Your staff are one of your best assets and with the right team behind you, your business will thrive. But high employee turnover can kill your company if you’re not careful, damaging morale, reducing productivity and negatively affecting your bottom line.
The recruitment process to find new staff can be lengthy and costly and the time it takes to get them up to full productivity can run into months and even years. Research puts this cost at £30,000 per employee which includes recruitment expenses and the impact of lost productivity.
Staff turnover is a fact of business life but if you’re haemorrhaging workers faster than you can replace them, then it’s time to look at the reasons employees quit. There will be those who leave for perfectly sound reasons that are nothing to do with your culture or business, but there are plenty of things you can do to slow down staff turnover considerably.
Why do employees quit their jobs?
The top five reasons that employees quit their jobs, according to our own research for the Culture Economy report, are:
To pursue a different career (30%)
If employees feel like they’re stagnating in their job and unable to progress they’re far more likely to seek out a company where they can build a career. But if you offer a great career path with plenty of opportunities for upskilling and training there’s a greater chance of them remaining loyal to you.
Make sure staff are aware of ways they can advance their careers and appraise them regularly. Consider also opening up vacancies internally before you advertise externally to see if any employees are interested in applying.
Wanting a higher salary (25%)
Salary isn’t always the biggest motivator but it often comes in the top three. If your employees think they can get a better deal elsewhere and there are no other great incentives for them to stay, then they’ll resign.
Be transparent about your pay structure from the start and incorporate regular pay reviews into your company. Make it as competitive as possible within the framework for your business and industry. If you can’t increase salaries very easily you might wish to offer other incentives as part of any employee benefits package such as childcare vouchers, free healthcare, gym member ship and so on.
What you offer will differ depending on the age of your workers and you need to be mindful of where they are in life. For example, childcare vouchers are unlikely to be particularly incentivising to a single, young 20-something but relevant to a married employee in their 30s or 40s. Again, someone who is 50+ might be more interested in pension schemes.
Not liking the company culture (34%)
According to research, poor company culture costs UK businesses £23.6 billion a year, yet a whopping 60% of SME business owners still view it as an optional extra rather than an intrinsic part of their organisation. However, company culture can have a huge impact, not only on your employer brand when it comes to recruitment but on your ability to retain staff.
If you have a great company culture which is inclusive, friendly and encouraging, people will be feel valued and want to work for you. If you have a toxic reputation your staff will suffer low morale and lower productivity leading to higher staff turnover.
Wanting a change of location (17%)
Where you base your business can have a profound impact on how easy it is to attract and retain people. For example, as a tech start-up in the UK you might choose Brighton which is fast becoming a major tech hub. You might have to compete for the best staff but not only are they in the heart of the action, they’re also in a vibrant city with a lot going for it. If you choose to set up in the middle of nowhere or in an unpopular town, you must be prepared for it to have an impact on the number of people who are willing to travel and work for you.
Think very hard about where your business is located and, depending on your industry and budget. Moving a business is obviously a huge thing to do and not suitable for everyone so if you can’t entertain that, then consider remote and flexible working or other incentives to get staff to come to you such as subsidised travel.
To take time off (9%)
We all get tired and some employees just simply want a break. If you treat them as mere numbers, then they’re more likely to take that time off permanently and resign.
However, if you can introduce a solid work life balance, allow working from home or flexible working to fit around other commitments, they’re far more likely to remain loyal.
Remember, your workers have a life outside of work too and if you can harness the power of time off or sabbaticals then they will choose to stay rather than quit.