When a competent member of staff decides to leave an employer, how much does it cost to replace them? According to research by PwC, the answer equates to approximately a year of that person's salary when all the costs associated with lost skills and productivity, cost of replacement and training of new recruits are taken into account.
Extrapolate that figure to the UK economy, where annual staff resignations average 10.4% and the average salary is around £25,000, and the UK's failure to retain talent appears to be costing British business around £42 billion per annum, or around £8 billion for every 1% increase in resignation rates (assuming a 31 million working population).
PwC also found that almost a quarter (24%) of UK employees say they are looking or intend to look for a new job because they feel their pay is insufficient - a task that will be made easier as the economy emerges from recession.
As PwC go on to point out, many - if not most - employers resent being 'held to ransom' by workers threatening to leave. But losing dissatisfied staff can prove a far more costly exercise than giving them a pay rise - and when multiplied across a number of employees, high turnover can have a dramatic impact on a business' bottom line.
That's particularly true of the retail sector, whose retention rates are notoriously low - ranging from 20 to 100% annually - a huge cost despite lower wage levels.
The message to employers is simple. Consider the full costs of losing staff through resignation and think more carefully how to reward and motivate people.
