Definition
The strategies, policies, and practices used by employers to keep valuable employees and reduce voluntary turnover. Effective retention addresses the key drivers of why people stay or leave, including pay, career development, management quality, work-life balance, and company culture.
UK Context
The CIPD's annual Resourcing and Talent Planning survey tracks UK turnover rates, which typically average 15% across all sectors. The cost of replacing an employee is estimated at 6 to 9 months' salary when considering recruitment, onboarding, training, and lost productivity. Post-pandemic, UK retention challenges have been amplified by remote working expectations and cost-of-living pressures.
Best Practices
- Conduct stay interviews with high performers to understand what keeps them and what might cause them to leave
- Offer competitive total reward packages including non-financial benefits such as flexibility, development, and recognition
- Analyse turnover data by department, role, tenure, and demographic to identify and address specific retention risks
Frequently Asked Questions
What is a good staff retention rate?
This varies by industry, but UK average voluntary turnover is around 10-15% per year. A retention rate of 85-90% is generally considered good. However, some turnover is healthy as it brings in fresh ideas and skills. The key is retaining your best performers.
What are the main reasons employees leave?
CIPD research consistently identifies the top reasons as lack of career development, poor management relationships, insufficient pay, limited work-life balance, and lack of recognition. Understanding the specific reasons in your organisation through exit interviews and engagement surveys is essential.