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5 reasons why your employees are leaving

Updated 22 December 2022

4min read

Tom Conner

High staff turnover is a problem shared by many small businesses. Tom Conner of Drewberry financial advisers highlights the five factors most likely to make your staff browse the job sites.

How to deal with high staff turnover

Maybe you have no trouble getting people to come and work for you. The problem is getting them to stay. In the UK, a business that has to replace more than 10 per cent of its staff leaving each year can be considered to have a poor retention rate. According to research from XpertHR, turnovers higher than this are common in industries including the housing sector, publishing and events, education, distribution and – ironically – HR.

Low employee retention comes with more problems than just the hassle and expense of rehiring. If you keep losing staff every few years it can throw a major spanner in the works and prevent you from building momentum. This is a frequent blocker for SMEs who are struggling to grow.

In our survey of 1,000 SME employees, nearly 48% said that they were looking to move jobs in the next year. It’s clear from these findings that if small businesses want to improve retention, they need to avoid some common mistakes that affect employees’ job satisfaction. These slip-ups include:

1. Not giving encouragement

When asked ‘What is it about your job that makes you unhappy?’ 57 per cent of SME employees cited a lack of recognition for their efforts. A further 52 per cent also blamed it on a general lack of support in their role.

Giving staff feedback and recognition for their efforts and accomplishments is essential – it’s not just about the monetary rewards. Being taken for granted and getting nothing but a wall of silence can get disheartening after a while. Furthermore, without proper feedback there is no way for employees to know when they excel or when there is room for improvement.

2. Low opportunities for career development

Progression and development are very important for employee motivation. This can frequently become a problem in small businesses, where there may be little opportunity for promotions. However, even without promoting employees, there are other ways to help workers feel that they are progressing.

Training and development opportunities allow employees to learn new skills that may help them in their occupation or provide them with broader career options. You may even be able to help an employee to expand their role and make it into a more senior position, so you benefit from their advancement at the same time.

3. Not providing suitable employee benefits

Many small businesses don’t provide employee benefits because they feel that they can’t afford them.

However, there are many available benefits that come at low or zero cost to the employer. For example, flexi-time is the most in-demand employee benefit and free to implement.

‘Nearly 1 in 3 employees unhappy at work said this was the case because of a lack of employee benefits,’ reveals Nadeem Farid, Drewberry’s Head of Employee Benefits. ‘Yet one of the most popular paid-for benefits, Group Life Insurance, is actually the most affordable. Considering this, the cost of a modest benefits package may work out cheaper than the recruitment costs born of high staff turnover.’

4. Ignoring stress and mental health

Stress is a blight on the UK workforce, with some 55 per cent of UK SME workers saying that they regularly feel stressed. A lot of employers make the mistake of overlooking the warning signs of stress and mental health problems, which can lead to bigger problems later on.

Small changes like encouraging feedback, offering appropriate breaks and holidays, and providing appropriate support give employees the means of managing their stress levels, while allowing them to take a closer look at the main sources of stress. Merely knowing that such support exists can in many cases help to alleviate stress.

5. Rewarding apparent effort instead of actual results

There is a mentality among some sections of the UK workforce that ‘working harder’ is more valuable than any results you might achieve. This in turn can lead into the trap of ‘presenteeism’, where staff merely hang around the office for longer to create the impression of doing more. Employees may end up working unpaid hours, through illnesses and even during their holidays to misguidedly demonstrate their dedication.

Besides being a cause of stress, presenteeism is a symptom of it too, and has been associated with a host of other problems that could cause serious difficulties for both employers and their staff. Instead of applauding presenteeism for its own sake, you should foster an environment of efficient, effective working within normal office hours. It’s also important to encourage workers to take time off and maintain a healthy work/life balance, thus keeping stress to a minimum.

The picture isn’t all gloomy. More than 61 per cent of employees who do enjoy their job say that the main cause of their happiness is simply their colleagues. This makes it all the more beneficial to reduce the pace of staff turnover. If you have employees constantly rotating in and out of a business, it becomes difficult for colleagues to form relationships and develop close ways of working together. This, in turn, means that they may not be as happy in their job as they could be. High staff turnover can therefore be self-perpetuating, and may accelerate as people get the impression that ‘no-one stays here for long’.

There’s no single quick fix that will make your staff stay with you longer. Rather, it will be a gradual process of learning and planning, seeing what works and addressing the main problem areas within your workforce. But if you want to solve the problem, you will – and the  long-term benefits are worth the effort.

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About the author
Tom Conner
Tom Conner is Director of Drewberry Wealth Management. He has over 10 years' experience in financial services and regularly provides expert commentary in the national and industry press.