California is home to some of the most economically powerful and successful companies in the world. From Disney to Google to Apple, there’s no shortage of beacons for both workers and businesses to look to as a blueprint in the state. That said, many of these companies and industries are demanding, competitive ecosystems to work in.
These and other factors can frequently lead to a high turnover rate for companies. When you also consider that California has a diverse economy and entrepreneurial spirit infused throughout it, there’s also no shortage of other options for workers. In looking at these options, it’s important to understand the causes of employee turnover and what companies can do to retain them.
What Leads To Employee Turnover in California?
Turnover, or employees leaving their position, is an issue throughout California. There are various factors that can lead to employee turnover, and many of these factors are similar to those found in other states. Some of the most common factors that may contribute to high employee turnover rates include the following:
- High cost of living – California is known for having a high cost of living, particularly in cities such as San Francisco and Los Angeles. Employees may leave if they cannot afford to live in these areas, or if they feel they are not being compensated fairly for the high cost of living.
- Competition – California is home to many tech and startup companies, which can create a highly competitive job market. Employees may leave for better opportunities elsewhere.
- Traffic and commuting – Traffic and long commutes can be a major source of stress for employees in California, particularly in areas with heavy traffic such as Los Angeles and the Bay Area.
- Work-life balance – With the emphasis on work in many California industries, employees may feel that they do not have enough time to balance work and personal life.
- Housing and transportation costs – California’s housing and transportation costs can be a major burden for employees, particularly those who live far from their workplace.
- Lack of diversity and inclusion – California is known for its diverse population, but some companies may struggle with diversity and inclusion in the workplace. Employees may leave if they do not feel included or valued.
- Changes in leadership or company direction – When a company experiences changes in leadership or shifts in company direction, it can lead to uncertainty and instability which may cause employees to leave.
Obviously, not every company in California struggles with turnover. That said, many of these factors are present in every company in the state, which means that it can eventually lead to employees leaving. As a result, companies should take steps to understand these factors and how they play into their turnover rate.
Companies With the Highest Turnover Rates in California
There are generally two elements to a company’s turnover rate:
- Number of employees
- Total workforce population
Data from the Bureau of Labor Statistics showed that California had around 1.25 million job openings in December 2022, compared to 589,000 separations in the same time period. The term “separations” is used to refer to all instances of employees leaving a company’s payroll during a specific reference month. The various types of separations are categorized and reported, including quits, layoffs and discharges, and other types of separations. This data is useful in analyzing workforce dynamics and identifying reasons for employee turnover.
As it relates to specific companies in California, certain industries have a higher turnover rate than normal, which also happens to be some of the more prominent industries in the state. According to a LinkedIn survey, the following industries had the highest turnover rates nationwide in 2022:
- Professional services – 13.4%
- Technology and media – 12.9%
- Entertainment – 11.8%
- Accommodation – 11.8%
- Retail – 11.4%
Specifically, the following companies have a higher-than-average reported turnover rate. This is based on the number of workers compared to the overall size and scope of each business:
- Uber
- Lyft
- Tesla
- Amazon
- Walmart
How Can California Companies Reduce Turnover Rates?
Employee turnover is always going to be an issue for certain companies, especially those that employ a huge number of workers in demanding and fast-paced environments. That said, there are also strategies that California companies can take to reduce their turnover rates:
- Offer competitive compensation and benefits – One of the most significant reasons employees leave a company is due to compensation and benefits. Offering a competitive salary and benefits package can help keep employees happy and loyal to the company.
- Provide opportunities for growth and development – Employees want to feel like they are growing and advancing in their careers. Providing opportunities for training, mentorship, and career advancement can help employees feel fulfilled and committed to the company.
- Create a positive company culture – A positive company culture can help foster a sense of community and belonging among employees. This can be achieved by promoting work-life balance, providing opportunities for social interaction, and recognizing and rewarding employees for their hard work.
- Communicate effectively with employees – Regular communication with employees can help them feel valued and connected to the company. This can be achieved by holding regular team meetings, providing feedback, and soliciting employee feedback.
- Improve the hiring process – Improving the hiring process can help ensure that new hires are a good fit for the company and the position. This can be achieved by clearly defining job requirements, conducting thorough interviews, and checking references.
Overall, retaining employees requires a concerted effort on the part of the company. While most employees go to work to make ends meet, they also want to be treated fairly and given opportunities to grow and develop. By implementing these strategies, California companies can reduce turnover rates and create a more stable and committed workforce.
Free Consultations For California Workers
At Maison Law, we understand how hard you work to provide for your family. Unfortunately, some companies view you and other workers as expendable and don’t give you what you need to remain happy and productive. Usually, this leads to high rates of employee turnover. Other times, this treatment can rise to the level of illegal. If this has happened to you, our team of experienced California employment lawyers can help. We’ll explain your legal rights and options, and won’t stop until you get the benefits and support you deserve. Contact us today to schedule a free, no-obligation consultation to learn more.
