How to Retain Talent to Reduce Recruitment and Training Costs

A tricky situation for HR

These days engaging and retaining talent is a major headache for HR in most organisations. Engagement and retention are now a key focus areas for most companies. Even so, it’s often an uphill struggle to retain talent and to reduce recruitment and training costs.

In the Work Institute’s recent ‘2002 Retention Report’ there was evidence to show that employee perceptions of their employer actually fell by 64% in 2021.

The great resignation

Combine falling employee perceptions with employee churn and the picture gets worse still.

In a recent study, the recruitment site Monster Jobs found that the current ,average team churn is 15% of head count per annum.

This means that in a team of 20 people there will 3 leavers / new starters on average each year.

How much does poor retention cost?

In a recent study by the Society for Human Resource Management (SHRM), they found that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average.

For every manager making £40,000 that leaves your team each year, that’s £20,000 to £30,000 in recruiting and training expenses.

So based on this and on average the numbers look like:

20 employees x 15% churn = 3 new starters per year

3 new starters per year x £20000 of recruitment and training costs

£60000 per year = Total cost of poor engagement and retention in a team of 20

Retaining talent and reducing costs seems like a good strategy to adopt here!

What has team building got to do with it?

As a team building company that first set up in the hedonistic ‘noughties’, we have huge changes in team building world in 20 years.

Back then, big budget team parties and extravagant corporate hospitality days were the norm. A high 5’ing, alcohol fuelled, team building was a regular part of corporate culture.

Today, factoring in tighter budgets, remote working and a search for more meaning at work are top priorities. Often with an emphasis on inclusivity, it’s clear attitudes to team building events are more nuanced.

As a UK leader in team building activities, we’ve noticed that these days teams get together less at a nominally lower budget than 20 years ago.

Team building activities could and should be used more regularly. This offsets recruitment and training costs by building a team culture that supports your retention efforts.

Focusing on teamwork works!

Don’t just take our word for it – In Zippia Research Inc’s 2022 – Collaboration Statistics [2022]: The Importance Of Teamwork Report they found that Companies that promote team performance have been linked to reducing employee turnover rates by 50%.

According to eml team founder and team building guru Neil Cleaver, in order to work well team building needs to be:

• “Appropriately pitched”
• “Genuinely engaging”
• “Enjoyable for participants without being making participants look like fools”
• “Intelligent”
• “Linked to key internal communications messaging”.

Team building is a cost effective solution to staff retention!

When you consider that the average cost of a fun and engaging team building activity can range between £50 to £100 per team member, these costs are insignificant when compared to £60000 of annual churn cost for a team of 20.

Even for a high calibre team build activity such as these, you’d be looking at spending £3000 on your team of 20 for one event.

With a relative cost of just 15% of the average total annual recruitment and training costs for a team of 20; if a tailored team building activity helps you retain just one team member in 24 months you’ll save thousands of pounds!

If you retain talent you will reduce recruitment and training costs.

Summary

When it comes to focusing on employees’ engagement and ultimately their retention things have changed for the better in the last 20 years.

Team building should be be a part of your retention strategy.

Speak to our team now for quick, no hassle, team building proposals unique to your team. Let’s start retaining your wonderful people.