Employee churn is a natural process for any business. A healthy balance of employee retention and recruitment blends the best of both worlds, established capability and culture continually enriched with top talent and fresh skills. 

The average churn for UK businesses is 34% (CIPD 2024), with an average of 27.4% of workers moving to a new employer and the remaining 6.6% ceasing work altogether. But when staff turnover becomes a ‘revolving door’, excessive attrition can dent performance, damage the morale of remaining employees and lock up valuable time and budget. 

The CIPD Resourcing & Talent Planning Report (Sept 2024) shows that 38% of the UK businesses surveyed have increased their focus on retaining talent over the previous 12 months. With today’s uncertain economic outlook, the need to find, onboard and retain the best human capital has never been more important. 

Why Employee Retention Matters

Replacing staff and filling new posts is an inevitable fact of life for any business. Of the 1000 HR and people professionals surveyed in the CIPD Resourcing & Talent Planning Report (Sept 2024), over 84% said they had filled vacancies in the previous 12 months. 

However, losing experienced colleagues repeatedly and frequently can apply real pressure to fill the resulting skills gaps. If recruitment fails to keep pace with attrition, lower productivity can compromise output, product quality or customer service and become a brake on company performance. 

Costs of Replacing Key Staff

Finding, hiring and onboarding quality people to replace your former employees can come with a hefty price tag. 

Whether you choose to run the recruitment process yourself or outsource to an agency, the onboarding of new talent takes time and money. Whilst *CIPD data shows the median average cost per hire in the UK (including in-house resource time, advertising costs and agency or search fees) has reduced from £3000 (2022) to £2000 (2024) for more senior roles, averages for other employees remain closer to £1500 per role. 

The same CIPD report reveals that over half of organisations use external agencies either exclusively or alongside in-house recruitment activities. With recruitment agencies commonly charging fees equivalent to 15%-30% of each candidate’s first-year salary, replacing staff, especially those in highly paid senior roles, can come at considerable cost. 

Even when the hiring process is managed internally, companies face the hidden cost of HR and recruitment staff writing job descriptions, posting adverts, vetting applications, managing interviews and onboarding starters. Also, bringing new recruits up to speed often requires extra investment in training, development and other resources. 

Lower Productivity

The loss of highly skilled employees can result in a temporary or even sustained lapse in output. Typically, after a colleague leaves employment, it can take weeks or months to recruit a suitable replacement with equivalent skills. 

‍Research by StandOutCV of 500 UK HR and recruitment managers shows the average time to fill a vacancy in the UK is 42 days.

So-called ‘empty chair’ time can last even longer for some roles, as recruits may be asked to serve extended notice periods with their current employer before joining. Once onboarded, many new starters will need to undergo days or weeks of induction or additional training before becoming fully productive team members.  

Poor Staff Morale

A high incidence of leavers can also have a destabilising effect on co-workers. 

Falling employee retention and an increased employee turnover can make employees feel less secure about their own jobs and question their long-term commitment to their employer. 

When a team member exits the business, colleagues may be required to pick up the slack by taking on extra responsibilities or filling skill gaps. All this can damage employee morale, erode goodwill and encourage once-loyal employees to consider exploring opportunities with another employer. 

Key Causes of Employee Turnover 

A poor employee experience isn’t always the cause of staff moving on. After all, every departing employee will have a unique set of motivations for quitting, sometimes unrelated to their job and outside the employer’s control. But if you have a high employee turnover rate, take it as a warning sign that some of your people are voting with their feet because your business is a less-than-attractive place of work. Here are some of the most common reasons:

• Comparatively low salary and other compensations
• Lack of recognition or appreciation by senior people
• Poor leadership or inconsistent management
• Lack of compelling job opportunities, i.e. promotion or advancement
• Excessive work burden and stress
• Lack of training or personal development 
• Unable to balance work and life commitments
• Unpleasant or unfair company culture

Exit interviews or surveys are a good way of capturing the motivations of leavers, identifying common causes and taking corrective action to stem employee churn in the future.  

12 Proven Employee Retention Strategies

So, what can HR leaders do to encourage employee retention? Here’s a selection of 12 staff retention strategies to help you avoid the pitfalls of excessive employee churn and improve employee retention:

1. Pay Fairly and Competitively

Any worker who thinks they’re underpaid will feel undervalued and tempted to find a job elsewhere with better remuneration. In a 2024 Flexjobs* survey, 59% of 2200 workers surveyed signalled ‘low pay’ as their reason for seeking a new employer. 

Real-time salary benchmarking tools like HR DataHub enable you to cross-check, role by role, the salaries you pay with average pay rates for equivalent roles in similar companies to yours and adjusted for company size, location and industry sector. 

Understanding market pay averages allows you to offer competitive salaries without unintentionally overpaying and keep up to date with market pay trends driven by inflation, legislation and other external catalysts. 

2. Offer Flexible Working

“An estimated 4 million people have changed careers due to a lack of flexibility at work” CIPD, 2023

Employees like a workplace that promotes a good work-life balance by letting them flex their hours to suit their family commitments and private life. According to the ONS*, in the autumn of 2024, five years on from the COVID pandemic, 28% of Great Britain’s workers are still choosing to divide their hours between home and the workplace. 

While some employers are now encouraging staff back to the office full-time and the debate about work-from-home versus work-from-work productivity continues, there’s little doubt that giving your people choice about when, where and how many hours they work will help you retain your most valued employees. 

3. Create a Thriving Business Culture

“81% of workers consider corporate culture important when deciding to apply for a job.” UJJI 2025

Employees value a company culture that makes them feel safe, comfortable and appreciated, somewhere they can grow and develop their skills in a fair, inclusive working environment. And somewhere that gives them a strong sense of job security.

Every company is different, but a healthy company culture relies on a clear mission and set of values which are well communicated and consistently applied. Workplaces must embrace diversity and equality with fair and competitive compensation for all. 

Empower your people by letting them take part in decision making, listen carefully to their views and feedback and be prepared to act on their suggestions. A positive, open and thriving culture will drive loyalty and motivation among your staff and help them become ambassadors for your company.

4. Share in Your Success

Rewards linked to company performance will inspire your employees to contribute more to the success of your business, feel more connected to your strategy and see you as an attractive long-term employer. 

Bonus payments or share ownership triggered by hitting company targets as well as personal goals are ways of motivating your people, locking in loyalty and growing productivity. Shared rewards can foster a team spirit among colleagues united in a common objective and make it less likely they will look for employment elsewhere.

5. Employee Feedback

One employee retention strategy not to underestimate is asking your employees to tell you what they think about your organisation and share ideas for improvement:

• Run regular staff surveys and 1-2-1 interviews to take the pulse of your workforce and compare results over time to track progress. 

• Create initiatives like ‘Employee of the Month’ or ‘Annual Staff Awards’ for employees to vote for high-performing colleagues and shine a spotlight on excellence. 

• Provide a confidential ‘whistleblower’ hotline for workers to report incidents of malpractice or misdemeanour. 

These feedback channels ensure that employers can quickly gauge where action is necessary to step up in line with staff expectations. They also give employees agency to influence and improve their own place of work.   

6. Diversity, Equity & Inclusion

“72% of businesses in the UK believe DEI have become more important to the workforce.” Teamspirit 2024

DEI underlines the message of fair treatment for everyone in the business, with equal opportunities for all. 

It helps build a sense of belonging and trust between employee and employer, especially when metrics such as pay gaps, minority representation, promotions and attrition are tracked and shared transparently and regularly company-wide. 

Greater diversity in the workplace provides a deeper pool of skills, experience and know-how, and a richer, more inspiring company culture for all employees to engage with and enjoy. 

7. Workplace Environment

Invest in a safe, comfortable, well-equipped work environment to drive staff loyalty as well as increase your productivity and efficiency. Workers are more likely to look forward to coming to work if their workplace is clean, well-lit and properly heated and ventilated. 

Make sure that IT hardware and systems are up to the job and allow employees to do their work effectively either on your premises or when remote working. Provide office staff with spaces for downtime, catering, team huddles, more formal meetings and private discussions. 

To improve employee engagement, listen carefully to their feedback on improving their physical work environment and act on their suggestions wherever possible. 

8. Professional Development Opportunities

“94% of employees said they would stay longer at a company if it invested in their learning and development.” LinkedIn Workplace Learning Report 2025

Many employees want to grow their skills so they can stay relevant in their current role or gain promotion to a job with higher pay and greater rewards. 

So, it pays to nurture a company culture of personal development that invites employees to continuously improve for the long-term benefit of themselves and the company. 

Businesses that fail to invest sufficiently in career development opportunities risk having an under-skilled workforce more likely to exit and progress their careers with another employer.

Instead, keep your employees motivated with a wide range of relevant training content geared to their needs. Fund and support training to meet recognised industry certifications and qualifications. When required, design programmes around the needs of individual employees. 

Make training easily accessible by hosting sessions run by external training providers at your premises or offering a range of online courses to accommodate large numbers of trainees. 

9. Clear Promotion Pathways

“33% of employed adults say they are extremely or very satisfied with their opportunities for promotion at work.” Pew Research Center, 2023

Show your employees that their future is with your company by demonstrating a clear pathway for promotion with realistic conditions and timelines. 

• Get a clear understanding of the expectations of each employee. Not everyone has an ambition to climb the ladder, but those that do may have their eyes on promotion to a specific role or perhaps a job that doesn’t currently exist. 

• Help them identify what the next stage of their career path looks like and map a route to get there. Agree on milestones, success criteria and any necessary training, experience or qualifications required. 

• Use routine reviews and assessments to track progress towards the promotion and be transparent about the potential reward by benchmarking salaries for the target role using a benchmarking tool such as HR DataHub.

10. Health Benefits

“Over 70% of UK companies have provided health benefit schemes for over two years.” HR DataHub Pay Planning Survey, 2024*

Health benefits are increasingly in demand, especially as waiting lists for appointments and treatments challenge the NHS and cause frustration for patients. 

HR DataHub’s 2024 Pay Planning Survey shows that more than 70% of UK companies have provided their staff with health benefits for more than two years. 

Health and wellness offerings are universally popular among employees, and companies are well advised to offer these as a way of making employees feel valued and supported. 

As well as dental and mental health support, many companies are offering wellness benefits such as discounted or free access to a gym. Our 2024 Pay Planning Survey shows that over 50% of the companies surveyed have offered gym memberships to their staff for over two years. 

11. Mentorship Programmes

Facilitating knowledge transfer from more seasoned employees to junior or less experienced employees is a good way of passing on tried and tested company-specific practices and know-how, as well as keeping employees engaged. 

It also improves staff retention by strengthening bonds between employees and enabling loyal, long-serving employees to act as role models and internal brand ambassadors for newer staff members. 

Also, some mentors will derive extra job satisfaction from tutoring their colleagues and be motivated to stay in employment for longer.    

12. Strong Onboarding Experience

First impressions count. So, when a new starter joins your business, ensure their experience is as positive as possible by creating an onboarding process. Induct them in your company's purpose, values, mission and culture, introduce them to their team managers and co-workers and equip them with the tools they need to do their jobs productively. 

Give them plenty of information about your company story, diversity and inclusion policies and the go-to stakeholders within the business. Show them opportunities for training and personal development and how they can enjoy ‘softer’ employee benefits such as social activities or participation in charity events. 

Give them a voice in your company by introducing feedback initiatives such as employee committees, staff surveys, ‘ask-me-anything’ channels and regular check-ins with their Line Manager. 

An on-brand, well-rounded and informative employee experience on day one, followed up in the initial months, helps to forge a closer bond and encourage ongoing loyalty and retention.

How to Measure the Success of Workforce Retention Strategies 

Are your efforts to retain staff working? Here is a selection of metrics to help you track and measure employee retention over time:

• Overall Employee Retention Rate: This measures the proportion of employees who stay with an organisation compared to the total average headcount over a set period. Poor retention rates clearly signal to HR leaders that retention strategies may no longer be effective.

• Overall Employee Turnover Rate: This metric indicates the percentage of employees who have left a business versus the total workforce over a specific time frame. This encompasses all leavers, including bad leavers and redundancies. A reducing turnover rate is a sign your employee retention strategies are working.

• Voluntary Employee Retention Rate: This is the proportion of people who have left the business on their own terms versus the total average number of employees over a given period. Expressed as the number of voluntary leavers divided by the average total workforce, this metric captures employees who decide to move on for reasons of their own (e.g. to find a job elsewhere or return to education).

• Involuntary Employee Retention Rate: This measures the number of employees let go by the company as a percentage of the total average workforce for a given period. This includes all people whose employment has been terminated by the company.

• New Starter Retention Rate: High churn from new employees (e.g. leavers with less than one year of service) can have an especially expensive impact on recruitment costs. To calculate your new starter retention, divide the number of staff who leave within a given period of employment (e.g. their first 12 months) by the total number of leavers over the same period.

• Average Employee Tenure: The average length of employment is another indicator of retention performance over time and is calculated by adding together the number of years of service for all employees and dividing the total by the number of employees in the company.

• Employee Satisfaction: HR interviews or employee pulse surveys can be an early warning that employees are feeling unhappy and intend to leave the business. These can uncover individual cases of negativity or expose wider dissatisfaction trends and give employers an opportunity to intervene and increase employee satisfaction, giving them a reason to stay.

Boost Employee Retention with HR DataHub

HR DataHub helps you retain top talent and attract new employees by giving you powerful real-time salary insights in just a few clicks. By collecting pay data from over 30 million UK job postings, HR DataHub brings you live pay benchmarks for any role in any UK location. It provides the insights and confidence you need to make fair, well-informed pay decisions, from setting individual salaries to managing companywide pay strategies tuned to the fast-changing pay marketplace. 

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