the underlying cause. Here is a tool, “The Cost of Failure
    Calculator” that will enable them to accurately compute the exact cost to their

  • Cindy

    Hi Rob, Great article, spot on advice. My only comment would be in relation to No. 6 – sometimes in smaller organisations there aren’t necessarily career opportunities but if this is made clear at the outset and all the other factors are right, it should still work. Someone might not stay more than a couple of years but they will hopefully be at their best. Cindy