How and why employees leave could prompt others to quit: UBC study

The study was conducted by the University of British Columbia’s (UBC) Sauder School of Business, and looked at data from about one million employees from a major retailer.

Although the retailer is unspecified, the study spanned multiple stores within the organization.

“We looked at these stores as systems, and looked at the flow of employees in and out of them over time,” Sima Sajjadiani, the co-author of the study and a professor at the university, said.\

“It gave us a great opportunity to look at the immediate, short-term, and long-term effects of each exit event, and compare them over time.”

Sajjadiani says the study also took into consideration whether the workers were high or low performers at their jobs.

She says companies often layoff employees to calm shareholders’ fears when their stock value plummets, but this can have a big impact on the employees left behind.

“These layoffs are a signal to the investors that we are cutting cost, we are taking care of the situation,” she said.

She says such moves, when poorly communicated, could harm the company’s reputation, giving the perception that their employee’s loyalty is not reciprocated.

“It’s very bad news for organizations, especially if they are laying off high performers, because if those positions get eliminated, both high and low performers start quitting,” she said.

Sajjadiani says this can be a challenge for employers amid the staffing changes.

The study says when a high-performing employee is fired, it could encourage other high-performing employees to leave as well.

“It’s a signal that people’s jobs aren’t secure, and the organization doesn’t care about them, no matter how hard they work. So they think, ‘I should leave as soon as possible,” she said.

UBC adds when employees quit voluntarily, it gives a “more moderate boost to voluntary turnover.”

“To high performers, voluntary exits are a positive signal that there are better opportunities elsewhere,” Sajjadiani said. “So while employees might not leave immediately, they do begin to look for other opportunities.”

However, when workers are fired, the study suggests the impact is “relatively small” and has a “fleeting effect.”

“Usually these are people who are disruptive or abusive, or aren’t doing their fair share…When they go, high performers tend to stay longer, and the risk of voluntary turnover actually goes down,” Sajjadiani explained.

She says when staffing decisions are made, communication is key to helping keep organizations stable.

“Communicating clearly and compassionately, justifying these decisions and trying to avoid the most severe course of actions are better for organizations than simply cutting people.”