It costs a business an average of more than £30,000 to replace an employee – approximately £25,000 in lost productivity, £3,600 to recruit temporary workers to cover the role before the new hire starts, £750 in managerial time spent interviewing candidates, £450 in recruitment agency fees, £400 in advertising the job role, and £200 in HR time spent on admin tasks related to the hiring process.
With this in mind, the experts at RotaCloud – workforce management software for growing businesses – have shared tips to increase employee retention and reduce staff turnover for 2025.
Firstly, when looking at what impacts employee retention, these can be split into ‘push’ and ‘pull’ factors. Joel Beverley, co-founder at RotaCloud explained: “Many elements contribute to staff retention… for example, ‘push’ factors drive your employees away from your business to look for work elsewhere, whereas ‘pull’ factors are external influences that tempt an employee to apply for work elsewhere.
Examples of ‘push’ factors include:
- Poor management
- Bullying, discrimination or unfair treatment
- Lack of communication
- Small (or non-existent) pay rises
- Excessive workload or lack of work-life balance
Examples of ‘pull’ factors include:
- An offer with a higher salary or improved benefits
- The opportunity to gain skills or land a dream job
- Family obligations – spouse gets a new job, the need to move house, ageing relatives etc.
- The desire to start a new career
Beverley added: “Despite the challenges, certain ‘push’ factors are certainly within your control… By holding exit interviews and understanding the push factors contributing to an employee’s decision to leave your company, you can quickly understand the source of your turnover problems. You can even implement ‘stay interviews’ for those still in the business for some insight into areas of improvement.
“However, it is also worth noting that, for SMEs, there are other potential barriers to tackling staff turnover to keep in mind, including: the relative importance of a single staff member; lack of promotion opportunities; time and cash flow restraints; limited employee benefits; and financial uncertainty”.
By analysing its first party data* for over 4,000 accounts, RotaCloud can also reveal which demographics were most likely to quit their jobs in the last year. By comparing staffing figures from January 2024 to December 2024, the data highlights both industry-specific and locations-based trends.
2024 staff turnover rates by industry group, ordered from highest to lowest:
- Hospitality / Catering – 38.7%
- Entertainment / Leisure – 29.1%
- Retail – 25.2%
- Professional Service / Public Service – 24%
- Other – 21.3%
- Healthcare / Medical – 20.9%
- Technology / Software – 18.7%
Looking at sub-sectors, the data showed that councils and public authorities (11.3%), optical (12.2%), SaaS (12.3%), GP surgeries and primary care (13.8%), and hospitals and hospital departments (14.6%) were the most successful at keeping their staff turnover low in 2024.
James Lintern, co-founder at RotaCloud commented: “Losing 15% of your employees a year is considered a ‘healthy turnover rate’, and anything below that is a bonus. However, in industries like hospitality and retail, 25% may be a more realistic figure to aim for. Within hospitality, our data shows the highest staff turnover rate in 2024 was for those working in bars and clubs (47%). This drops to 43.2% for quick service restaurants (fast, casual), 39.1% for restaurants and cafes, 34% for catering and events, and 30% for delis and bakeries.
Lintern continued: “Whether it’s recruitment, engagement, pay, personal development or the working environment that’s letting you down, making some small changes can quickly improve retention rates”.
