The end of the year is a time of upheaval. Winter brings nature into a brief moment of stillness to provide new resources for the upcoming spring. For many people, this time means reflection, re-evaluating their professional situation and checking whether their current role and employer are still in line with their personal goals and values. If this is not the case, for some people it means taking a new direction. It is therefore not surprising that most resignations are submitted between the beginning of September and the end of December. In this blog post, we talk about the dynamics of resignations, their costs and how HR managers and People & Culture teams can be proactive.
The reality of terminations
Let's start by taking a quick look at what we know about notices of termination: We've already learned that most resignations are submitted between the beginning of September and the end of December. But why do people actually resign and what does it cost when employees leave? You can find out more in this paragraph:
Reasons for terminations
The reasons why employees leave a company are varied and must of course always be considered in the context of individual life realities. The most common reasons for resignation from current studies can be summarized as follows:
Conflicts in the workplace: Unresolved conflicts in the workplace can significantly affect the working atmosphere and cause employees to leave the company in order to protect themselves from further tensions.
Dissatisfaction with the corporate culture: The corporate culture plays a decisive role in employee retention. If employees feel that their values are not aligned with those of the company or that there are shortcomings in communication and collaboration, this can lead to resignations.
No compensation for overtime and lack of appreciation and recognition: If employees do not feel sufficiently valued and recognized, this can lead to frustration and dissatisfaction. The need for recognition and rewards for good performance is a key factor in employee retention. This appreciation can also be of a financial nature, but not exclusively. In recent studies, the most common reason for dismissal is the lack of compensation for overtime.
Inadequate work-life balance: An imbalance between professional demands and personal life can lead to dissatisfaction. Employees who feel that their work is affecting their quality of life tend to look for better working conditions.
Professional development: Many people resign because they are looking for professional development. If employees feel that their current position does not offer opportunities for personal or professional growth, they often look for new challenges.
Costs of terminations
The dismissal of a well-trained employee can cost the company up to 200% of their annual salary!
Quite an alarming and, for some, surprising figure. But where does this figure come from?
Some cost aspects associated with redundancies are obvious: e.g. personnel costs for administration and costs for recruiting new employees. Less obvious, however, are the costs associated with the loss of knowledge when experienced employees leave. This loss of knowledge can affect the efficiency and productivity of the entire team or, in the worst case, the company in the long term. Other cost aspects are also hidden in the additional work that arises for the remaining employees. This not only triggers dissatisfaction and more stress, but in the worst case leads to further redundancies (or in extreme cases to a redundancy domino).
Fully considering these aspects is critical to understanding the true cost of employee turnover and taking preventative measures to foster a positive work environment.
Preventive measures: How can dismissals be avoided?
In the next section, we present specific measures that HR managers can take to minimize silent resignations. These include building trust, open communication and a dialog with employees to address dissatisfaction at an early stage.
In order to avoid dismissals, companies should focus on various preventative measures. Promoting professional development through further training opportunities and clear career paths strengthens employee loyalty to the company. A positive corporate culture that promotes diversity and actively involves employees creates a motivating working environment.
A good work-life balance is supported by flexible working hours and home office options, while regular feedback meetings promote recognition and highlight development opportunities. Transparent communication and open dialog platforms prevent uncertainty and create a positive corporate culture. However, for these steps to be possible at all, trust must first be built among team members, with the manager and with the company.
Measures against dismissals
- Transparent communication about company developments and decisions creates trust.
- Employee participation in decision-making strengthens trust in company management.
- Consistent actions and decisions promote trust and reliability.
- An open feedback culture enables employees to express their opinions and strengthens trust.
- Teamwork and cooperation help to strengthen trust.
- Recognition of performance and appreciation promote trust and employee loyalty.
- Clear communication and the implementation of corporate values create a common basis and promote trust in shared goals.
These measures are a good way of counteracting resignations and, above all, silent resignations, because they create trust and give employees the opportunity to openly communicate their concerns and wishes, among other things. However, not every dismissal can be avoided and in some cases this is not even desirable. The following section will therefore look at what you can do to make the best of a dismissal.
Optimal handling of terminations: Creating opportunities
Even the best preventative measures can lead to redundancies. In the best-case scenario, this is actually a good thing and can bring growth potential for both sides. Here are some concrete steps you can take to make the best of this situation:
- Efficient off- and onboarding system: Implement a structured off- and onboarding program that ensures that the transfer of knowledge is smooth. This can be achieved through the documentation of work processes, training for successors and the use of knowledge storage technologies. Engage in dialog with the person giving notice. They know the work processes and know best what needs to be done. Again, a trusting relationship is important.
- Feedback from those giving notice: Make sure you get feedback from the person giving notice. This is the only way to really understand the motives behind it and the only way you can improve.
- Dealing empathetically with remaining team members: Empathetic treatment of remaining team members is critical. Recognize their additional responsibilities and offer support through resources or training. Encourage an open dialog to discuss concerns and find solutions together.
- Show development prospects: Make it clear that a termination does not have to be a goodbye forever. Make sure that you part on good terms and offer to stay in touch with the person giving notice. It may be an option for the person giving notice to come back in a few years' time. This can bring added value for both sides.
- Transparent communication: Communicate transparently with the remaining team about the reasons for the resignation (provided you have the resigning person's consent) and how the company is responding. This promotes trust and shows that management is aware of the challenges and is taking concrete measures.
By integrating these measures, you not only create a supportive environment for the remaining team members, but also lay the foundation for positive development that can strengthen the company's success in the long term.