Why Does an Employee Stay In a Company?

Companies often invest great amount of time and money to know the causes of employee turnover. According to Harvard Business Review’s Answer Exchange, there are 5 reasons why employees stay in a company. These are:

  • People’s pride in their organization. Everyone loves to be in a well-managed company.
  • Employees tend to stay in organizations that offer fair compensation, competitive wages and other benefits. It is also essential for companies to provide opportunities to learn and achieve.
  • Supervisors or line managers too play an important role in employee retention. People love to work with compatible supervisors who are supportive of them.
  • The work itself is another important factor. People prefer organizations that allow them to do work appealing to their deepest and passionate interests.
  • Employee association is important for building harmonious and cordial relationships. It also helps in employee retention, as people tend to continue working with like-minded colleagues. Mutual respect is essential here.

A study was conducted to identify the reasons behind workforce stability back in 1973. Since then, several studies were conducted to understand the behavioral pattern of thousands of employees in over 500 companies. The study conducted in 1973 and other recent studies elicited similar results. Based on selected interviews and anonymous questionnaires it was observed that employees prefer to stay in a company until there is a strong external force that leads them to leave. In general, there are two internal factors and two external factors that contribute in employee retention. The internal factors include satisfaction and the condition of the working environment. These factors are directly affected by the correlation between management and the employee’s personal value system. If there is a disparity between organizational and personal values, employee’s desire to stay will reduce. Similarly, a cordial relation between these two values will increase employee’s desire to stay in the company.

The external factors that are likely to motivate employees in termination include personal and family reasons and perceptions of other job opportunities. Many employees report that family and personal reasons forced them to stay in an unpleasant job.

To improve employee retention, management needs to reinforce positive reasons for employees to stay. And while doing so, they should consider the people who are staying despite low job satisfaction. Through progressive management, they should try to make it easier for employees staying due to negative reasons to quit. This will at least improve turnover quality. Better yet, it will lead to an effective employee retention strategy over the long run.

Management should try to improve employee’s attitude towards work, work group cooperation, opportunities to get ahead, and supervisor competence. Another factor that leads to employee retention is improving their confidence in the fairness of organizational management and consistency in treatment. Other work content factors include salary and compensation, attendance rules, privileges, facilities, and additional environmental aspects.

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