Train people well enough so they can leave, treat them well enough so they don’t want to.

– Richard Branson, Founder of Virgin Group

Succession planning and employee retention is one of the greatest difficulties companies face today. This challenge of finding and retaining talented staff is partly due to a growing trend in “job-hopping,” where individuals rapidly transition between roles and organizations. In Canada, the average young professional now switches jobs every 2.7 years.[1] As a result, talent is easier to find, but much more difficult to retain.

Career-long job consistency may be a changing norm, but companies are not powerless in establishing long-term commitment among their employees. Job hopping has revealed several powerful motivating factors that organizations can harness to keep valuable members a part of their team. In this article we’ll take a look at those factors, starting with what makes employees leave, what makes them stay, and how a robust succession planning process is the key to bridging that gap.

What Makes an Employee Leave a Company?

Employees leave companies for a variety of reasons, but the underlying sentiment is that they’ve found or been offered something better somewhere else. It’s the same reason why citizens leave countries, partners leave relationships, or players switch teams. The drive to do better is a deeply ingrained part of human nature. It was recognized at the pinnacle of Maslow’s Hierarchy of Needs (self-actualization),[2]  and it is a core aspect of the Japanese industrial philosophy of continuous improvement (kaizen).

Factors That Affect an Employee’s Choice to Leave an Organization

In terms of job hopping, employees may perceive opportunities for self-actualization and continuous improvement in the following forms:

  1. Promotion and/or pay-raise
  2. Competitive benefits
  3. Superior networking opportunities
  4. Gaining new experience (across industries, departments, roles, etc.)
  5. Opportunities for growth and development
  6. Better alignment with corporate culture
  7. Other individual job preference (industry, location, etc.)

Apart from catering to individual job preferences, organizations can increase how attractive they are by offering these opportunities to their employees. By understanding the factors that force employees to leave, companies can turn training and benefits into an encouragement for employees to stay.

Note: Other reasons why employees may choose to leave an organization include misfit with the company, a toxic relationship with a leader or coworkers, or a lack of fulfillment in their role. If your company is dealing with mass turnover, take a look at these fundamental elements of corporate culture and management before addressing the development opportunities and benefits you provide for your staff.

What Makes an Employee Stay With a Company?

Decades ago, Harvard Business Review (HBR) did an in-depth analysis of why employees stay with their employers, and they summarized their findings using a term borrowed from physics: “inertia.”[3] The pattern observed was that employees tend to remain with a company until some force causes them to leave. From a managerial perspective, inertia is a good thing. We want employees to stay with our organization, but we want them to stay for the right reasons.  So, what is inertia and how do we increase it?

Factors of Inertia That Effect Employee Retention

HBR described two facets of inertia; job satisfaction and company environment. An employee’s inertia increases as job satisfaction increases, and degree of compatibility between work ethic and corporate culture improves. Consequently, companies should try to keep their employees comfortable with their environment and satisfied with their job. Additionally, research suggests that one of the most effective ways to boost job satisfaction is by establishing a proper succession planning process.[4]

Succession Planning, Job Satisfaction, and Employee Retention

Two of the most important elements of job satisfaction are that employees feel challenged by their work and that they see potential for the future. More specifically, 34% of employees are committed to their company because they see an opportunity to be a part of its growth.4 These figures suggest that employee retention is heavily impacted by managerial and strategic plans, and the point where these two processes intersect lies in the succession planning process.

Studies show that having a succession planning process significantly improves staff job satisfaction, which in turn has a positive effect on employee retention.[5] The reason for this relationship is that companies who plan for succession proactively indicate their willingness to invest in their employees. Creating and communicating a succession plan also advertises internal opportunities for advancement. Therefore, when employees perceive the potential for promotion, pay raise, competitive benefits, networking, developing skills or gaining experience inside an organization, they will be far less likely to look for and accept alternatives elsewhere.

A few quick tips to maximize employee retention during the succession planning process:

  1. Be transparent. Communicate the succession plan and succession planning process to all members of the company.
  2. Involve everyone. The board of directors, senior executives, upper management, and succession candidates should all be informed of the succession plan, notified of their role in the process, and given the opportunity to ask questions as needed.
  3. Invest in development. In addition to explicit succession plans, take time to establish a culture of ongoing coaching and development.
  4. Ask questions. Check in with your leaders and ask them whether they are satisfied with their job and work environment. Ask them where they would like to see themselves in five or ten years. Finally, have your leaders check in with their subordinates too. Taking time to talk to your employees like this is perhaps the simplest way to ensure they feel valued and see potential for their career with the company going forward.

Ready to Get Started?

If you’d like to learn more about succession planning and how SIGMA can help, take a look at our succession planning services, or contact us below. We have over 50 years of experience helping organizations across North America develop their people potential and we would be happy to help you build your internal talent pool – and keep it too!


[1] Columbia College. (September 16, 2019). How Often do People Change Careers in Canada? Columbia College. Retrieved from https://www.columbia.ab.ca/often-people-change-careers-canada/.

[2] Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 50(4), 370–396. https://doi.org/10.1037/h0054346.

[3] Flowers, V.S.& Hughes, C.L. (July 1973). Why Employees Stay. Retrieved from https://hbr.org/1973/07/why-employees-stay.

[4] K. Zanfardino. (2020). How Your Succession Plan Can Improve Your Retention and Company Culture. Insperity. Retrieved from https://www.insperity.com/blog/how-your-succession-plan-can-improve-your-retention-and-company-culture/.

[5] Maragia, Samuel. (2013). Effects of Succession Planning Programs on Staff Retention. Mediterranean Journal of Social Sciences.. 4. 157 – 162. 10.5901/mjss.2013.v4n6p157.