Why High-Potential Employees Leave

The Great Resignation didn’t begin without a reason—and employers can’t only blame the COVID-19 pandemic for it. But even though employees overwhelmingly wanted remote work options, giving those opportunities hasn’t actually retained high-potential (HIPO) employees (or any for that matter).

According to Microsoft, “over 40 percent of the global workforce consider[ed] leaving their employer” in 2021. Why? Because the principles for retaining HIPO employees are the same no matter if they work in an office or elsewhere, and it’s not just about giving them more money. 

In this article, we’ll dig into why employees choose to leave and what to do if a high-performing employee resigns. Then we’ll discuss how to engage top employees, so they choose to stay.

Why Do High-Potential Employees Leave?

It’s easy to assume employees leave because they feel overworked and underpaid. However, this assumption is only partially true. There’s a lot more to the picture than hours worked and salary earned. So let’s examine these two assumptions, and then we’ll discuss a few more global workforce trends that will help answer why high-potential employees leave.

Employees Feel Overworked

SHRM reported in December 2020 that, of the employees who made the work-from-home transition during the pandemic:

• 45% regularly worked more hours during the week than before
• 70% had to work on the weekends 

Microsoft’s 2021 survey confirms these findings, with:

• 54% of global survey respondents feel overworked
• 39% feel exhausted
• 20% “say their employer doesn’t care about their work-life balance

Why is this overwork happening now more than before? For starters, meetings. The average meeting time is now 10 minutes longer than it used to be. Even worse is that 62 percent of meetings and calls are unscheduled or ad hoc. 

Another reason is chats. Microsoft found that “the average Teams user [was] sending 45 percent more chats per week and 42 percent more per person after hours.” Despite thiss increase in work communications, 50 percent of people still responded in under five minutes. 

Employees Are Underpaid

On the surface, it seems employee pay is keeping up with current trends. Despite the pandemic, Pew Research Center reports, “wage growth held firm for most U.S. workers.” 

Dig deeper, though, and a different reality becomes clear. For example:

• Lower-wage workers experienced steeper job losses, which stabilized the average wage when it would otherwise have lowered.
• The U.S. annual inflation rate in October 2021 hit 6.2 percent, the highest in over 30 years, but employers may not have matched this with wage increases.
• The median weekly earnings for women are still only 83.3% of the earnings of White men. 
• For Black men, it’s only 71.7% of White men’s earnings.

The World of Work Is Changing

As significant as these findings are in answering why employees choose to leave, other disruptions in the world of work are also contributing to high-potential employees leaving to seek greener pastures:

• HIPO talent is needed all over the world. With remote work options, many more job opportunities are available to those who seek a shift in roles or a change to a company that better fulfills their professional and personal goals. 
• Close team interactions have diminished, which means many workers, including HIPO employees, feel more isolated at work. They want more engaging professional relationships (as well as social) and try to find them elsewhere.
• There is often a disparity between the strict hours and expectations HIPO employees have to meet and what they see company leaders enjoying—namely, greater work flexibility, higher salaries, and a general air of superiority. Employees don’t like the unfairness (real or perceived) and quit as a way to push back against the culture.  

What to Do When a High-Performing Employee Resigns

When a high-performing employee resigns, there’s more to do than simply wish them luck and send them on their way. This is a time for gathering feedback, analyzing data, and building a long-term relationship. Without that information and commitment, employers can’t expect to slow the churn of resignation. 

Create a Better Offboarding Plan

Management experts in Harvard Business Review say that “the lack of attention to the exit process is a mistake. …The way that management treats exiting employees sends a clear message about whether the organization lives up to its espoused commitments and values.” 

They recommend organizations think of offboarding as less like severing a work relationship and more like graduating. Companies need to assist in the employment transition and help set departing employees up for future success, which we’ll discuss more in the next section.

Here are a few tips to follow when creating an offboarding plan that gives as much benefit to employers as it does exiting employees:

1. Build and maintain trust throughout the entire process, including during the exit interview.
2. Meet all legal and compliance obligations. 
3. Align the process with company goals and HR objectives.
4. Let data drive any change.
5. Take a strategic, systematic approach.
6. Be thoughtful, dedicated, and flexible.
7. Move forward with what was learned.

Just remember, not all employees have the same departing needs nor the desire to continue engagement. Employment departures can be very personal, emotional events. It’s essential to have HR handle every case with the utmost discretion to accommodate varying needs.

Continue the Relationship

One big mistake employers make is to cut all ties with a HIPO employee who leaves. Chances are, however, that you’re missing out on a continued networking relationship that can benefit both parties later on. 

Additionally, boomerang employees (alumni rehires) are on the rise as a strategic source of talent. In the latest PeoplePath annual report, well over half of companies report that up to five percent of their new hires are boomerang employees.

Here are a few tips for maintaining a good relationship with HIPO talent:

• Keep alumni data up to date, including contact info and current employer and job positions.
• Stay in touch quarterly via an HR-integrated corporate alumni program that creates a community of departed HIPO talent.
• Offer to act as a reference, and when they do use you, be sure to check in with them to let them know you’ve spoken to their prospective employer—and to see if they might be willing to come back.

How to Engage HIPO Employees

The good news is that employers can do things to retain their HIPO employees—engage them. You’ve heard a lot lately about the importance of employee engagement, for good reason. Millennials and Gen Zers thrive on it. Since they are the future company leaders, preparing high-potential employees for senior roles is a must.

Here’s how to engage HIPO employees at work:

1. Develop an employee retention strategy to identify areas where you can improve working conditions and influence positive change.
2. Be transparent with information by providing access to insightful data, like overall company performance or the company’s employee satisfaction survey results. This gives high-potential employees confidence that you’re listening and a sense that their involvement matters.
3. Give a line-of-sight to corporate strategy. HIPOs need to find their purpose by knowing how their jobs fit into the company’s success.
4. Set up mentorships, and grant access to senior executives. This can embed employees into their company.
5. Provide greater responsibility, professional development, and advancement opportunities. Driven, ambitious employees want to move up the ladder and need to be given the chance to prove themselves.
6. Show appreciation and recognition both personally and publicly. It’s always nice to have your hard work acknowledged.
7. Help them find their own career path. HIPO employees are more committed when they know where they’re headed and how.