Published June 2017
It might sound obvious, but losing staff is a seriously expensive mistake to be making, especially when those employees are leaving you and heading off to work for one of your competitors. An Oxford Economics study, cited by HR Review revealed that replacing members of staff costs employers an average of around £30,000 per employee.
Whilst many companies acknowledge that their employees are their greatest asset, very few have active staff retention policies in place to reduce drop out rates. However, with £30,000 per employee at stake, we think it’s certainly worth looking at ways to increase your staff retention rates so that you can start saving your business thousands each year.
As a specialist provider of team building activities, we regularly get to work with organisations and their employees and can really see the difference between companies with highly engaged and motivated staff and those where there are clear signs of disengagement. So if you’re looking for justification to focus on improving employee engagement within your business or just curious about the costs of recruitment, then please read on:
Why high staff turnover is so costly:
How to improve staff retention rates:
The first step when developing an employee retention strategy is to look at why employees are leaving. According the Chartered Institute of Personnel and Development: “Measuring the levels and costs of employee turnover is vital in building the business case for effective recruitment and retention initiatives. These costings can be a powerful tool for winning line manager and board-level support for resourcing activities.”
Obtaining accurate data can be tricky as employees are often reluctant to be honest about their reasons for leaving as many wish to avoid conflict or may need to seek on their employer for a reference. However, Page Personal states that the most common negative reasons for leaving a job include the following, therefore looking critically at these areas is always a good place to start:
One critical way to improve retention rates is to ensure that your employees feel valued and proud of the work that they do. Linda Smith, HR Director of Unum said: “I would encourage businesses to place more emphasis on retaining talent and developing good staff to reduce the cost of staff turnover. Put simply, people stay with companies that demonstrate they value – and care for – their employees.” Our related article 'How to Motivate, Reward & Incentivise Your Staff', provides some useful examples of ways you can boost morale within your team.
If you take care of your employees, they will take care of your customers. Then your customers will be fiercely loyal and keep coming back, ensuring long-term success.Richard Branson
In summery, the true cost of a high staff turn over is much more than simply the cost of recruiting new employees, its about lost time and opportunity, skills gap and disengagement within your business. As Richard Branson says: “If you take care of your employees, they will take care of your customers. Then your customers will be fiercely loyal and keep coming back, ensuring long-term success.”
If you’d like to talk to us about employee engagement or would like help organising a team away day or event to reward, motivate or incentivise your staff, please get in touch. We’d love to help you to get the most from your team.