Employee retention is the ability and strength of an organisation to ensure sustainability by retaining its current employees long-term. This cuts staffing costs and increases revenue and return on investment (ROI) due to better productivity, customer service and morale from employees.

Here are some vital employee retention statistics, courtesy of Forbes:

Five Reasons Why Companies May Have Low Retention Rates

They don’t appreciate or value their staff 

37% of workers say employee recognition is important. When employees aren’t valued for the hard work they do for an organisation, they’ll lose motivation, which impacts the workflow and, subsequently, ROI.

For businesses, you can recognise your employees by offering work-based incentives and benefits for those performing well and meeting their targets. 

You can also have quarterly, semiannual, or annual peer reviews to give employees a chance to receive a raise or a promotion, as well as mention any issues around job satisfaction or the company.

They hire people who are unsuitable for the job 

According to Forbes, over 40% of employees who leave within the first year do so in their first 90 days. One reason is that employees soon realise their skills don’t match the role.

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For businesses, you can avoid hiring people who are unsuitable for the role by ensuring the job description and interview process gives potential employees an accurate understanding of what the role entails. This will decrease the number of people who apply and later realise the job differs from what they wanted or are qualified for.

They don’t offer as many benefits as their competitors

Employees who aren’t satisfied with their role or the company may search the job market for better opportunities in the industry. 

For businesses, ensure your employees have room to grow within the organisation and that your benefits package is as good as your competitors. A benefits package can include:

The work environment is negative

If your teams don’t support each other and work well together, it can have a detrimental impact on employee morale. This can result in losing a significant number of staff within a short time and potentially causing brand damage.

For businesses, make sure the work environment is positive by often organising regular team-building activities, social events and staff parties. It is also essential to quash any workplace issues by dealing with them professionally.

They don’t offer flexible working opportunities

Thanks to the Covid-19 pandemic, people have made flexible hours, remote working and hybrid working a priority, so your organisation should avoid having a rigid schedule if possible. As part of what is now known as ‘The Great Reshuffle’, millions of people left their jobs in search of roles with better flexibility.

Flexibility will attract employees to stay within your company as their hours and work environments suit their lifestyle and other commitments such as childcare.

For businesses, you can use HR software that manages flexible hours, work environments, and space requirements such as hot desking, which employees should be able to book from their smartphone or laptop easily.

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Four Reasons Why Employee Retention Is Important

Businesses avoid employee turnover costs

Hiring a new employee is expensive. The costs include not only recruitment and onboarding expenses but also drops in productivity, disruptions to workflow, and the resources required for training new staff. 

As a bonus, companies who hold onto their employees get to reinvest the money they would’ve spent on hiring into benefits for their current staff, such as social events, training courses, and potential salary increases.

Customers get a better service

Customers will notice if they’re dealing with a continual flow of different people, and they usually favour organisations where they see familiar faces over time and develop a relationship with employees.

Organisations with a lower retention rate end up with fewer experienced employees handling customer queries, which means complaints about customer service may increase, and customers could start losing faith in the company.

In the wise words of Richard Branson: “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”

The workflow stays efficient

Experienced employees quickly and efficiently execute their workplace tasks, which results in fewer mistakes, better productivity and, subsequently, a higher ROI.

A higher separation rate means more employees are forced to pick up the tasks of their ex-colleagues, whilst new employees require training and time to get up to speed with the demands of their role. 

Businesses avoid negative cultural changes

Long-term employees have learnt how to work with their colleagues to get the job done and may have built helpful relationships with other departments in the organisation.

If teams are often changing, you may notice a significant shift in culture as employees may no longer work effectively as a team. This causes miscommunication, mistakes, delays and a negative workplace culture.


Employee retention remains a key focus for businesses in 2023 and beyond. To retain employees, organisations must engage with and recognise workers, as well as offer more work flexibility and company benefits.

Organisations can deploy anonymous and brief employee surveys to get an idea of inside impressions of the company and take action to ensure high job satisfaction and, therefore, a high retention rate.