7 Reasons Why Employees Leave During a Digital Transformation

Written By: Kyler Cheatham
Date: August 18, 2022

Digital transformations are often associated with a high level of stress for everyone involved. Employees may feel like they are constantly being asked to learn new things, while also dealing with the pressure of meeting new targets. Stakeholders may be worried about the impact of change on their jobs, or the potential for project failure.

High levels of stress can lead to employee turnover, which can in turn cause digital transformation projects to fail. In fact, according to a study by Microsoft, 60% of digital transformations fail due to employee turnover.

It is therefore crucial for organizations to manage the stress associated with digital transformation, to increase the chances of success. This can be done through training and support for employees, clear communication with all stakeholders, and careful planning.

Understanding Main Sources of Stress

Digital transformations can be extremely disruptive to an organization, its employees, and other key stakeholders. The process of transitioning from one way of doing things to another can be difficult, confusing, and stressful. Let's break down a few of the top sources of unrest that we commonly observe as a red flag for potential failure or delay.

1. Complexity and Change

Digital transformations are often large, complex undertakings that can be stressful for everyone involved. The changes they bring can be disruptive to normal operations and upend long-standing ways of doing things. This can lead to frustration and conflict, both within organizations and between them and their employees or other key stakeholders.

Many people may feel like they are being left behind during a digital transformation. As new technologies and processes are adopted, some employees may feel like they are not being allowed to learn and grow with the organization. This can lead to feelings of resentment and a desire to leave the organization.

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2. Unclear Roles and Responsibilities

Another common source of stress during digital transformations is unclear roles and responsibilities. With so much change happening, it can be difficult to know who is responsible for what. This can lead to confusion and conflict, as everyone tries to figure out what they should be doing.

It is important for organizations to clearly communicate the roles and responsibilities of everyone involved in a digital transformation. This will help ensure that everyone knows what they need to do

3. Misalignment of Project Goals and Objectives

Lack of clarity about the goals and objectives of the transformation can also lead to stress. Employees may feel like they are being asked to do things without knowing why, or how it will benefit the organization. This can lead to a feeling of devaluation and a desire to leave the organization.

Project benefits and goals may be clear at the executive level but often do not trickle down to the full organization. Executive leaders need to ensure that everyone involved in a digital transformation understands the goals and objectives of the project. This can be achieved through clear, consistent, and transparent. communication.

4. Uncertainty About the Future

The unknown of the future can be scary, especially during times of change. Fundamentally, a people's job or livelihood, or how they provide for their families is arguably the most vulnerable aspect of life. The five basic human needs for survival are food, water, clothing, sleep, and shelter - which are often achieved through income. Rational or not, if they feel as though their ability to feed and clothe themselves and loved ones are at risk, panic sets in.

One of the main reasons employees resist change or leave if they feel their job is at risk is because of the uncertainty it brings. Change can be disruptive and confusing, and it can be difficult to know what the future holds. This can lead to feelings of anxiety and insecurity, which can make it hard for employees to do their jobs.

Organizations need to provide support and clear communication of any changes or new technologies to employees during digital transformations. This will help ensure that people feel confident and capable in their roles. It is also important to communicate clearly with all stakeholders so that everyone understands the changes that are happening and why they are happening.

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5. Slow Pace or Lack of Progress

One of the most frustrating things about digital transformations is the pace of change. It can often feel like things are moving too slowly, or that there is not enough progress being made. This can lead to frustration and a feeling of being stuck.

Leadership may have cultural buy-in at the software selection phase, however, implementations can be a long, winding road. Leadership needs to provide updates on the transformation regularly so that everyone knows what is happening and how it is progressing. Celebrate and promote small wins consistently to keep engagement high.

Additionally, setting realistic expectations about the pace of change will help manage people's expectations and avoid frustration. Be transparent with the project teams and organization regarding timelines and potential risks. This openness not only creates trust in leadership but also will help everyone stay focused and motivated.

6. Feeling Skills and Experience are No Longer Valued

Many digital transformations require employees to learn new skills or use different tools than they are used to. This can be difficult and time-consuming, and it can make people feel like their existing skills and experience are no longer valued.

The concept of tribal knowledge is the collective experience and expertise of an organization's employees. It includes the skills, processes, and procedures that are passed down from one generation to the next. This type of knowledge is often unspoken and undocumented, but it is essential to the success of an organization and is a power source of value for the employees.

The last thing the organization wants is for these textured or skilled employees to exit the business. However, removing or changing this value can be extremely uncomfortable for this type of employee, who often help establish or build the organization.

It is important to have a plan in place for how these stakeholders will learn new skills and how their existing skills will be used in the new digital work environment. Engaging and recognizing their abilities throughout the transformation will soften the transition and will help employees feel valued and confident in their abilities.

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7. Dissatisfaction with Leadership or Management

One of the main reasons people resist change or leave an organization is because they are dissatisfied with leadership or management. This can be for a variety of reasons, such as feeling like their voices are not being heard or feeling like decisions are being made without their input.

It is important for leaders to engage employees in the digital transformation process and to get feedback from them about their experiences and concerns. Leaders also need to be transparent about decisions that are being made and why they are being made. This will help build trust and confidence in the leadership team.

Organizations going through digital transformations also need to have a clear plan for how they will manage change. This plan should include who will be responsible for making decisions, how those decisions will be made, and how employees will be kept informed about the process.

Crafting a clear, evolving employee engagement strategy will help reduce frustration and dissatisfaction. Trust is measured through attrition. Bottomline, if an employee does not trust that the leadership values their work, they will eventually leave or become toxic to the business.

Final Thoughts: Employee Retention Can be Achieved

Digital transformation can be a stressful time for organizations and their employees. However, by understanding the main sources of stress for employees and having a plan to address them, organizations can help reduce the negative effects of digital transformation and improve employee retention.

Creating a positive work environment, being transparent about decisions and changes, and engaging employees in the process are all key factors in reducing stress and ensuring a successful digital transformation.

If you have any feedback or questions regarding digital transformation resourcing or creating a culture of digital transformation, please feel free to reach out to me directly and we can chat informally. I also highly recommend downloading our newly release 2023 Digital Transformation Report. This 60-page report is packed full of project best practices and case studies of successful transformations.

Kyler Cheatham
Kyler Cheatham is a digital artist and innovator who is always thinking of new ways to improve the world around her. As the Global Marketing Director at Third Stage Consulting, she uses her creativity and tech-savvyness to help businesses reach their target audiences. Kyler is also a thought leader in the digital marketing space, and she loves sharing her knowledge with others. She is also a mother of two young children, which has given her a unique perspective on balancing work and family life.
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