Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Professional servicesHR strategyRecruitment & retentionProductivityRetention of staff

Failure to retain talent costs UK firms £42 billion, says PwC

by Daniel Thomas 6 Oct 2010
by Daniel Thomas 6 Oct 2010

Employers have been urged to do more to hold on to their best performing staff after research estimated that the failure to retain talent is costing UK businesses around £42 billion per year.

The study, by professional services firm PricewaterhouseCoopers (PwC), suggests that the cost of replacing a competent member of staff equates to approximately one year of that person’s salary, reflecting all the costs associated with lost skills and productivity, replacement and the training of a new recruit.

With annual staff resignations in the UK averaging 10.4% and the average salary around £25,000, the UK’s failure to retain talent to the level of other mature economies costs British business around £42 billion per year, or around £8 billion for every 1% increase in resignation, the report says.

The research “presents a stark warning to businesses”, according to PwC, given that almost a quarter (24%) of the 1,150 UK employees it surveyed for the report are looking or intend to look for a new job because they feel their pay is insufficient.

The PwC research follows a pan-European survey of more than 7,500 workers by consultancy Aon Consulting, which last month revealed than nearly half (47%) of the 1,000 UK respondents were planning on seeking a new job before the end of the year.

Richard Phelps, HR services partner at PwC, warned that companies “often vastly underestimate” the financial benefits of retaining existing employees.

“With many businesses eager to maintain or grow staff levels as the economy starts to recover, it is crucial they consider the full costs of losing staff through resignation,” he said. “The need is particularly pressing given that many employees who sat tight during the downturn may now be looking for new opportunities elsewhere.”

PwC argues that these costs extend far beyond any employment agency fees and “golden hello” incentives sometimes given to recruits from rival firms.

The research factors in:

  • time spent interviewing candidates, particularly if a number of senior people are involved;
  • reference checking and administration;
  • the induction process and loss of competence before the new joiner is fully up to speed;
  • revenue/productivity loss and customer disruption at the point the person leaves; and
  • the higher salaries often attached to new hires.

“Employers often resist pay rises because of the immediate cost impacts, and may resent being ‘held to ransom’ by workers threatening to leave,” said Phelps. “But losing dissatisfied staff can prove a far more costly exercise. When multiplied across a number of employees, high turnover can have a dramatic impact on a business’s bottom line.”

To keep staff loyal and prevent unnecessary departures, companies need to consider carefully how they reward and motivate staff, according to Jon Terry, head of reward at PwC.

“For many people, non-material incentives such as career development opportunities can be just as important as pay in maintaining loyalty and preventing the need to seek new opportunities elsewhere,” he said.

XpertHR has just published its latest research findings on managing employee departures. 

Avatar
Daniel Thomas

previous post
Demand for jobs hits a 12-month low
next post
Medgate Occupational Health software now available with Reed Group MDGuidelines

You may also like

Teaching profession losing staff in record numbers

9 Jun 2023

AI could boost headcount and skills, recruiter predicts

8 Jun 2023

CBI members vote to support renewal plans

6 Jun 2023

Why embracing big data is HR’s key to...

6 Jun 2023

Report recommends student loan-style scheme for pilot training

5 Jun 2023

Time-to-hire rates at an all-time high

2 Jun 2023

Leaked emails suggest RAF disadvantaged white male applicants

31 May 2023

One in five HR professionals considering changing jobs

31 May 2023

How to attract and engage older workers (webinar)

30 May 2023

Retail headcount declines at fastest rate in 14...

26 May 2023

  • The HR Bundle: Your one-stop guide to building a successful global HR Department PROMOTED | Get your hands on Deel’s free HR bundle...Read more
  • The Benefits of an Employee Assistance Programme PROMOTED | EAPs support employees in a range of ways...Read more
  • Intergenerational working and how to manage up and down the generations PROMOTED | The benefits and challenges of intergenerational workplaces...Read more
  • Bereavement in the workplace: How training can help HR get it right PROMOTED | HR professionals play an essential role...Read more
  • UK workforce mental wellbeing needs PROMOTED | The mental wellbeing support employers are providing misses the mark...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2023

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2023 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+