Building a Stronger Team - A Focus on Employee Retention

Are You Struggling with High Turnover Rates?

Retaining employees while maintaining a healthy turnover is crucial for efficacy.

Currently, the average turnover rate in the UK is around¹ 15% - although this varies widely from industry to industry.

There is no denying that the UK labour market is undergoing significant changes. Pre-existing trends like automation and digitisation, flexible and remote employment, and the widening gap between employer demands and labour market skills have all been amplified by the pandemic. However, the most noticeable impact is the significant talent shortage businesses nationwide are currently experiencing.

With all this going on, how should businesses respond? Is retention the answer to this question?

Let's clearly understand the benefits and other aspects of retention.

Understanding The Data.

To make it more understandable, let's look into the data and see what is happening in the UK regarding retention.

• According to the Price Waterhouse Coopers (PWC)² Hopes and Fears Survey, a fifth of employees intended to leave their jobs in 2022. However, only 45% of the 2,086 UK workers surveyed said they were not likely to hunt for a new job in the upcoming year, meaning that the remaining 35% are debating whether to make a change.
  
  
• Compared to office roles, which have an employee turnover rate³ of 43.7%, hybrid and remote work structures have the lowest rates, at 36.6% and 38.7%, respectively.
  
  
• The private sector businesses in retail, catering, call centres, construction, and media have the highest turnover rates.
  
  
• Legal, accounting, education, and the public sector are fields with historically low turnover rates.
  
  
• The average business turnover rate in the UK from 2019 to 2023⁴:

Retention Rates and EVP

EVP, aka Employer Value Proposition. At its simplest, it's what you offer your employees in return for their efforts. And no, we don't mean just salary. Instead, we suggest combining what you offer your people, including salary, because whilst what you pay is a headline that gets attention, it doesn't foster long-term motivation and retention. However, there are many benefits to your business when there is a focus on retention and developing your EVP will help you get there.

The DNA of EVP is unique to each business and typically includes several offerings, including (but not limited to) financial rewards, learning and development, work environment, employee benefits, well-being, and culture.  

Your EVP strategy is so important – it's why people choose to work for (or leave) your business, hence why it's vital for improving your retention rates.

A good EVP strategy, if deployed correctly, has been proven to⁶:

• Decrease annual employee turnover by 69%
• Increase new hire commitment by nearly 30%

Benefits Of High Employee Retention Rate for Businesses

1. Lower training cost: Each year, the UK⁵ spends £42 billion on training or about £1,530 per person.  It goes without saying that when people join a business, various responsibilities necessitate various levels of training.
   
   
2. More robust business culture: Long-term employees typically have similar values and attitudes and are well-aligned with their business. When your business has many well-suited employees, they work well together. Furthermore, they support one another when they are in need. This enhances your workplace culture and draws more like-minded individuals to your business.
   
   
3. Increase revenue: The longer a person spends in a role, the more knowledge and expertise they acquire, which correlates to increased production levels and a rise in revenue. Also, long-term employees usually enjoy their jobs because otherwise, they would have left. They may therefore use their established relationships to provide excellent customer service and financial returns.
   
   
4. Stable systems and procedures: There is more time for invention when a business operates with a wonderful rhythm and efficient workflow. Those who have worked for a business for a long time and are experts at managing day-to-day operations can help others avoid making the same mistakes they did, since they are aware of what works and what doesn't.
   
   
5. Increase in employee engagement: The term "employee engagement" describes a person's emotional connection to their place of employment. Employee engagement raises happiness, motivation, and productivity. The emotional bond grows deeper the longer a person works for your business. Because of this, they become not just a highly motivated worker but also a strong team player who can inspire others.

Drawbacks Of low Employee Retention Rate

1. Financial cost: This is an understatement! As mentioned, how expensive it is to replace one employee, you are looking at thousands of dollars at the low end—the cost increases in direct proportion to the person's expanding function and duties. Tens of thousands of pounds, or even more for high-level employees, are taken away from daily operations and future investment and instead are spent so that you can keep your head above water.
    
2. Decrease in morale: Constant turnover at work = low morale. This is due to several factors. First, the remaining workers could have to assume the departed person's duties. This may result in overwork and burnout, which may increase turnover.
   
   Social connections are another element. Building relationships at work is essential for enjoyment at work and at a business. We don't get the same sense of belonging or community when we don't have these professional buddies. For example, your employee might ask, "Why to invest when I just have someone fresh sitting across from me next month (again)?"
   
   
3. Reduced Productivity and Quality: Your business will unavoidably experience continuity gaps due to turnover. Employees will leave, others will try to fill their shoes, and managers will be called away to take on new tasks or train replacements. Moreover, people's perspectives may change at that exact moment. As mentioned, low morale and a lack of job satisfaction are associated with turnover. If you aren't working at your top speed, you won't be able to do as much, and productivity will also be decreased.
   
   
4. Customer Satisfaction: Customer connections may suffer if you frequently hire new employees. It is not intended to imply that new personnel are not priceless assets for your business, but there is undoubtedly a learning curve. Some clients might not want to go on that journey with you. An employee with little experience could switch them off.

Also, if your business has a bad reputation for having trouble keeping good employees, it negatively affects how clients see you. As a result, finding and maintaining the individuals you need to advance your business becomes even more challenging.

At MBA, We Practice What We Preach

We just don't say we are big on retention. We work for it. Want to know how?

MBA has a dedicated team known as our "candidate concierge". From Offer to 3 months of service, their role is to nurture candidates and discover and resolve any issues (counter offers, cold feet, etc.) pre-hire. Post-hire, they keep in touch with candidates, gather performance feedback via our dedicated account directors and highlight any challenges from the new starter to allow the business to address them. Their role is to decrease pre-hire attrition and increase post-hire retention - the first three months are the most important and where churn occurs.

By taking care of these, we ensure that the candidate is settled within their job role, and in case they or the business feel any nervous energy, we tackle them before the small things become an issue.

Additionally, we go beyond traditional recruitment and assist with elevating our partner's EVP. We work closely with our partners to review their EVP strategy or market offerings and how they communicate that to their people and potential candidates. We use actual market data to help drive their EVP strategy forward and stay aligned with what the current candidate market wants in real-time.

What MBA suggests for employee Retention? We Go Beyond Traditional Recruitment and Help Our Partners with Their Retention Rates.

Hiring staff just to watch them leave isn't ideal. However, certain ways can positively impact the employee retention rate at your business. If you're not prioritising employee retention, you're doing it wrong.

Employers can devise initiatives that reduce turnover and increase employee retention by understanding the reasons behind employee turnover. All of which boils down to the EVP strategy.

• Encourage employees to continue to learn and grow.
• Put retention strategies in place.
• Recognise and honour excellent effort.
• Ensure a good workplace environment.
• Implement a plan for workplace health and well-being.
• Encourage open, honest communication with the employees by paying attention to them.

Planning and implementing strategies to inspire, develop, and propel employees towards effective employment within the business are necessary for successful retention.

Conclusion

Employee turnover rates affect a business's effectiveness and capacity to accomplish its strategic goals; all employers need to be aware of this. The performance of a business might be negatively impacted by high employee turnover.

The requirements of the workforce must be taken into consideration when developing strategies to increase the retention of employees and motivation. Benefits and rewards for employees may frequently exist, but they may not reflect their needs, which demotivates them. If you don't have procedures to determine why people leave, you can't increase their desire to remain.

All these look intimidating to you? Don't worry!

At MBA, taking hiring pressure and turning it into an excellent opportunity for growth is what we do. So, stop worrying about anything around recruitment and leave that to us.

End notes

• Travelperk: 20 Employee retention statistics that might surprise you
• CPD Online: What is Employee Retention?
• Business Mole: Employee turnover rates have increased by 9% since 2019
• Business Mole: Employee turnover rates have increased by 9% since 2019
• Perkbox: employee retention benefits
• Gartner: Create a strong EVP to attract and retain critical talent