Not only do executives not realize the real reasons employees give for leaving, they underestimate how much it costs the company. (Photo: Shutterstock)

Employee retention is a major issue, particularly in these days of a tight job market. And it's not helped by employers not realizing employees' true reasons for heading off in search of greener pastures.

According to data from Convergys and human capital management company Paycor, more than 50 percent of leaders at small and mid-sized companies think the reason employees hare off in search of greener pastures is that they're not happy with their compensation. The next two reasons cited by company execs are poor performance and a poor match of the employee to the job.

Related: Bad bosses, PTO and other reasons employees quit their jobs

However, when the employees themselves are asked, they say poor management is the top reason—in fact, accounting for 75 percent of voluntary turnover. And that's not all, although reasons do vary by generation: 50 percent of millennials say burnout is the reason to quit, while only 35 percent of boomers cite burnout. Lack of recognition is right up there, too, which is something a company could fix relatively easily.

Not only do executives not realize the real reasons employees give for leaving, they underestimate how much it costs the company; 43 percent of companies don't even track the costs to recruit, hire and bring new staff on board. According to the Society for Human Resource Management, the report says, the national average cost to hire in 2017 was $4,425, with 42 percent of SMBs reporting costs in excess of $5,000.

But employees stay only an average of 8 years, and the average annual turnover rate is 18 percent—meaning that companies are spending a lot of money on a constant recruiting process. Not tracking these expenditures mean that companies don't have a good handle on how much it costs them not to know workers' reasons for leaving or trying to resolve those reasons.

With just half of companies tracking turnover, and voluntary versus involuntary turnover the top factor tracked among those who do follow such statistics, there's plenty of room for improvement. Considering the savings potential, not to mention the advantage of being able to keep good employees longer, the report points out that greater attention to such factors can make a big difference.

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