Article: Quitting begets quitting? The contagious effect of employee departures

Employee Relations

Quitting begets quitting? The contagious effect of employee departures

When an employee calls it quits, their co-workers are more likely to follow suit. What causes this ripple effect?
Quitting begets quitting? The contagious effect of employee departures

Breaking up is hard to do, yet according to a new study from the UBC Sauder School of Business, it’s not just the one who leaves who suffers. When an employee leaves their job, it can cause a ripple effect of departures among their co-workers, ultimately leading many others to call it quits.

The study evaluated employment data from a major retailer that was reportedly seeing a high number of staff departures. It looked at an estimated one million employees and their performance records to understand the possible ripple effects of each resignation or layoff.

The researchers found that when a layoff announcement is made, there is often a setback across teams, prompting voluntary departures among other workers who were spared from the job cuts.

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Retrenchment tells employees that their jobs aren’t secure and that the organisation doesn’t care about them, "no matter how hard they work," the study suggested. Many believe they should leave as soon as possible.

When workers leave voluntarily, the effect on the team is milder and takes longer to occur. Voluntary exits are generally deemed positive because they indicate there are better opportunities outside the organisation. How soon other employees leave is another story: they might begin to look for other opportunities but they won't necessarily quit right away.

But what happens when a high-performing employee is dismissed without any clear reason? This scenario can have serious consequences for employers.

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For one, employers will be asked to show justification for the dismissal. Otherwise, they risk running into a legal debacle. However, the move can also be misinterpreted as a warning to other high performers to start exploring their opportunities elsewhere.

“Communicating clearly and compassionately, justifying these decisions, and trying to avoid the most severe course of actions are better for organisations than simply cutting people,” said UBC Sauder assistant professor Sima Sajjadiani, co-author of the study.

Organisations must see the ripple effects of these employee departures and their resulting human capital costs, says Sajjadiani.

The next time you consider letting someone go, remember: “Hell hath no fury like a co-worker scorned.”

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Topics: Employee Relations

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