UK staff turnover rate reaches 34% – what this could mean for businesses
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Employee retention is a crucial factor in a company’s success. However, businesses are reporting that employees are leaving jobs at a rate of 34% per year, leaving two-thirds of the staff behind and making it so that managers have to find new people to fill their roles.
There are different reasons why people leave their jobs, and this post will explore some of the findings, as well as suggest ways that employers can encourage employees to remain in the company.
Latest trends
Household surveys have shown that the average turnover for companies in the UK is 34%. Most of these people are finding new forms of employment, with 27.4% of people who leave their jobs getting a new one. This leaves 6.6% of people who leave their jobs and the workforce entirely for at least a year, often due to lifestyle changes.
When breaking down the statistics into industries, we see that hospitality and food services jobs have a much higher turnover rate than other industries, at 40.7%. The lowest rate of turnover is in the public admin and defence sector, with only 21.1% of people leaving their jobs.
Most people remain in one job for between two and five years, and there are patterns found in different industries as well. For example, in the hospitality and food services sector, over a third of employees have retained the same job for less than a year.
Is all turnover bad?
By examining the different industries that feature a high turnover, it’s easy to see patterns emerge. The hospitality industry typically has a lot of low-paid and low-skilled roles, making it popular among demographics like students and younger people who are starting their careers. While some people remain in these jobs for longer periods of time, a higher turnover is expected. The lower specialised skill bracket also means that training new employees in these roles is less expensive and time-consuming than for more complicated roles.
Turnover also provides opportunities for new ideas to be brought into the organisation. People are one of the most valuable assets that a business has, and a significant part of this value is due to how each person has different skills, experiences, and ideas. By bringing more people in, companies can benefit from this variety.
So, turnover isn’t necessarily a bad thing in every case, especially if a company expects it for certain employees. However, as a general rule, it’s best for companies to minimise turnover as much as possible.
When turnover is problematic
While turnover isn’t necessarily a bad thing, it’s not a good pattern to get into. New businesses are especially vulnerable to employee turnover because they don’t have the funds or stability to survive employees leaving, especially if they don’t have a lot of notice.
Turnover is also more problematic in specific industries. As mentioned above, industries with a lot of unskilled and low-paid roles often have a higher turnover rate. This is because these roles are seen as starter positions, and people generally go into them with the expectation that they will move on.
But what about roles that require more skills or experience? In these cases, high turnover is much more of an issue. It’s more difficult to replace a highly skilled employee, especially if you need someone to fill a very specific niche. There’s also the consideration of training people for the role. Even with the right qualifications, managers will need to get new employees more familiar with the way things are done in their specific role and company, as procedures can change.
All of this extra time leads to lower productivity, which can have a direct impact on the bottom line. Hiring employees is expensive, and the more specific a company’s needs, the more expensive it can get.
Turnover can also cause other issues, as employees build relationships with other employees and clients. If a company has clients who are used to working with a specific person, that employee becomes much more valuable.
Replacing these employees and rebuilding the client relationships is more difficult.
Hiring employees and growth
Hiring employees is a significant expense, but there are reasons other than replacing lost staff to take on more employees. When hiring new people, companies are able to grow and take on more projects. This opens the door for further opportunities.
However, growing too quickly or hiring too many people right away can cause problems in their own right. This is called unsustainable growth, and it can lead to companies stalling in their growth or even imploding as they have grown without the infrastructure to support it.
Bloated staff numbers are a sign of unsustainable growth, because they raise costs without necessarily increasing productivity or potential profit margins.
While it’s often necessary for companies to hire more and more people, it’s important that each hire is well-thought-out.
How companies can control turnover
While companies can’t necessarily prevent turnover, people have lives and may need to leave their jobs for many reasons, they can reduce and control it.
People Insight is an employee survey service that allows companies to see what problems their employees actually face and what they think about their workplace. As well as providing a survey, this service can sort the data and make it easier to read and understand.
This is the best way to get an insight into what employees actually want. Often, people leave a workplace because it isn’t meeting their needs in some way. It could be that they don’t feel fulfilled at work, they want to be paid more for what they do, they need a more flexible workplace, or they don’t enjoy the environment at work.
Other reasons, such as major life changes, can’t be helped, so companies should focus on the things that they can change in-house. Once a business is better able to meet the needs of its employees, it is much more likely to keep them happy and in the office.