The Challenge of Staff Retention
Brief summary:
Whilst some turnover is clearly inevitable, staff turnover is expensive, both in direct cost to the business, but also in costs more difficult to quantify, such as lower productivity, or a loss of organisational memory. Big contributors to turnover are a lack of development opportunities, a poor work-life balance, and a toxic work environment.
Here at VMC, we’re all about simple, tangible advice, based on our extensive experience. With that in mind, here are the 3 biggest contributors to staff turnover, and how you can combat them to improve your retention. Staff turnover isn’t something to be taken lightly - many estimates put it at around 60% of the employees salary in recruitment and training costs, time lost and lower productivity, for each employee you have to replace.
1. Lack of development opportunities
Last year, a LinkedIn survey found that 57% of employees would leave their job for better career growth opportunities. Similarly, a 2023 Gallup report highlighted that 41% of employees feel they don't have opportunities to learn and grow in their current role. This leads to a feeling of stagnation, and less optimism about the future, with dramatic effects,
Clear career paths and opportunities for promotion are important, but they’re far from the only thing which can provide development opportunities for staff. Consider offering mentorship programs, other training courses delivered one-to-many, and open them up to everyone regardless of how directly related they are to their role.
The best companies give employees control of their own training budget, with an amount allocated to each person each year, and spend time at every opportunity ensuring that they are setting goals together about how they will progress, ensuring managers take an active and genuine interest in the progression of their staff, and ensure they allow sufficient time for them to take part in other training and development.
2. Poor work-life balance
A 2023 Microsoft Work Trend Index report revealed that 41% of employees globally feel overworked and under-compensated. A 2022 study by the Society for Human Resource Management found that 65% of employees who quit cite work-life balance concerns as a factor.
Unrealistic workloads, inflexible schedules, and lack of respect for personal time can lead to burnout, stress, and dissatisfaction, ultimately pushing employees towards jobs offering better balance. Companies promoting flexible work arrangements, encouraging breaks, and valuing personal time generally improve retention.
In our experience, the main contributory factor here is to give employees as much freedom and flexibility to manage their time as you possibly can. The ideal position is absolute clarity on outcomes, with employees generally left to achieve those outcomes in the way that suits them. This means forgetting about time management and whether someone is in the office or working from home, and remaining focused solely on clear, tangible outcomes. This isn’t possible in every single role, but in our view, it should be the default position.
3. A toxic environment
A 2022 report by the Harvard Business Review found that 58% of employees have experienced incivility at work, and 1 in 5 say it has caused them to consider leaving their job. A 2021 study by the University of California, Irvine, revealed that 80% of employees who leave cite a bad manager as a key reason.
This can create a hostile and stressful work environment, leading to disengagement and ultimately, turnover. Fostering a culture of inclusivity, respect, and open communication, alongside effective leadership training for managers, are crucial to prevent such an environment.
In practice, we think this means setting clear values and behaviours expected of all staff. What do those behaviours mean in practice for us as an organisation? And it means being relentless about holding one another to account for them. If you’ve agreed a set of behaviours, everyone has a responsibility to uphold them, and any deviance from that should be tackled early, to avoid escalation.
Are you experiencing high turnover, struggling to attract new staff, or in need of a workforce plan?