Staff retention & turnover prevention – What you need to know!

Turnover levels are of grave concern to nearly any UK enterprise.  Overall, the turnover levels of businesses vary largely by industry and organisation as well as region, but the average turnover for all of the UK is about 17.3%.  Private sector organizations experienced the highest turnover over over 20%, with the highest being in call centres, retailing, catering, hotels and leisure.  Fortunately, turnover is on a declining trend in the UK, but this also means that enterprises must continue to find ways to retain staff to remain competitive in the marketplace. 

Some employee turnover is positive.  A company that is too conservative in staff retention will become uncompetitive because some employees cost more to retain than to terminate.  For example, keeping poor performers in order to avoid the cost of hiring and training a new employee will typically cause morale problems as well as discourage good performance in other workers.  A chronic lack of workplace discipline can easily follow.  When a poor performer is removed and a productive employee is hired, the new employee can typically save or earn the company money that was lost to their unproductive predecessor.  Further, a certain amount of ‘new blood is helpful in bringing in new ideas, keeping current with the industry, and encouraging a competitive and productive environment. 

Unfortunately, a large amount of turnover is unproductive.  When an employee leaves the company, there are many immediate and ongoing costs.  First, there may be administrative costs directly involved with the resignation itself, such as organizational changes, administrative tasks such as ceasing salary and benefits, and so on. 

To hire a new employee typically will add recruitment costs to advertise the position, as well as selection costs in reviewing and interviewing applicants.  There may be costs related to covering the position while staff is being hired, such as through overtime or hiring a temporary worker.  Finally, there is the cost of training the new employee.  Due to all of these factors, it can take months or even years for the new employee to become profitable for the company.

To prevent such costs, staff retention efforts are mandatory.  One must focus not just on retaining staff, but specifically on retaining the best performers.  While a workplace party may marginally improve morale overall, it may be more cost effective to target staff retention funds at the best employees through a compensation program that offers commissions, bonuses, or awards to productive employees.  Further, it is important to create an atmosphere of open communication with employees to help find the causes of turnover. 

In a large enterprise, an anonymous survey can be done to ask employees if they are considering resignation and, if so, what factors are involved with their thoughts of leaving the company.  Through this pool of data, trends can be established and the enterprise can target the specific issues that employees are struggling with. For example, employees may be leaving due to lack of flexibility in their work schedule, and creating options such as job sharing may drastically reduce turnover.  Only through careful examination of the enterprise can staff retention efforts be effective.

Richard Reid is the founder of Pinnacle Proactive, Specialising in theEmployee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit



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