Dear Maddy: Why Do I Keep Losing My Employees to Other Companies


Text "Why do I keep losing my Employees" with cartoon guy hand on head, AUI logo


Every company wants to keep its best talent. But it is easier said than done. In a job market where there are countless opportunities for a skilled employee, every benefit to the employee matters. In the United States alone, voluntary employee turnover costs around $617 billion annually. This does not include the involuntary layoff and terminations for businesses ( No one wants to lose their employees, the cost continues to rise for replacing top talent.

According to a report from Recruiter, hiring non-executive employees in 2021 cost companies an average of $4,425 per hire. That is an increase from 2019 of around $300 per employee. The costs to hire executive-level employee was more, with an average of $14,936 per employee. These prohibitive costs can kill any small business.

The retention of great employees is the goal of every business. Small businesses often feel more of a strain when they lose a great asset to their company. Often, business owners do not believe that they can afford to offer competitive health insurance benefits for new hires.

The good news, this is exactly where AUI shines. We work with small businesses to offer competitive benefits for their employees, so they do not keep losing talent to the “other guys.”

Here are the most common reasons employees leave small businesses:

Inadequate Compensation

One of the most important things you can do as a manager is to pay your employees competitively. Employees that feel they are not compensated for their skills, will seek employment elsewhere.

If you have employees that have been with your company for a longer period, you need to make sure that their compensation is adjusted to account for it. Loyal employees become jaded because new hires can often make similar or even more money than tendered employees. Insult to injury, new hires often do not have the skills that a tendered employee may have. This is due to wage compression.

Adding to wage pressures is inflation. In the past year, the consumer price index (CPI) rose 8.5 since March 2021. The largest one-year increase in inflation rates since 1981 (Bureau of Labor Statistics.)

Businesses should review salaries with each employee often. Having open lines of communication with your team is vital. Discussions about money are often the hardest to have. An open forum to discuss wages can help identify concerns about compensation. It is important to identify the concern before employees start looking at the “other guys.”

Lack of Competitive Benefits

Benefits are another way you can show employees you appreciate them. Not having competitive benefits is a huge reason employees leave. Employers often offer 401Ks or even stock options for long-term employees. Companies can offer health insurance or life insurance policies for full-time employees. those who stay on board for five years or more.

Whatever benefits you offer, it is important that you communicate them clearly and honestly.

This sounds like a boilerplate answer, but many small businesses do not think that they can afford to offer benefits. That simply is not the case. As a health insurance broker, AUI can help small business owners look at all their options for employee benefits that fit a variety of budgets. AUI can even help you create voluntary benefit programs at zero cost to you as the employer.

No Flexible Hours or Remote Work

There is no doubt that many job seekers want more flexibility in their work lives. This includes not having set hours and being able to work from home when needed (or desired).

Think about the rise in fuel prices in the USA. As fuel prices rise, the cost of everything continues to go up with it. The national average for a gallon of gas hit all-time records. Rising fuel prices are a problem for most Americans. A commute to work five days a week can often equate to hours of labor to cover the cost of commuting to work. If you want to track the current fuel price trends, bookmark this page AAA.

Finding ways to be flexible is becoming the industry standard for even the smallest business. COVID allowed workers to be productive from anywhere in many industries. Workers may prefer a more flexible working environment. Leading to what is known as the “great resignation.”

Do you need help planning and navigating remote or flexible working conditions? Please reach out to our sister company Clarity HR for support.

Limited Opportunities for Growth

Employees want to have an opportunity to gain experience and develop professionally. Often within a small business, the impression is that there is little room to move up the ladder. That is often far from the truth. Developing strong relationships with your team is important to businesses of any size. Giving employees training and opportunities for personal growth improve employee retention.

Mentorship and training opportunities for every employee to expand their skills should be a goal for every company. In what ways can you help develop their talents? What programs do you offer for continued education within your industry?

“One of the benefits you have with a small business and the talk of advancement is projected growth. I used the idea of: ‘Yes, you may be the only salesperson now, but at some point we want you to manage a team. A small business usually is a team that bands together to accomplish a goal, keeping it in that team atmosphere is a great way to improve retention. Your core employees should be rewarded when the company grows by being put into managerial positions.” – Bill Fish, President,

Another reason your company might be losing employees is no opportunities for career advancement. No matter the size of your company, it is important to share and develop your talent. Need more ideas? Clarity HR can help.

Lack of Bonuses and Incentives for Meeting Company Goals

Employees want to feel like they are part of something bigger than themselves. When there is no motivation to meet company goals, employees start to feel drained. It is important to offer bonuses and incentives for meeting company goals. These bonuses offer something tangible for their efforts (and serve as an excellent recruiting tool.

It is human nature to want to feel valued in your position. Today, it is often the lack of driving good employees to leave a position. One way to combat this is to offer formal and informal recognition programs.

Here are 5 examples of how small businesses are rewarding employees:

  • Recognition for sales goals
  • Publicly thank for employee contributions
  • Bonuses based on company growth
  • Employee of the month
  • Increased company matches for benefits

Not all rewards have to be monetary in nature. The best way to gauge what would motivate your team is to ask them. Employee feedback is a vital part of company culture.

Conclusion on Employee Retention

Employees need more than a job today. Employees need to feel valued and inspired. Building a winning workforce by keeping your top talent, comes down to creating an appealing work culture.

Associated Underwriters Insurance is one big piece of that puzzle for small business benefits. We collaborate with our clients to help identify and implement employee benefits programs for you. We offer great options for small business insurance, life insurance, and other employee benefits. We enable you to attract and maintain top talent.

Not every solution works for every small business but finding the right solutions for yours matters. No matter your size. Have questions? Contact us today.

We do more than cover small businesses and individuals with the right insurance policies and benefit plans – what motivates our team is helping you save more so you can invest more in your team, family, and goals.

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