We’ve all been there—waving goodbye to a great teammate and scrambling to fill the gap they left behind.
But within all that discomfort lies a guiding compass that can show us the way towards greater employee engagement, satisfaction, and ultimately, retention.
Here at Awardco, we’re data nerds passionate about happy workplaces. That’s why we’ve been digging into the latest figures on labour turnover and tenure. We want to equip you with the knowledge you need to create a workplace people genuinely love—and don’t want to leave.
So, let’s dive in. First, we’ll go over the numbers, and then we’ll provide actionable solutions your team can consider implementing to lower your turnover rates.
UK Average Labour Turnover Rates
The annual average turnover rate in the UK is around 15%. As a general rule of thumb, a turnover rate of less than 15% indicates a happy team—but determining a good turnover rate to aim for depends in part on the norms for your industry.
Turnover Rates Across Industries
Turnover rates can vary quite a bit depending on the industry and other factors.
For reference, here are some examples of turnover rates across industries:
- Hospitality: 37.6%
- Retail: 33.6%
- Education: 22%
- Manufacturing: 20%
- Construction: 19%
- Health and Social Care: 14.8%
- Financial and Insurance: 12.8%
Reasons Behind Turnover Rates
Ever wonder why some jobs seem like revolving doors? There are a bunch of reasons why certain industries have much higher turnover than others.
For example, if we look at the numbers above:
- Hospitality might have high turnover due to a lack of work-life balance (long shift hours) and a high-stress work environment. Moreover, seasonal fluctuations in tourism can also drive frequent departures.
- Employers in the financial and insurance industry may experience lower turnover because of the stability and lucrative nature of this space. It might also offer more opportunities for advancement within established institutions.
Average Employee Tenure
Taking a look at tenure can tell employers a lot of things as well. The numbers can gauge the level of employee loyalty and commitment. They can also unveil the stability and reliability of the teams.
For example, a workforce with low tenure could indicate the team experiences frequent disruptions in personnel and productivity.
We encourage you to explore tenure data from several different angles below and give your talent strategy the holistic attention it deserves.
Longest Tenure Length
When researchers asked people in the UK what their longest tenure was, the average was over 10 years.
The research also reports:
- Over 10% of respondents said their longest tenure so far has been less than a year.
- Roughly 1 in 5 people haven’t stayed with one employer for more than 2 years.
So, while some people have stayed at an organisation for a decade or more, there is still room to improve tenure lengths for many.
Age
Tenure across age varies quite a bit, but overall, older individuals tend to have longer tenures.
For example, over 60% of those aged 55 and over have stayed at a single employer for over 10 years. Compare this to roughly 20% of those aged 35 to 44.
Part of this may be due to the simple fact that older employees have been in the workforce for longer and have had more time to find a company to stick with for the long haul. But there could be additional factors at play.
Bosses often say experienced workers are great at solving problems, communicating clearly, and working hard. They also understand how to give excellent customer service and see the bigger picture.
Changing attitudes towards work across generations could be a factor as well. Job hopping, which was once frowned upon, has become increasingly normalised in recent decades, making younger generations more likely to change jobs frequently.
Regional Variations
A company’s location can also make a difference in employees’ tenure lengths.
People living in or near London are likelier to have shorter tenures than those residing in other parts of the UK. Meanwhile, Wales has the longest average tenure.
In Greater London, roughly 1 in 5 people have not stayed with an employer for over a year. This is much less likely in Wales, where the number is only 1 in 20.
The metropolis of London might explain this. With a wider range of industries and a faster pace of business, London may offer more job opportunities with shorter tenures compared to most other areas. On the other hand, Wales has fewer opportunities and the lowest employment rate in the UK, so people may be more inclined to hold on to their jobs.
Gender
Overall, women tend to have longer tenure than men. The mean maximum tenure is 1+ years longer for women, and men are much more likely than women to report never having stayed at a job for more than 2 years.
It’s important to consider job level, however, since that’s where things get complicated. For example, research indicates that female chief executives at publicly listed companies have shorter tenures compared to men.
The researchers suggest the “glass cliff” could be to blame for this trend. The glass cliff is the idea that females are more likely to be appointed as leaders during times of crisis. As a result, their role is more high-risk than that of their male colleagues. This doesn’t necessarily set up individuals for success, does it?
Company Cost of Labour Turnover
When people leave, it doesn’t just hurt your team—it hurts your bottom line. Every time a person leaves, it takes a company approximately £3,000 per employee and 27.5 days to hire someone new. This can include the costs of:
- Recruiting new candidates
- Conducting interviews and assessments
- Running background checks
- Training the new hire
Add to that the lost revenue from reduced productivity until your new hire is fully onboarded, and it’s clear that turnover costs can quickly add up.
Reasons for Voluntary Labour Turnover & What You Can Do About It
So what can you do? A good first step is to figure out why people are leaving in the first place. That way, you can tackle those root causes and keep your hardworking team happy!
A 2022 study by Edenred uncovered the most common reasons for leaving a job. We’ve listed some of them below, with the percentages, to help with actionable strategies for managing them.
Feeling Unmotivated (15%)
Out of 2,000 professionals surveyed, 15% expressed a lack of motivation as a reason for quitting their job.
Possible Solutions
Employees aren’t just workers. They’re human beings with a drive to find purpose. Research shows a clear link between meaningful work and motivation.
"Experiencing meaningful work reflects a deep personal linkage between an employee and his or her work which motivates an employee to go above and beyond the normal requirements of their work."
So what is their purpose?
Help your team members identify their purpose by asking them:
- What makes you happy and whole?
- What truly nourishes and fulfils you?
- In what circumstance have you given away too much of yourself for little return? What did you actually need and want during those moments?
Based on the responses, encourage team managers to help tailor an individualised development plan that is rooted in the employees’ vision.
Being Overworked (14%)
64% of employees want their organisation to promote better work-life balance. When people are overworked, their ability to maintain a personal life becomes muddled. It’s no wonder that overwork is one of the top reasons for labour turnover.
Possible Solutions
Work-life balance can mean several things. For some, it might mean not working over 38 hours; for others, it might mean being able to manage a personal life during the day without the hassle of requesting permission to do that.
The critical thing is to ask your people and show you care. The more you adapt work-life balance to the needs of your employees, the happier they’ll be. And happy team members are up to 20% more productive than their unhappy counterparts.
Poor Atmosphere (14%)
A lack of communication, teamwork, or motivation can create a poor work atmosphere. While each of these factors might seem minute in any given situation, over time, these “small” components add up, and soon enough, people find themselves in a less-than-ideal workplace.
Possible Solutions
Focus on elevating morale in the workplace. A good place to start? Recognition. Think about how you’re currently recognising employees. How regularly do you reward people for their stellar work? What kinds of rewards are you providing?
Leveraging quality rewards and recognition software can help you automate the process while still giving employees the customised gifts they deserve.
The reality is, recognition doesn’t have to be just another task item on your to-do list. Let technology do the work for you—allow it to remember all significant milestones and provide team members with individualised reward options. It’s a win-win for everyone.
Less Pay Than Desired (13%)
There’s nothing more discouraging at work than being paid under market value or not being paid what you’re worth—so it’s no surprise low pay made the list.
Possible Solutions
Transparency is key. Be transparent about what you can offer. For example, if 3% is the maximum pay increase you can provide at a given time, disclose that information to employees.
Pull current data on market values and compare that to your current pay offerings. How can you help employees get to those market values? What does the timeline look like? Craft a plan and present it to your team members.
Good leaders are aware of pay equity issues and are willing to advocate for team members to ensure they’re compensated fairly.
No Room to Progress (11%)
When employees hit a development wall, their passion and drive for their roles dip. This becomes more likely the longer people stay at a given employer. Retaining these team members requires constant iteration on learning and development.
Possible Solutions
What are your employees’ career aspirations? What do they want to learn more about?
Take time to map out each team member’s strengths and weaknesses. This can offer a good foundation for establishing goals.
Engage your team members in discussions about their development and goals. The more involved they are in their L&D journey, the more success and fulfilment they will experience. Together, you can define their career trajectory.
Stay Rooted in Authenticity with Awardco
All of this data on labour turnover and tenure points to the importance of injecting your employee experience with authenticity. When you create a talent strategy rooted in your people’s wants, pain points, and goals, you build a genuine workplace culture where everyone feels heard and valued. What’s better than that?
One great place to start building authenticity is Awardco. Our reward and recognition platform gives businesses the chance to customise their recognition programs without sacrificing quality or time.
We encourage you to learn more about employee recognition. We’ve even got a nifty budget calculator to help you get started on the right foot.
