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According to statistics from Monster, the average UK staff turnover rate is 15%. However, this number tends to vary between industries. If your employee turnover is significantly higher than this figure, it’s worth investigating the causes of employee turnover in your organisation.
The average cost of employee turnover in the UK is £11,000 per person. This figure is calculated by considering:
- Recruitment costs.
- Loss of productivity.
- Advertising costs.
- Cost of equipment (desk equipment, passes, uniforms, badges, keys, etc.)
- Agency fees.
In some instances, high staff turnover can be a good thing. Many businesses operate systematic renewal programmes designed to stimulate regular staff turnover via terminations and promotions. These processes help to ensure there is a stable environment of motivation and opportunity for all employees.
If your business has a high staff turnover rate, it could also be an indication that there are underlying issues that need addressing within the organisation. It’s worth looking into the reasons behind your employee turnover levels, as high retention of staff should be a top priority.
Most employees want their managers to help them to grow their careers. If there are no opportunities for growth and promotion, they’ll seek out other jobs that can help their careers advance.
Two in five workers could leave their workplaces in the next six to 12 months, with the majority citing lack of available career prospects, a 2022 CPID People Management survey has found. As it stands, lack of career opportunities is the main reason people leave their jobs, with low rates of pay a close second.
In this five-minute guide, we’ll discuss the leading causes of employee turnover in detail. We’ll reveal some of the tell-tale signs that an employee is ready to quit. And, we’ll provide some key strategies to improve employee turnover within your business or organisation.
What are the leading causes of employee turnover?
High employee turnover can eat into profits and cause ongoing stress for managers and employees. It costs a great deal of time and money and can ruin the morale of a team. Additionally, your business’s reputation could be tarnished if people consider the company to be a bad place to work.
Employee turnover is expected in the modern workplace. People reach retirement age, decide to relocate, or leave to pursue an education. However, you must monitor employee turnover levels and gain insight into why employees are leaving your organisation, especially if you want to avoid any negative repercussions.
Below, we’ll discuss some of the leading causes of employee turnover.
Lack of growth and progression
An essential aspect of employee retention is providing opportunities for the growth and development of all staff. If your workers feel like there is no progression available, they will likely start looking at new opportunities in different organisations. Therefore, it makes sense to offer your team other opportunities to increase their income and develop their careers.
Lack of recognition and feedback
If you fail to offer feedback, you run the risk of pushing employees away. People want to know what aspects of their job they excel at, and what areas they can look to improve. Feedback is a way to help employees succeed, and recognition is the first step towards motivating people for their achievements.
If a member of your team is struggling, providing honest feedback could help them to gain focus and manage their workload more efficiently. Failing to give feedback, or providing non-constructive feedback, can demotivate employees and help to shape their decision to look for work elsewhere.
In recession periods and times of economic downturn, it’s normal to ask staff to pick up some extra responsibilities. Sometimes it makes sense to let individual staff go and have the remaining employees take on extra work over evenings and weekends.
However, workers should never feel pressured into choosing between personal commitments and work responsibilities. This type of pressure can demotivate people and make them seek opportunities within organisations that respect the importance of work-life balance.
Sometimes it’s difficult for a manager to delegate tasks without wanting to oversee every aspect of a project or process. However, when you micromanage people, you leave little room for their professional development and decision-making.
Employees who feel overmanaged and stifled will almost certainly get frustrated by the lack of freedom available, which will contribute to higher turnover rates in your business. Rather than incessantly micromanaging, place trust in your employees’ ability to perform. By trusting your team, enthusiasm and motivation levels will rise, helping to keep employee retention levels high.
Treating team members differently
Favouritism is one of the leading causes of conflict in the workplace. Although it can be difficult for managers to hide their appreciation of employees that go the extra mile, blatant favouritism can divide teams and departments.
For example, if you decide to give a high performing employee more flexibility with their working hours and schedule, this type of inequality is likely to cause friction throughout the workplace. Unconscious bias can manifest itself in a variety of ways; favouritism being one of them. Managers must recognise these behaviours before their actions border on discrimination.
Bad employee selection
It’s a complicated process when you’re searching for the right employee to match your current staff and company culture. That said, no matter how desperate you are to fill a position, if you employ someone bad for the company, the entire business could suffer as a consequence.
People cannot function at their best in a professional environment if they feel intimidated, incompatible, or discontented amongst their peers. Additionally, incompatible employees will recognise that they don’t fit in and will quickly become restless in their new position.
Toxic company culture
There is a strong correlation between employee happiness and workplace culture. When your team love your company’s culture, they tend to be more productive and happier. However, when they dislike the company culture, their behaviour can lean towards becoming unproductive and demotivated.
Workplace culture can impact everything from employee happiness to employee engagement. New research from Bupa UK has identified the biggest negative habits harming employee satisfaction, with employees turning to Google for advice on coping with a negative working environment. Google searches for ‘workplace culture’ have increased 30% since April 2021. A company’s working environment can have a huge impact on employee wellbeing, job satisfaction and engagement. There are lots of factors than can influence a negative workplace culture, from lack of communication, a tense atmosphere, poor management and a lack of work-life balance. This can lead to higher staff turnover levels and impact your ability to attract and retain the best talent.
What are the signs that your employees are ready to quit?
Now that we’ve discussed the leading reasons for an increase in employee turnover, let’s look at some signs that may indicate an employee is preparing to leave:
Employee productivity almost always correlates with how engaged they are in their work. The less engaged they are, the less productive they will become. If you notice a sharp decline in employee productivity, it could be a sign that they are planning to quit in the not so distant future.
Completing the minimum amount of work
Procrastination and achieving the bare minimum to get by can be a sign that an employee is bored with their position and seeks a new role. However, these behaviours can also indicate personal problems or professional issues that need resolving. It’s worth having a conversation if you notice a sudden change in productivity with a given employee.
Less of a team player
Team players are always willing to get stuck into a new project or help out other members of staff. They enjoy solving problems and are often very flexible in their professional endeavours. At the other end of the spectrum, employees who are lazy and withdrawn can raise some suspicions. If your employee is becoming less and less of a team player, they could be looking to quit their position soon.
Unwilling to commit to long-term deadlines
When members of your team commit to projects with long-term deadlines, you know they plan to stay with the company. However, if your staff are hesitant to accept long-term projects, it’s a clear indication that they don’t intend to stay with the company much longer.
Uninterested in building relationships with managerial staff
The majority of employees seek a strong relationship with their manager – whether this is on a personal or professional level. Developing these mutually respectful relationships takes continuous effort from both parties. If you notice a lack of interest in an employee, or a member of staff making less of an effort to maintain a relationship, they may be planning to leave.
Strategies to reduce employee turnover
There are several strategies that you can employ to boost employee retention rates and reduce employee turnover. These include:
Hiring the correct people
One of the best methods to boost employee retention is to ensure that you hire the right staff for your business in the first place. Make sure that you define all roles clearly when you list job postings. Also, spend some time making sure that potential candidates are fit for the role, and will fit in with the company culture as a whole.
Managing performance and capability
Any issues with demotivated or disruptive staff need to be addressed immediately before they impact the rest of the team. You should follow the Acas conduct and capability procedures to ensure that the issue is dealt with in line with UK employment laws.
Respect current industry benefits and compensation
Make sure that your staff are paid fairly for the work that they undertake, and that their salary and benefits are in line with the economic norm. If you are paying less than your competitors, you can’t blame staff for jumping ship. Although this seems like obvious advice, many companies raise expectations without offering benefits and professional development for their team.
Encourage gratitude and generosity
Encourage acts of gratitude and generosity within your company culture. These acts can help employees feel happier, healthier, and less likely to leave their position. This could include decreased gym memberships for staff, team-building getaways, or excellent lieu-time arrangements. When you encourage good behaviours that are commendable, your staff can feel a personal sense of achievement and ownership within the company.
Recognise and reward employees
Make your employees feel appreciated and valued by recognising their efforts and successes. Create tangible rewards that are announced socially. In return, you should be rewarded with strong team culture and a sense of loyalty throughout the business.
In today’s society, employees want a flexible work-life balance. This has a direct impact on employee retention levels. In 2022, around 4.3 million employees in the United Kingdom had employment contracts that allowed for flexible working hours, making it the most common flexible working practice in that year. In 2021, research found that nearly half of employees said they would consider leaving their job after the pandemic if their employer did not offer flexible working. As more and more businesses provide flexible working hours and work-from-home options, you must ensure that you follow suit. Otherwise, your staff may leave you for a more flexible working arrangement.
Make employee happiness a priority
Employee happiness is a primary indicator of job satisfaction. If you invest in the happiness of your staff, retention, engagement and productivity levels will increase. Creating a happy and robust company culture should be paramount on your list of things to do to improve business.
Provide opportunities for growth and development
Employees place massive value on opportunities to develop their careers and grow. If you fail to provide adequate development opportunities for staff, why should they remain loyal to your business? However, if you create opportunity and celebrate individual growth, you’ll build a strong workforce that wants to grow with the company.
Roll out regular performance reviews
People want to know how they are performing and in what ways they can improve. By undertaking regular performance reviews and providing honest feedback, staff can continuously improve. Not only that, they will be given a chance to learn their strengths while working on their weaknesses.
If your business has high employee turnover, you need to start making changes that will encourage your staff to stick around and help the company grow. A starting point may be conducting regular feedback sessions with your staff.
By using regular surveys, you can evaluate honest feedback in real time. This means that you can identify and eliminate problems faster, improving team morale and boosting motivation as staff know that their concerns are taken seriously.
Preventing turnover starts with listening to your staff. It’s one thing to understand why your staff decide to leave, but so is understanding the reasons that they stay. When you have conversations with both of these groups, you can identify common threads. Only then will you be able to implement changes that will increase employee retention and help your business to thrive.