Without a shadow of a doubt, retention is the name of the game in 2025.

We first saw this revealed in the Talent Insight report earlier this year. When we polled employees, the highest percentage of respondents (45%) indicated that a salary increase would encourage them to stay in their current role. Additionally, 21% of respondents mentioned that a better reward and recognition programme would contribute to their retention. Other factors that would positively influence retention include an assurance of job security (18%), the introduction of a bonus structure (16%), and the opportunity for a promotion (15%).

These findings emphasise the importance of a holistic approach to employee retention, encompassing both financial and non-financial incentives to create a supportive and rewarding work environment.

But it’s not all about salary: our Talent Insights Report found other key findings which shed light on staff retention trends in the UK.

Firstly, a significant portion of employees (39%) expressed a desire for a promotion within their current organisation rather than seeking a new role elsewhere. This preference outweighed the number of employees (36%) looking to transition to a different organisation or industry.

Secondly, only 28% of employees believe their current pay adequately meets inflation demands. A substantial majority (57%) felt their pay fell short of inflation, while 15% were uncertain about its alignment. This perception aligns with the fact that over half of employees (54%) did not receive a pay raise in the past year.

Furthermore, our research revealed that recent redundancies and headcount reductions played a significant role in motivating job seekers to seek employment elsewhere, cited by 42% of respondents. Other contributing factors included dissatisfaction with their boss (40%), a lack of management responsibilities (35%), and poor company culture (31%).

These stats only underline the importance of addressing employee aspirations, and by understanding and addressing these factors, leaders like you can enhance your staff retention strategies and foster a loyal and engaged workforce. And that’s exactly why we’ve created this checklist specifically for UK business leaders in mind.

We know that as an employer, you understand that attracting and retaining talented employees is vital to the success and growth of your organisation. But in today’s competitive job market, it’s crucial to go beyond traditional recruitment efforts and focus on retaining your existing talent. By investing in employee retention strategies, you not only create loyalty and dedication but also save valuable time and resources that would otherwise be spent on recruitment and training.

Retaining talented employees is crucial for the success and growth of UK businesses. This post outlines key strategies to enhance employee retention, foster a positive work environment, and ensure long-term employee loyalty.

What is employee retention?

Employee retention refers to the strategies and practices employed by employers to retain their valuable workforce. Think about it like this – your employees are the heart and soul of your business. They bring their unique skills, experiences, and perspectives to the table, and because of that, they have a lot of value to offer. Employee retention is all about keeping your people happy and engaged, because when they feel valued, appreciated and supported, they’re more likely to stay committed to your company, work hard, and give their best effort – day in and day out.

So, how do you make this happen? Well, it’s all about creating an environment that nurtures your employees’ growth, fosters their happiness, and satisfies their needs. There are many ways you can do this, from offering competitive compensation, opportunities for growth, and a supportive work culture, to reward and recognition and even company retreats – something we love at Employment Hero.

Effective communication, recognition of achievements, and addressing employee concerns also play a vital role.

Employee retention contributes to reducing turnover costs, maintaining a positive company reputation and attracting top talent. In other words, treat your employees like the rockstars they are, and they’ll rock your business right back. Together, you’ll create a workplace where everyone thrives.

What is the impact of high employee turnover?

High employee turnover can have a significant negative impact on a business, including:

• Increased costs: Hiring and training new employees can be expensive. In addition, high turnover can lead to lost productivity, as new employees need time to get up to speed.
• Reduced morale: When employees see their colleagues leaving, it can lead to decreased morale and productivity. Employees may also feel like they are not valued or appreciated, which can lead to them leaving as well.
• Damage to reputation: A high turnover rate can damage a company’s reputation, making it more difficult to attract and retain top talent in the future.
• Loss of knowledge: When employees leave, they take their knowledge and experience with them. This can lead to decreased productivity and increased costs, as the company needs to spend time and money training new employees.
• Increased risk of accidents: High turnover can lead to increased risk of accidents, as new employees are not as familiar with the company’s procedures and safety standards.

You’re likely aware that there are costs involved to rehire but the unpacked numbers are truly mind-boggling.

The Work Institute estimates the cost of turnover at between 33% and 200% of the departing employee’s salary. It sounds like a comically large amount of money, until you break down what’s actually being lost in indirect costs.

When an employee resigns, the first hit can be having to pay out their leave entitlements. From there, you may be facing recruiter fees to find your new person. You’ll also lose productivity costs while the role is vacant. Time will also be lost from other members of the team as they participate in the hiring process. Once you’ve hired your new team member, you still aren’t ready to recoup costs; no matter how fantastic they are, they will need to go through onboarding, training, and a learning period before they’re hitting the productivity level of your former employee. There’s also a possibility that you will have to offer a higher salary to new starters in a competitive environment. Our research shows that only 21% of job seekers would be content to start a new role on their current salary, 34% are looking for at least a 10% pay increase, and 23% would need a 20% pay increase to sign on.

Is reducing turnover an urgent priority? Download our checklist now, or grab your copy of our Guide to Reducing Turnover.

Why do high-performing employees quit?

There are many reasons why high-performing employees quit their jobs. Some of the most common reasons include:

Lack of opportunity for growth and development

High-performing employees are often looking for new challenges and opportunities to learn and grow. If they feel like they are not being challenged or given the opportunity to develop their skills, they may be more likely to leave their current job.

Uncompetitive compensation and benefits

High-performing employees are often in high demand, and they know that they have options. If they are not being compensated fairly or given competitive benefits, they may be more likely to leave for a job that offers more.

Poor work-life balance

High-performing employees are often driven and ambitious. They may be willing to put in long hours and make sacrifices in their personal lives to get the job done. However, if they feel like their work-life balance is out of whack, they may be more likely to leave.

Unsupportive or toxic work environment

High-performing employees want to be part of a team that is supportive and collaborative. If they feel like they are not supported by their manager or colleagues, or if they are working in a toxic environment, they may be more likely to leave.

Personal reasons

Sometimes, high-performing employees leave their jobs for personal reasons, such as a change in family situation or a desire to relocate.

Following the pandemic, there are many reasons why you might assume people are looking to resign in higher numbers. Maybe you believe that the risks of living in such a dangerous environment have triggered people to rethink their corporate roles. Perhaps you think that working from home has made workers think about moving out of cities. Could there be a chance that the real reasons are far less philosophical than these?

Our research suggests that many more of the reasons are within employers’ reach to address.

A lack of career opportunities

There’s nothing worse than working at a company that seems to show little interest in your career development, right? Sadly, 31% of workers surveyed for our Talent Insights report cited this as the top reason for why they wanted to resign.

Businesses can be so focused on profit growth that sometimes employee development can fall to the wayside. But it should be a key consideration for any employer. While it’s understandable that you may not always have a promotion available to your team members, you should always be mindful of new opportunities for them to take on.

Lack of appreciation or recognition

This is another key motivator for resignation, as many leaders fail to realise just how important the role of recognition is in creating an engaged and loyal workforce. You want to give your team proactive feedback so that they can do their jobs better, but are you also taking the time to thank them for the great things they’re doing?

It’s an essential balancing act. Studies have shown that for every piece of criticism an employee receives, whether constructive or not, six pieces of positive reinforcement are needed to counteract it.

Bad management

Poor leadership is one of the classic reasons for employee turnover and one of the most awkward to address. Whatever industry you’re in, management is a unique skill in itself; and it’s one that not all managers are taught. Just like any other role, managers might need assistance in developing their leadership and communication skills, and should be encouraged to avoid micromanagement like the plague.

Why are employee retention strategies important?

A well-crafted employee retention strategy can work wonders, fostering a loyal and motivated workforce that propels your business forward. By prioritising employee satisfaction and engagement, you create a positive workplace culture that boosts productivity, innovation, and ultimately, your bottom line.

An effective employee retention strategy offers a range of benefits. First and foremost, it helps you retain your best performers, reducing turnover costs and the time-consuming process of hiring and training new employees. When employees feel valued and supported, they are more likely to stay with your organisation, fostering continuity and stability.

Moreover, a solid retention strategy enhances morale and job satisfaction. By implementing initiatives like professional development opportunities, flexible work arrangements, and recognition programmes, you demonstrate your commitment to your employees’ growth and well-being. This, in turn, creates a positive work environment where employees feel motivated, engaged, and excited about their roles.

Building your employee value proposition can help boost your reputation as an employer of choice, which is another advantage of a strong employee retention strategy. Satisfied employees become brand ambassadors, spreading positive word-of-mouth and attracting high-calibre talent to your organisation. In a competitive job market, this can give you a significant edge and enhance your employer brand.

Effective employee retention strategies

If you want to retain your high-performing employees, it is important to address the factors that may be causing them to leave. This may include providing opportunities for growth and development, offering competitive compensation and benefits, promoting a healthy work-life balance, creating a supportive and collaborative work environment, and being understanding of personal reasons for leaving.

Here are some additional tips for retaining high-performing employees:

• Set clear expectations: Make sure your employees know what is expected of them in terms of their work, performance, and behaviour.
• Provide regular feedback: This will help employees stay on track and make sure they are meeting expectations.
• Create opportunities for growth: This will help employees feel challenged and engaged in their work.
• Show appreciation: Make sure employees know that their work is valued and appreciated.
• Create a positive work environment: This will help employees feel happy and motivated to come to work each day.

Another thing to double down on is creating a strong culture.

But how do you know what your employees are thinking? How can you get a temperature check when you need it?

Seek employee suggestions with Employee Happiness Surveys

When it comes to employee retention, asking employees what they’d like to see from you is a seriously underrated strategy! Use an employee engagement survey to ask your remote team what they would like to see from you and if they have any concerns about your remote working culture.

Employment Hero’s Custom Surveys are a great tool to use for this; you can word questions exactly how you want to, ask specific questions to your business and allow your team to respond anonymously (always good to receive brutal honesty when it comes to retention!).

How do you retain employees who want to leave?

Retaining employees who want to leave can be challenging, but it’s not impossible. Here are a few strategies that can help increase the chances of retaining such employees:

Open communication

Initiate a conversation with the employee to understand their concerns and reasons for wanting to leave. Listen actively and empathetically, giving them a safe space to express their thoughts and feelings. By addressing their concerns and exploring potential solutions together, you might find ways to improve their employee experience and change their perspective.

Provide development opportunities

The last thing you want to hear in an exit interview is that your best team member is leaving because of a lack of career progression opportunities. Employees often seek growth and new challenges, so identify areas where their skills and interests align with your needs and offer them opportunities for professional development. This could involve additional training, cross-functional projects, or special assignments. Providing a clear path for advancement can rekindle their motivation and enthusiasm.

Make room for flexibility

Many employees value flexibility in their work arrangements. If feasible, consider offering flexible schedules, remote work options, or adjusted hours to accommodate their needs. Promoting a healthy work-life balance can improve their overall job satisfaction and make them more likely to reconsider leaving.

Recognise and contributions

It’s pretty universal that employees appreciate feeling valued and recognised for their efforts – yet many employers forget to make time in the calendar (or in all team meetings) for recognition. Implement a robust recognition programme that acknowledges their contributions, whether through verbal appreciation, team celebrations, or formal rewards. Recognising their achievements can boost morale and reinforce their sense of belonging within your business.

Stay competitive with compensation

At the end of the day, money does talk. Evaluate your compensation and benefits packages regularly to ensure they remain competitive within your industry. If feasible, consider offering additional perks or incentives to retain top talent. Competitive pay and benefits can be powerful motivators for employees to reconsider their decisions to move.

Remember, each situation is unique, and not every employee can be retained. However, by actively listening, addressing concerns, providing growth opportunities, fostering a positive work environment, and demonstrating genuine care, you can increase the likelihood of retaining employees who are considering leaving.

Download the top performer retention checklist

Retaining talent is essential for the long-term success of UK businesses. Whether you’re looking to boost retention or turn your turnover rate around – there are lots of opportunities to enhance employee retention and create an environment where employees thrive and contribute to organisational success.

When it comes to employee retention, Employment Hero is a game-changer for businesses. With its comprehensive suite of tools and features, it empowers SMEs to foster a culture of engagement, growth, and satisfaction. From streamlined communication and performance management to robust recognition programmes and goal setting (and smashing) administration, Employment Hero provides a one-stop solution for enhancing employee retention.

By leveraging the power of our platform, you can create a cohesive and motivated workforce, driving productivity, loyalty, and long-term success. Say goodbye to high turnover rates and unlock the potential of employee retention with Employment Hero.