According to the research, from PricewaterhouseCoopers, the UK economy could save itself £42bn if it could improve employee retention. But it looks like companies aren’t putting as much effort in to keep their best talent as they used to – whereas in 2009, 54% of businesses said they placed a special focus on retaining talent, this year, that’s dropped down to 36%. And while just under half said last year that they had invested more time than usual in hiring the best staff, that number slipped to just 30% this year.
But it’s not always so simple. More than half of businesses say they’ve had to reduce their wage bills. And in many cases, it isn’t even about money – 67% of businesses say that the reason they have recruitment difficulties is not because they can’t afford to pay wages, but because applicants don’t have the right skills for the job. 15% of companies even said they haven’t had any applicants – which is interesting when you compare that with unemployment figures…
But the survey also showed that the average cost of replacing an employee, including all the training and recruitment costs, is £25,000. And while the temptation might be to freeze wages while businesses recover, says PwC partner Richard Phelps, in the long-term, it could be a false economy. ‘Companies often underestimate the financial benefits of retaining existing employees,’ he says.
Which is all well and good in principle – but when you’ve got growth to invest in, who wants to spend money on touchy-feely team building exercises?