Do you feel like you’re struggling with staff retention in your business? You’re probably not alone. Studies from UK Money suggest that the UK has one of the highest employee turnover rates in Europe. Every year, an average of 16.8% of UK employees leave their jobs.
In this post, we’ll take a look at the average employee turnover rate by industry, so you can see how your business compares. We’ll also explore some of the causes of employee turnover, the effects it can have on your business, and some things you can do to improve staff retention.
Average Employee Turnover Rates By Industry
These figures are based on research gathered by UK Money. In each case, the figure represents the percentage of employees who leave their jobs each year.
- Hospitality – 37.6%. This is the industry with the highest turnover rate in the UK!
- Retail – 33.6%.
- Health and Social Care – 14.8%.
- Financial and Insurance – 12.8%
Meanwhile, research from PWC suggests that staff turnover in the technology sector is getting higher every year. The “total annual termination rate” was at 12% in 2020. But by 2022, it had already risen to 20%.
What Causes A High Employee Turnover?
The events of the past few years may have inflated turnover rates across the UK. Many employees clung to their jobs through the economic uncertainty that surrounded the pandemic. But once restrictions were lifted, there was a “great resignation”, as employees in every sector decided to leave their jobs to try new things.
A lot of turnover is caused by job dissatisfaction. Employees may not be happy with a number of elements of their job, including:
- working conditions
- lack of opportunities for career advancement
- work/like balance
All of the above can also act as pull factors. If a different company seems to offer better pay, a better working environment, good career opportunities and a better work/life balance, then employees may be tempted to leave their job to work elsewhere.
How Does Employee Turnover Impact Business?
Research by Oxford Economics and Unum suggests staff turnover costs businesses an average of £30,614 per employee.
This includes an average cost of £5,433 for every employee you need to replace. On top of this, you need to factor in recruitment costs. You could advertise the job yourself, but if you really want to attract the top talent in your industry, it pays to use a recruitment specialist, or to list your job on sites like Indeed and Monster.
Even after you’ve recruited a new employee, the costs will continue to add up. You’ll have to factor in the expenses associated with onboarding and training. Also, it could take weeks, or even months, for the new employee to become fully effective in their role. Your productivity will suffer for as long as it takes your new employee to learn the ropes.
Finally, a high staff turnover can have a wider impact on your whole team’s morale. Any staff that stick around will have to get used to saying goodbye to familiar faces, while getting to know a bunch of new starters. They might lose workplace friends, and they might start to think – if everyone else is leaving, why am I sticking around? In this way, staff turnover can have a snowballing effect.
How To Improve Staff Retention In Your Business
First, you need to determine just why people are leaving and use these learnings to take actions to increase staff retention.
Are there any patterns? Analyse your turnover in terms of teams, roles, demographics (such as age), and performance. Also try and gauge if resignations tend to peak at any time of year. This might indicate that working conditions become intolerable for some during the Christmas rush, for example.
In your exit interviews, be sure to ask employees why they’re leaving. Again, can you spot a pattern in the reasons they provide? Do people keep mentioning the poor management, the low pay, or the lack of advancement opportunities, for instance?
These measures will help you identify the push factors in your business that might be causing employees to resign. But you can also try and identify the pull factors through studying where your ex-employees are going. Who are your competitors? And what do they offer that you currently do not?
All of this will help you identify the actions you might need to take to improve staff retention. For example, you may find you have to improve your training and onboarding processes. You may have to conduct a pay review or introduce more learning and development opportunities to help employees get more from their roles. And if employees are struggling with a poor work/life balance, look for ways to implement more flexible working practices.
How Better Employee Benefits Can Help Improve Staff Retention
A good employee benefits package can help you stand apart from your competitors, helping you attract and retain the most talented employees in your sector. And when you offer the best benefits in the business, employees will be less likely to leave you to work for your competitors.
Employee benefits can also show employees that you care. The right benefits package can show that you value their efforts, and that you’re invested in their health, happiness, and wellbeing. Some benefits might even be seen as more valuable than a pay rise. Even if your competitors can offer a higher rate of pay, employees may still prefer to work for you if, for example, you offer a good healthcare insurance package.
At Capacity Insights, we specialise in helping employers deliver truly meaningful employee benefits packages. Whether you’re looking to build an employee benefits package from the ground up, or you wish to change or add to your current package, we’re here for you. We can tailor a benefits package scheme that truly meets your needs at a price you can afford.
Get in touch to find out how we can help you offer the best possible employee benefit package.