NOVEMBER 2025 - How to increase staff retention and why it matters
High staff turnover is costly in time, energy and money. Every time someone leaves a job, the cost of recruiting for their position is estimated at a third of the annual salary of the person who left.
Businesses that employ between 1-250 people have a higher staff turnover rate in the UK compared to larger businesses and therefore there is even more room for SMEs to improve their retention rates. Instead of trying to stop talented people leaving, a mindset shift is making it overwhelmingly attractive to stay.
People stay in their jobs for longer if they are engaged in their work and there are two key ways to ensure people are engaged:
The first is the quality of the relationships that person has at work, particularly with their line manager.
The second is how the ambition of that person matches with the opportunities available for them in that team or business and the level of support given to them to reach their ambitions.
To increase engagement, it is easy to be distracted by assuming a physical environment at work that makes people feel comfortable will ensure they stay. Let’s imagine an analogy of a personal relationship. If a person is unhappy in a personal relationship, but their partner makes the house nicer, decorates, installs a state-of-the-art kitchen, a beautiful garden or a home gym. Is that enough? It might help for a while. But the main reason people stay in a relationship is because of the quality of that relationship and how they are treated.
As humans we have a fundamental need to know we matter. Material things and environment are a token of mattering (I matter to you therefore you have helped make this house a nice place to live), but that is short-lived mattering.
To really show someone that they matter you communicate, respect, care, and listen. This builds trust and connection over time, and ultimately loyalty.
Skilled managers and leaders are in a unique position to build quality relationships with their teams: managers who know how to empower, coach, listen and enable high performance through taking the time to understand people’s strengths. Managers who can align teams with the purpose of the organisation by sharing the purpose, being clear about the strategy, open about challenges and available for questions or concerns. These are skills that managers and leaders need as a fundamental way to increase staff retention. There is no quick fix, it does take time and patience.
Building quality line management relationships needs to be approached in a systemic way, by building a culture of quality relationships and people investment, as role-modelled by the senior leadership team. If the senior leaders of the organisation do not see it as a priority to build effective relationships and invest in teams, then why should their teams of managers see it as crucial for their teams?
At Vivid Learning & Development we help organisations build strategic plans for their people development and upskill managers and leaders through coaching and development.
We are on a mission to help SMEs, to develop and retain their talented people, which has such an important impact for individuals, but a transformative impact on the business.
Whilst people do really enjoy our learning programmes, we take that as a given - to create memorable, enjoyable learning experiences – our key aim is to ensure impact for the individual and crucially, impact for the business.
Enquire here about how we can help your business.