The Cost of Staff Turnover
Staff retention is just as crucial for organisations in the UK as globally. Losing key staff can significantly damage productivity, profits and workplace culture in an already competitive British job market. Understanding what factors impact retention and tailoring specific initiatives allows companies to better compete for talent in the UK.
The UK Retention Challenge
A recent CIPD report indicated that the UK’s median employee turnover rate was 15%. Moreover, data suggests that replacing a mid-level employee costs upwards of £30,000 when accounting for hiring temporary workers, training and lost productivity costs. As the average annual salary in the UK now tops £40,000 according to the ONS, employee replacement costs equate to up to 75% of a departed employee’s salary. Clearly organisations across the UK have an incentive to address retention.
Causes of UK Staff Turnover
Key research conducted by Reed suggests the top reasons British employees choose to resign:
1) Insufficient or stagnant pay levels – 40%
2) Limited opportunities for career progression – 34%
3) Poor relationship with co-workers or culture fit issues – 26%
Altogether salary and advancement concerns represent nearly 75% of retention issues cited by UK workers. Companies that fail to adequately recognise contributions or invest in upskilling often struggle to retain their best people according to talent surveys.
Best Practice Retention Strategies for UK Firms
Exceptional UK employers institute comprehensive engagement and development strategies for staff. Some specific initiatives adopted include:
- Apprenticeship programs tailored to business needs – Investing £4,000 per apprentice each year on average
- Formal succession planning processes – Defining career ladders with midpoints and milestone opportunities
- Flexitime work model adoption – Providing staff freedom in setting their hours for better work-life harmony
- Internal secondments – Facilitating lateral employee movement between business areas
Leading UK corporations that undertake such retention efforts enjoy voluntary turnover rates at nearly half the national average. They reap the rewards of stronger teams and continuity of experience.
Even among UK firms, employee churn remains a major risk that erodes institutional knowledge alongside profit margins. However by embracing supportive, developmental company cultures and competitive rewards programs, British employers can contain turnover substantially. Prioritising such initiatives provides one of the best returns on investment – building the capabilities that form lasting competitive advantages.
For more information contact Ballards LLP at 01905 794 504
Disclaimer. This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release. No responsibility for any loss to any person acting, or not acting, as a result of this release can be accepted by us, or any person affiliated with us.
