top of page
Search

Why Top Talent Leaves Top Companies: Uncovering the Hidden Reasons Behind Voluntary Turnover


Building and maintaining a strong organizational culture is a key priority for leadership. A positive work environment fosters employee loyalty, productivity, and company success. However, it is common for even the most well-established "great cultures" to experience voluntary employee turnover.


Today we will examine the research on why talented individuals choose to leave seemingly ideal workplace cultures.


Key Drivers of Turnover


A robust body of organizational studies literature has identified several common factors that may contribute to voluntary departures, even in highly regarded company cultures.


  • Unmet Career Growth Potential: Research studies have found a lack of career advancement opportunities is one of the top reasons employees resign (Gallup, 2017; Hay Group, 2011). While a good culture satisfies employees in the present, talented individuals also seek continual self-improvement and new challenges over time (Weiss & Cropanzano, 1996). For some roles, there may be limited vertical mobility within a single company (Weng & McElroy, 2012). Leaving allows employees to take on greater responsibilities elsewhere.

  • Compensation Concerns: Money itself may not be the primary motivator, but feeling underpaid relative to experience, skills, and market rates causes dissatisfaction (SHRM, 2018). Compensation structures can stagnate or demographics shift, leaving some longtime contributors perceiving discrepancies (Schawbel, 2013). Better paying positions at other firms become appealing options.

  • Burnout and Work-Life Balance Issues: Even in positive environments, intense workload pressures, long hours, and blurring of boundaries between work and personal life can contribute to burnout over the long-term (CIPD, 2019; Sinek, 2019). Maintaining a reasonable work-life integration becomes more important to employees as priorities change with life stages like starting a family (Gallup, 2016).

  • Toxic Managers and Internal Politics: While company values may emphasize collaboration, toxic individual managers create dysfunctional dynamics that undermine culture and retention (Lumley et al., 2011). Internal favoritism, political maneuvering, and lack of transparency also diminish perceived fairness and trust over time for some (Heskett, 2013).


These key factors provide the foundation for understanding why talented employees may voluntarily exit even healthy, high-performing cultures when underlying issues are not addressed. The following sections apply these research-backed concepts to specific industry examples and proposed solutions.


Addressing Unmet Growth: A Tech Company Case Study


As one example, consider a rapidly growing tech company that hadbuilt a hugely popular consumer app and vibrant company culture. However, several senior engineers voluntarily left within a 2-year period to join startup competitors or larger tech firms.


On the surface, leaving such an admired company seemed counterintuitive. However, upon exit interviews, a common theme emerged - while enjoying their work and colleagues, these individuals had reached the limits of their roles and desired new challenges. Further investigation found the company had been so focused on product development and growth that it had not systematically evaluated roles, identified career paths, or ensured opportunities for continual learning and promotion.


To address this, the company instituted the following changes:


  • Created a formal career development program with defined career tracks, competency frameworks, and individual development plans for all employees

  • Established an internal rotation program to provide 3-6 month "stretch assignments" across different teams/functions

  • Formed an advisory committee of senior individual contributors to identify new projects and leadership opportunities within existing work

  • Conducted stay interviews biannually with high performers to proactively surface concerns about growth before departure.


These initiatives successfully stemmed further attrition of top talent by demonstrating commitment to employees' lifelong career progress within the organization.


Addressing Compensation: A Healthcare Example


Compensation concerns also contributed to voluntary turnover at a large healthcare non-profit. Despite strong belief in its mission, several experienced nurses left for higher paying hospital jobs each year.


An audit found average salaries had fallen 5-10% below market rates due to multi-year wage freezes during recession budget cuts. While the org prided itself on "doing good," this unintended inequality bred quiet resentment. Those staying longest felt most financially disadvantaged versus newer hires.


To rebuild trust, leaders:


  • Benchmarked all roles against local industry pay scales to objectively quantify gaps

  • Developed a multi-year "catch up" salary adjustment plan using a blend of COLA bumps, merit increases, and one-time bonuses

  • Communicated transparently about findings, acknowledgement of past issues, and commitment to fair pay

  • Tied executive bonuses to meeting compensation plan milestones to incentivize follow through


These salary remedies, accompanied by renewed emphasis on career growth paths, successfully stemmed turnover of the organization’s veteran clinicians over the next 3 years. Competitive pay, when combined with mission alignment, reestablished loyalty.


Addressing Burnout: A Consulting Firm Example


Burnout also threatened a prestigious management consulting firm known for intense workloads and “face time” culture. While clients praised dedication, many high performers reached breaking points after exhausting stints spanning multiple late nights and weekends.


To promote sustainable careers and well-being, leaders instituted:


  • A formal work-from-home policy allowing 2 days remotely per month minimum

  • Strict limits on evening/weekend work without senior manager approval

  • Expanded paid time off from 3 to 4 weeks annually for all employees

  • Managers received coaching on delegating work, setting boundaries, and identifying overextended direct reports


Project teams also tested innovative approaches like:


  • Staggered work schedules allowing partial remote days or non-traditional hours

  • Job-sharing on certain engagements between two qualified individuals

  • 4-day workweeks on less demanding phases of projects


By prioritizing work-life balance through these flexible policies, burnout incidents declined and retention of top consultants improved significantly over the next performance review cycle.


Addressing Toxicity: A Financial Services Example


Toxic manager behavior plagued a large financial services firm, undermining its culture strengths. Multiple complaints arose about a regional director's aggressive communication style, public critiques, and playing favorites. While performance remained strong, voluntary attrition in the local office spiked above company averages.

Through confidential exit interviews, leadership discovered the root cause. However, simply terminating the problematic individual risked legal issues and further erosion of trust. A thoughtful, systemic solution was required.


They took the following multi-pronged approach:


  • Provided management training emphasizing empathy, constructive feedback, and conflict resolution

  • Released new code of conduct guidelines defining respectful leadership behaviors

  • Established an anonymous employee hotline to report any future issues confidentially

  • Rotated the disrupting manager to a new role/region to facilitate a fresh start elsewhere

  • Held office-wide diversity workshops to rebuild morale and signal commitment to an inclusive culture


This holistic response not only addressed the immediate problem manager, but fostered long-term cultural health through prevention-focused systems changes. Voluntary turnover returned to average levels within 6 months as faith in leadership was restored.


Conclusion


Even highly regarded company cultures can experience unnecessary employee attrition if underlying issues like unmet growth, compensation concerns, burnout risks, or interpersonal toxicity go unaddied. However, through a combination of proactive research, transparent communication, and tangible solutions targeted at underlying drivers, leaders can effectively stem avoidable turnover, even of top talent. With ongoing commitment to continually evaluating employee needs and feedback, well-intentioned organizations can strengthen retention long-term. Overall, these findings and examples demonstrate how addressing root causes, not just symptoms, allows great cultures to truly become employees' long-term home.


References


 

Jonathan H. Westover, PhD is Chief Academic & Learning Officer (HCI Academy); Chair/Professor, Organizational Leadership (UVU); OD Consultant (Human Capital Innovations). Read Jonathan Westover's executive profile here.



9 views

Comentarios


bottom of page