Did you know that the average rate of staff attrition in the UK is 15%? That means, every year, fifteen out of every one hundred people are likely to leave your organisation. Of course, depending on your workplace culture and the pay and rewards you offer your staff, that figure could be slightly higher or lower, but even losing 10 people out of a team of one hundred will have a major impact on your business throughout the year.
So we can all agree that losing a member of staff (or 10) is a bad thing, and a recent report by Oxford Economics has managed to put an average monetary figure on how bad this is in terms of the cost to your business. That figure is £30,614 per lost employee. You might think that’s quite a lot when it comes to replacing one of your own employees, but there are many hidden costs to staff attrition and we’ve listed some of them below. Firstly, the figure is made up of costs that fall into two categories:
- The Logistical Cost of recruiting and absorbing a new worker
- The Cost of Lost Output while a replacement employee gets up to speed
Let’s take the Logistical Costs to begin with. There’s the time spent by HR or a Line Manager writing a vacancy. Then there’s the cost of advertising it. If you push it out to a recruitment agency, they will charge between 8 and 15% of the annual wage of the role, and don’t forget the time spent by Managers carrying out the interviews, HR in organising the contract and your IT department in provisioning a new person across all of your systems if that’s needed.
Moving on to the cost of lost output, you’ll need to take into account a short period of time prior to the existing person leaving (perhaps when they had handed in their notice), when they were no longer motivated and working to full capacity. Then there’s the period between the old person leaving and the new one starting. That could be days, weeks or even months. You might even have opted to get a temporary contractor in to fill the role at extra cost whilst you searched for the new one.
Once the new person is in place, you’ll need to provide training on your business and on the role before they can even get started. But that’s not all. According to the report, your new starter will take an average of 28 weeks getting up to speed with their role. That’s 28 weeks of an employee not working at full capacity. If it’s a graduate, that increases to 40 weeks. Worse still, the larger the business, the longer it takes.
Of course with figures like that, the question you’ll most likely be asking now is “how can we minimise staff attrition to cut our losses?”. Well, luckily the solution is relatively simple and, if you’re a company with an annual wage bill of over £3 million, you could recover your Apprenticeship Levy payments at the same time.
Providing your employees with meaningful, training and a structured career path has been proven to improve employee motivation and increase staff retention. Employees that feel that there is a future beyond their current role and can see the steps that need to be taken to achieve the next level work harder, are more committed and more likely to remain with your company long term.
This can all be achieved by implementing an in-house apprenticeship programme, funded by the money your business is paying into the Apprenticeship Levy. Contrary to popular belief, apprenticeships are not just for new, “fresh out of college” junior employees. Take away the name and an apprenticeship is simply an extensive training programme, designed to fit in with and enable a person’s career. Apprenticeships cover a wide range of subjects and are offered a variety of levels, from junior all the way through to Degree apprenticeships.
That means your employees could be receiving formal qualifications or even degrees in subjects that will enable them to become an even greater asset to your business, whilst at the same time committing them to your business for the long-term. Best of all, if you’re a company with an annual wage bill of over £3 million, this additional training can be funded by the money you will have already started paying into the Apprenticeship Levy.
If you would like to discuss this subject in more detail and explore how to set up an apprenticeship programme in your company to take advantage of the Apprenticeship Levy, or take advantage of our Learning and Development advisory service, then contact us today through this or by calling us on 020 3651 4747.