The art of engagement


Do you have a problem?

Turnover levels can vary widely between occupations and industries. The highest levels are typically found in retailing, hotels, catering and leisure, call centres and among other lower paid private sector services groups where up to 50% of employees leave in a 12-month period.

Levels also vary from region to region. The highest turnover rates tend to be found where unemployment is lowest and where it is relatively easy for people to secure desirable alternative employment.

Much lower levels of turnover are generally experienced by smaller businesses who may experience little or no staff losses over a number of years. But even if you are only saying goodbye to one team member a year it’s going to be worth further investigation.


For most small business owners who run a tight ship any loss of staff can have a major impact particularly in the short term. The average small business employs around 5 people so you are losing 20% of your capacity overnight.

In addition many of the roles are highly skilled and can be scarce in your area. They may well be a key employee with specialist knowledge and/or relationships. Worst still they may have been one of your stars and end up working for a competitor.

It takes time to find a good replacement and then you will have to invest further time and money in their induction.

The Costs

The costs associated with employee turnover are significant if you sit down and think about the knock on effect of losing a key employee.

The major costs are your time in sourcing a replacement - the indirect or opportunity costs, which also include the costs of disruption, which may have an impact on customer service. In addition you may well incur significant direct costs in the form of advertising, agency fees and training. The average direct cost of recruitment is currently estimated at £4,000. 

Why do people leave?

Employees resign for many different reasons. Where formally documented and recorded the top three reasons cited are lack of job satisfaction, dissatisfaction with pay and benefits and a lack of development opportunity.

Hidden behind these factors is often the relationship they have with their boss- a critical factor leading to the sobering thought that most people leave managers rather than organisations.

When you boil down the things that most people really look for in work, aside from the money, it’s generally the simple duo of flexibility and influence in how they undertake their role and the belief that their work makes a difference and is valued.

Research also indicates that the early weeks and months are crucial in establishing a long and productive career.

Early exits

Even when people stay for a year or more, it is often the case that their decision to leave sooner rather than later is taken in the first weeks of employment.

Poor recruitment and selection decisions, both on the part of the employee and employer, are usually to blame, along with poorly designed or non-existent induction programmes. Expectations are also often raised too high during the recruitment process, leading people to compete for and subsequently to accept jobs for which they are in reality unsuited.

Investigating Reasons for leaving

You will normally know why someone wants to move on from your business. Small business units thrive on close communications and there are not too many secrets. If you are suffering from unexplained turnover, then you really need to understand what is going on and you have the right to ask. It’s worth following up on a confidential basis and trying to understand in case there is a bigger issue lurking. Bear in mind you may be part of the problem! Once people have made up their mind to go concessions rarely do any more than exacerbate the situation so put the cheque book away and take on board any valid criticisms for next time.

Engagement vs. employment

So what’s all this fuss about engagement? Another new concept from the consulting world to get us all hot under the collar? Well maybe a fancy word to sum up something we all recognise when we look at our long serving, star performers. What makes them stand out from the crowd? Sure, they can do the job better than most but generally they are really well tuned in to the organisation and will go the extra mile. They are truly engaged with the business and as such are far more likely to stay longer.

Setting the tone

If engagement is a big part of instilling loyalty then it’s worth investing in creating a culture that enables all of your staff to tune in. Time spent on the following main areas should help to create the kind of culture where people feel they really belong and want to stay.

Be honest and accurate about the role - give prospective employees a 'realistic job preview' at the recruitment stage. Take care not to raise expectations only to dash them later.

Be clear about your expectations- set out the main requirements and standards of the role via a job description. Set aside time to give feedback on how they are doing. Little and often is best rather than waiting for a full-blown annual review. And be really clear about what’s in it for them in terms of reward and other benefits.

Opportunities and variety- maximise opportunities for employees to develop skills and move on in their careers. Where promotions are not feasible, look for sideways moves that vary experience and make the work more interesting.

Listen and act – Back to little and often again is the best approach to giving your teams both a voice and your ear. And act on the suggestions that make sense.

Be flexible - A frightening thought for a small business where control is everything, but good people deliver exceptional performance when they are given flexibility in relation to where, when and how their work gets done.

Work isn’t everything- it may be everything to you but for them there is life outside the lab. A healthy work life balance normally results in higher levels of productivity and effectiveness.

Job security - provide as much job security as possible. Employees who are made to feel that their jobs are precarious may put a great deal of effort in to impress, but they are also likely to be looking for more secure employment at the same time.

Treat people fairly - a perception of unfairness, whatever the management view of the issue, is a major cause of voluntary resignations. For example, perceived unfairness in the distribution of rewards is very likely to lead to resignations.