When an employee hands in their notice of resignation, it can potentially cost the businesses thousands of pounds.
In fact, according to Research by Oxford Economics and Unum, the average financial impact of losing an employee is a substantial £30,614.
Alongside costing businesses a nauseating amount of money, high staff turnover rates can also undermine productivity, impact workplace morale, drain resources, and disrupt team stability.
Where to start to reduce the risk of this happening to you?
Knowing what ‘good retention’ really looks like means identifying potential issues contributing to high turnover rates, and keeping existing employees engaged and committed.
What’s driving employee turnover?
It’s natural for individuals to consider alternative employment for many reasons, with some of the most common drivers including the pursuit of career progression, better work-life balance, and increased pay.
However, motivations aren’t one-size-fits-all and they often differ across generations, which can make responding to staff retention and turnover issues more complex.
For example, Gen Z employees tend to be more focused on prioritising a healthy work-life balance, while Millennial staff search for progression, Gen X workers value leadership and communication, and Baby Boomers tend to place greater emphasis on respect, stability, and wellbeing.
Subsequently, businesses must take a more nuanced approach to reducing staff turnover if they want to remain competitive and commercially viable.
Taking turnover with a pinch of salt
While paying attention to turnover rates is vital to ensuring the long-term, sustainable success of your business, it’s equally as important not to misinterpret patterns.
For instance, if you’re noticing that employees tend to leave after just a couple of years in your employment, this is not necessarily a red flag.
Unlike previous decades (like the mid to late 1900s) where it was considered the norm to work for a single company for an entire career, it’s more common these days to regularly alternate employers.
By working for several different companies – or even sectors – individuals can demonstrate adaptability, flexibility, and resilience.
As a consequence, the motivation for employees resigning may have more to do with their own ambitions than your business.
Similarly, during the hiring process, it’s crucial that you review a CV with the candidate to better understand why they’ve had several jobs in quick succession before jumping to any conclusions.
Failure to do so can lead to missed opportunities to hire strong candidates.
Measuring ‘good retention’
Rather than measuring how many employees stay past the three- or five-year mark, overall retention is about keeping the best people for the right amount of time.
Key indicators of healthy retention include:
- Low turnover of high performers
- Healthy internal moves and promotions
- Good engagement and wellbeing scores
- Low number of early exits (within 6-12 months)
This helps businesses to distinguish clearly between healthy employee movement and problematic turnover that requires a more strategic intervention.
A two-tier approach to tackling turnover: Identifying issues and strengthening engagement
Effectively tackling high rates of staff turnover requires a structured, two-tier approach: diagnosing the causes and then strengthening employee engagement.
Identifying turnover issues
To diagnose the cause of elevated employee turnover, businesses must:
- Analyse the data, including turnover rates, recruitment trends, exit interviews, absence records, and employee survey responses
- Assess the people experience, including the quality of induction processes, training, management capability, and workplace culture
- Use focus groups to gather deeper, qualitative insights directly from employees
- Develop and implement a strategic action plan
Strengthening engagement
Turnover can also have a primarily negative impact on staff who remain, particularly when it comes to their confidence, motivation, and productivity, which is why employee engagement is so essential.
Businesses should communicate clearly with remaining staff about higher turnover rates by:
- Openly acknowledging the impact
- Recognising any disruption
- Reprioritising and redistributing work if necessary
- Carrying out regular check-ins
- Listening to employee feedback and ideas
- Providing regular recognition to support morale
- Considering cross-training to build resilience
This comprehensive, dual approach to tackling poor staff retention aims to identify and resolve factors contributing to high turnover rates, while protecting the morale and productivity of the remaining workforce.
Struggling to keep hold of your staff? Talk to Peach Law
High turnover rates can indicate that something’s going wrong within your business.
Whether that’s rushed inductions, minimal training, or a question of workplace culture, we can help you to pinpoint the reason behind poor staff retention.
We offer a wide range of HR services to help, including clear policies and processes, employee engagement support, onboarding and induction guidance, as well as manager training and performance management support, which all help to boost staff retention and satisfaction, as well as productivity and efficiency.
From carrying out employee engagement surveys to implementing effective communication strategies and devising bespoke appraisals, we’ll work with you to keep those turnover rates low and prevent unnecessary expenditure on replacement staff.
To learn more about our HR services or to discuss your specific needs with a member of our team, contact Peach Law today.
We welcome all enquiries made:
Online: Fill in our contact form
By phone: 0161 478 3800
By email: joanne.wilson@peachlaw.co.uk
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