Retention Risks: Don't Let Your Top Talent Slip Away!

Employee turnover is a common issue in many organisations, and it can lead to significant financial costs, as well as reduced productivity and morale. According to a recent study, employee turnover rates are estimated to increase in 2023 to a predicted rate of 35.6 per cent in the UK. This means that businesses need to be proactive in identifying their retention risks and taking steps to mitigate them.

To illustrate the impact of employee turnover, let’s consider a hypothetical case study of an organisation with 100 employees. This organization identified that 21% of their employees were at risk of leaving, which translates to 21 employees. If each employee has an annual salary of £30,000, the cost of replacing each employee is estimated to be around £15,000, taking into account recruitment, training, and lost productivity costs. Therefore, the cost of replacing 21 employees would be approximately £315,000.

However, the hidden costs of turnover can be much higher. For example, the cost of losing institutional knowledge, reduced productivity from other employees who have to cover the workload of the departed employee, and decreased morale, which can lead to further turnover. Based on research, the total cost of turnover can range from 90% to 200% of the employee’s annual salary, depending on the level of the employee and the industry.

Therefore, it is critical for organisations to identify and address retention risks to minimise the impact of employee turnover. One way to do this is to conduct an online quantitative employee engagement assessment to gather feedback from employees on their satisfaction with their job, work environment, and career development opportunities. This feedback can then be used to develop retention strategies that address the specific concerns and needs of employees.

Some effective retention strategies include offering competitive compensation and benefits packages, providing opportunities for career development and advancement, creating a positive and supportive work culture, and offering flexible working arrangements. It’s also essential to communicate with employees regularly, providing feedback and recognition for their work and addressing any concerns they may have.

In conclusion, employee turnover can be costly for businesses, both in terms of direct financial costs and hidden costs. However, by identifying and addressing retention risks, organisations can retain their top talent and save significant amounts of money in the long run. So, it’s worth investing time and resources in developing effective retention strategies that keep employees happy, engaged, and motivated to stay with the organisation.