Retaining employees can be critical to an organization’s long-term success. When an employee decides to leave, they take with them valuable institutional knowledge, business relationships, and data. In the short term as well, this loss of talent can also leave organizations scrambling to find new hires, spending resources that amount to an average cost of nearly $4,700, according to data released by the Society for Human Resource Management.
Therefore, finding and preventing the factors that cause employees to voluntarily depart is the first step in stymying turnover. There are the usual suspects – a lack of compensation, few opportunities for advancement, and poor benefits, to name a few. But what about the factors that organizational leaders can’t directly control?
Adina Sterling, the Katherine W. Phillips Associate Professor of Business at Columbia Business School, found that an employee’s decision to leave their organization can be tied to their access to resources outside of their workplace. This resource availability is often connected to their race as well.
While previous studies suggest that racial minorities in the United States are more likely to quit due to workplace discrimination, Sterling’s study of 22 years of data from the National Longitudinal Survey of Youth’s 1997 cohort took a different route. She spoke with CBS about how she came to her conclusions around race and voluntary departure, and what role managers can play in prevention.
CBS: How does quitting impact an organization and how did you study its causes?
Adina Sterling: Quitting behavior is seen as an unforced error on the part of the organization. It is costly to replace employees – it can oftentimes cost thousands of dollars, if not tens of thousands of dollars. Organizational scholars, for decades, have been interested in the reasons that people quit, but the vast majority of that work has studied internal factors, things like, how well does someone like their manager, or get along with their coworkers, or what kind of job assignments do people have?
The real novelty of the research that I did is that it focuses on external factors that can affect the reasons that people quit, and how resources that exist outside of organizations can help explain quit behavior.
CBS: What do you mean when you talk about resources in this context?
Sterling: When I refer to resources, I’m talking about material, symbolic, and physical resources. So how close is someone to work and do they have a reliable form of transportation? Are they in settings where they have access to clean water and air so that they're less likely to be sick? All of these external factors are what I focused on in the context of the work.
CBS: How did you acquire the data for your research?
Sterling: I studied a cohort of around 8,600 individuals that were 16 and 17 in 1996. For the last 24 or so years, the Bureau of Labor Statistics has interviewed these individuals every one or two years. My data comes from that study of those individuals.
For every single job that they've ever had, someone at the Bureau asked the reason that they departed – was it for a voluntary reason or an involuntary reason? If it was for a voluntary reason, they specified why.
CBS: Based on that data, how did you find resource availability to interact with race?
Sterling: The main findings of my research is that race predicts the reasons that people depart. I found that Black workers were more likely to leave for resource-constrained reasons, so reasons like not having access to reliable transportation. On the other hand, White workers were more likely to leave for resource-enabled reasons, such as taking a new job or starting one's own business. That of course requires financial and social capital.
CBS: How can managers make an impact in increasing retention when the causes are external?
Sterling: Managers should take a holistic perspective when considering the reasons that employees quit. It might not just be about one's immediate boss, but instead about the external stressors and also opportunities that people are facing in their lives.
The manager, I think, is core to this. If a manager can be curious and inquisitive about how to help people be their best at work, oftentimes this will naturally bring up for workers some of those outside stressors and opportunities. And in that way, organizational leaders can oftentimes pre-emptively address reasons that their workers might be considering quitting.
