The Turnover Epidemic: Why Employees Are Leaving and How to Prevent It

Benefit Trends Executive Health October 17, 2018

Employee turnover is becoming a critical issue to all companies. In fact, turnover last year in the U.S. was at 28%, an 11-year-high. While retention has been a top priority for both HR professionals and company leaders for some time, the employee turnover epidemic is becoming progressively worse.

Why Is Turnover Getting Worse?

  • The gig economy: It’s more common than ever before for employees to hop from job to job. The gig economy mentality of filling short roles at many different companies is contributing to rising turnover.
  • Low unemployment rate: The unemployment rate is at a 19-year-low. On top of the shrinking talent pool, this means that there are more available jobs; therefore, employees feel confident enough in finding other opportunities to leave their current position.

Why Does It Matter?

  • Lost knowledge: As your key people leave, specialized knowledge that you depend on walks out the door. Training new employees or getting other employees up to speed takes time you may not have to spare.
  • Lost productivity: Missing knowledge leads to losing productivity. This not only impacts the teams directly affected by the resigned employee but also the rest of the company as processes are slowed and efficiency is lost.
  • Lost money: Turnover has huge costs. On top of lost knowledge and productivity, losing a high-level or highly specialized employee can cost up to 400% of salary.

Why Are They Leaving?


While we all know that a competitive compensation package is clearly a necessary component to retaining your employees, it’s still important to note. Compensation can be viewed as a ‘given,’ which lends itself to being overlooked.

With today’s job market, you can’t be too informed on competitor salaries. If your employees aren’t happy with what they’re earning, chances are they’ll be seeking out other opportunities. Don’t assume your compensation is competitive: Be certain.

That said, it’s also important to know that there will always be other companies with deeper pockets, so to avoid a bidding war, differentiate yourself with compensation alternatives that have dual purposes. More on this in a second.


Benefits are the main factor in an employee’s decision to leave a job, health insurance benefits being #1. High benefits satisfaction also correlates to high job satisfaction.

Seeking out great employer-paid primary health benefits in today’s health insurance industry is difficult due to soaring costs for both the employer and the employee. An alternative is supplemental health insurance. This kind of insurance can be layered on top of the primary plan to offer additional coverage.

Expense reimbursed insurance has a specific strength in this ability. Unlike other kinds of limited, indemnity-based supplemental health insurance, expense reimbursed insurance can reimburse for many types of health insurance expenses without event-driven conditions. These plans can range from $5,000 to $100,000 in annual coverage that reimburses for everyday deductibles and coinsurance, as well as more unexpected expenses, like cancer treatments, screenings, IVF and medical equipment. Expense reimbursed insurance can even be offered to select employee classes, so it’s possible to provide this coverage boost to just those employees at-risk of leaving.

This type of health insurance also has compensation power because of its reimbursement nature and tax-efficiency*. The reimbursements received is money that they no longer have to spend after-tax using their paycheck. While this is clearly a healthcare benefit, it’s also working as a compensation tool. Having a unique benefit that provides dual power can be a compelling reason to stay with your company.


Another top reason employees leave is because they are looking for mobility and growth at the company, but they just aren’t finding it. You may think that providing employees with training opportunities may make them more marketable to competitors and more at-risk of leaving, but it can actually show employees that you are invested in their future at the company. It can also help them become specialists, too.

Make sure growth and learning opportunities are readily available for your employees, especially those employee groups that are particularly important to your bottom line and difficult to hold onto. These individuals are probably already looking for ways to spread their wings. If you provide this possibility within the company, they may not be compelled to look elsewhere.


Employees need vacation and rest time to perform at their most optimal levels. But perhaps even more importantly, employees need the encouragement to feel comfortable enough to take those days off. One without the other creates an uncomfortable atmosphere and may drive an employee to leave. Yes, paid time off should be part of a retention plan, but the mentality surrounding that paid time off needs to be addressed as well.

Sidestepping the Turnover Epidemic

Chances are you won’t be able to avoid the turnover wave all together, but if you have a plan in place and address these points of contention, you can be better equipped to keep those key employees. You may even find that you’ll become the employer that all those employees are turning over to.

*This is not local, state or federal tax advice as each person and company is unique. It is recommended that you seek the independent counsel of a professional tax adviser.


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