HR: Employees are leaving jobs. CFO: Do we have data on why they’re leaving? HR: Yes. 70% of our turnover is tied to unmet needs like growth, recognition, and flexibility. CEO: But how much does it actually cost us when they leave? HR: Each lost employee costs 1.5x their salary to replace, not to mention the productivity gap. CEO: We need to reduce spending. We can't spend on engagement programs. CFO: What’s the impact of these engagement programs on retention? HR: Programs focused on growth and recognition have reduced turnover by 25%, saving us $3M annually. CEO: Are there other benefits to meeting employee needs? HR: Absolutely. Employees who feel valued are 30% more productive and report higher satisfaction. CFO: What about profitability? CHRO: Engaged teams generate 21% higher profitability. It’s not just about keeping them. It’s about keeping them productive and motivated. CEO: So cutting back on programs that meet employee needs could cost us more? CFO: The data shows there’s a significant financial impact. HR: Meeting employee needs isn’t just an expense. It’s an investment in retention, productivity, and profit. The lesson? Employees quit when their needs go unmet, whether it’s for growth, recognition, or flexibility. Invest in your employees.
This conversation for me highlights a critical issue. Executives and companies often know why employees leave but struggle to act on it effectively. Investing in employees isn’t just a feel-good initiative; it directly impacts retention, productivity, and profitability. That said, an HR department that focuses solely on protecting the company rather than supporting employees doesn’t help either. If HR isn’t advocating for real change, they become part of the problem. Another challenge? Executives who aren’t aligned when leadership sees each other as competitors rather than collaborators, employee engagement takes a backseat to internal power struggles. Until leadership aligns around a shared goal of valuing employees, meaningful change will be hard to achieve. The companies that get this right will be the ones that thrive.
I couldn’t agree more ☝🏻 Treating employee engagement as an ‘expense’ is like skipping maintenance on a high-performance engine—sure, you save in the short term, but you pay the price in breakdowns. Investing in growth, recognition, and flexibility isn’t a luxury; it’s the fuel that drives retention, productivity, and profitability. Smart companies know that when you take care of your people, they take care of your business.
You could say the same at a government level. If the EU spent on engaging (communication) with its constituents, it could have avoided Brexit and brought about more unity. If the US federal government spent more on explaining what its programs do and who benefits ( and which ones are underfunded and understaffed) then they wouldn't be in this situation today where people with no knowledge are cutting and causing irreparable damage. It all stated decades ago with 1% or 2% savings on communication and engagement every year, because it was 'unnecessary'. Now the price to pay is growing
The number of 'C Suite' "leaders" here that are getting defensive around their position (title) and deflecting back to frontline or other managers is alarming. I'd bet that these business are struggling with culture/engagement. Accountability is the overarching issue. When the leaders at the top don't own the issues within the business there is less chance that they are leaning in to support or resolve the issues. The data above is easily researched and can be applied to almost all businesses with similar or even greater numbers. If you are questioning other leaders in the business you must first question if you have provided the right leadership, coaching and support. Or at the very least, networks to support them. If they leaders are the issue, then resolve it! Be accountable, its your job! - these are the basics...
Great post, Warren Wang. Totally agree. When CFOs start treating retention as a financial risk, it stops being just HR’s problem and becomes everyone’s priority. One thing I’ve seen work well is linking attrition to operational KPIs. It gets people thinking differently and pushes action where it matters.
This is an ongoing issue for the past 15+ years in corporate America, but it seems no one is " listening". I believe until there is a " day in the life of an employee" that all Upper Management has to mandatorily complete to get their stock shates/ bonuses, things are not going to change. Unfortunatly corporate management is vastly disconnected to its middle and front line worker teams to understand where the dissatisfaction is and whats needed to rectify it.
Looking for my next career challenge
5moCouldnt agree more with this. It's substantially less costly to maintain and meet your employees needs instead of spending more on hiring new talent (which is a gamble on it's own). When you have a good employee, it's in the employers best interest to ensure they have growth potential, are paid well (within their respective paybands) and have the flexibility to excel at their role!