How to reduce staff turnover

March 25, 2020

Staff leave to earn more money, don’t they?

Or should we believe the saying: “People don’t quit a job, they quit a boss.”

There is truth in both of these statements. Salary is a key driver and no one will stay around if they are being bullied or mistreated by their manager. But there are many other factors that influence staff retention.

Unsurprisingly, big businesses expend a lot of energy analysing how they can reduce staff turnover and keep their best employees.

Why do people leave businesses?

Facebook published its findings in the Harvard Business Review.

“We crunched our survey data to predict who would stay or leave in the next six months, and in the process we learned something interesting about those who eventually stayed.

“They found their work enjoyable 31% more often, used their strengths 33% more often, and expressed 37% more confidence that they were gaining the skills and experiences they need to develop their careers.”

McDonalds in the UK also surveyed its staff and discovered that:

“A social workplace topped their priorities (58%), closely followed by the flexibility to work hours that suit them (52%).

“The ability to develop new skills, such as team work and communications skills, is a key factor for choosing a job at McDonald’s for over half (51%). 44% value the opportunity for career progression at McDonald’s.”

The results confirm a simple truth. People expect more than a decent salary in their career. They want to enjoy their work, gain and utilise skills, have flexibility and have opportunities to grow.

What is the impact of high staff turnover?

Losing key members of staff can have a significant negative impact on a business.

In simple financial terms, the CIPD suggests that the major costs are:

•  Administration of the resignation

•  Recruitment and selection costs

•  Covering the post during the period in which there is a vacancy

• Induction training for the new employee

Studies suggest that every time a business replaces a salaried employee, it costs on average six to nine months’ salary. It is estimated that replacing an employee costs SMEs around £12,000.

This is just the direct financial cost. There are other implications, which are harder to calculate.

Your employees know your company. They know your customers and your systems. You can train new staff, but the knowledge base is difficult to replace quickly. There is also the issue of motivation amongst the staff who stay. High staff turnover can create a toxic atmosphere.

How to retain staff

There are many ways you can prevent staff churn.

  1. Employee Engagement

A comprehensive survey in 2017 found that highly engaged business units have 24% lower staff turnover. That’s a staggering statistic.

The survey stressed that: “Good management and leadership are by far the strongest drivers of how engaged people are.”

The underlying reasons people really leave can be quite surprising. The following whitepaper goes into more detail on why your staff really leave, and how improving engagement helps them to stay: Download free on the WeThrive website.

1. Professional Development

The American educator Steve Hawter, vice president of learning and development at The Learning Experience, states that:

“Training fills in a gap, but development looks to the future and growth of the company and employee.

“Businesses must:

•   Offer continual development.

•   Allow staffers to determine the pace of their enrichment, giving them control over their educational path.”

Staff will stay around if the business invests in them as people.

2. Employee Recognition

A Gallup Workplace survey found that employees who do not feel adequately recognised are twice as likely to say they’ll quit in the next year. The authors concluded that recognition might be one of the greatest missed opportunities for leaders and managers.

Recognition not only boosts individual employee engagement, but it has also been found to increase productivity and loyalty to the company, leading to higher retention.

Showing appreciation of someone’s work, praise and a simple thank you go a long way.

Interestingly, the Gallup survey dug a bit deeper and asked exactly who employees want to be appreciated by.

The data revealed the most memorable recognition comes from an employee’s manager (28%), followed by a high-level leader or CEO (24%), the manager’s manager (12%), a customer (10%) and peers (9%).

Nearly one quarter said the most memorable recognition comes from a high-level leader or CEO. Employees will remember personal feedback from the CEO – in fact acknowledgment from a CEO can be a career highlight!

3. Recognising Generational Differences

The typical workplace will have members of distinct generations and each have their own characteristics. These generations are:

Generation Z – born 1997 onwards

Millennials – born between 1981 and 1997

Generation X – born between 1964 and 1981

Baby Boomers – born between 1946 and 1964

Much has been written about the variance in values and aspirations of different generations. While it is crucial to acknowledge generational characteristics, the key is to find common ground among the team and to avoid stereotyping.

A 2019 Harvard Business Review study warned against making assumptions. In a laboratory experiment, computer training was delivered blindly, but the trainers could quite easily make assumptions about the age of the trainee. When trainers believed that they were teaching an older person, they had lower expectations and provided worse training than when they believed they were teaching a young person. Poorer training was a direct result of age stereotypes.

Researchers found that an ongoing and open dialogue with employees ensured greater happiness, productivity and engagement.


Low staff turnover has huge benefits for a business, both financially and in terms of morale.

A holistic approach is the solution. Employees will stay if they are appreciated, respected, properly remunerated, involved, feel safe and have a potential to grow.

In other words, look after your staff and they will look after your business.

About the author

Andrew Heath is CEO and co-founder of WeThrive, an employee engagement platform created and run by a small team of entrepreneurs, psychologists and professionals. The WeThrive team is committed to creating better employee experiences in the workplace because life is too short to feel unhappy at work!

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