Research released by HR software platform Employment Hero has found that London businesses are more at risk than any other UK region of losing talent, with two thirds (65 per cent) of London employees signalling an imminent move, which could cost London businesses £48 billion.
The research, which polled 1000 employees in August and September 2021, found that the capital’s workforce is 12 per cent more likely to switch jobs this year than any other region as it it revealed that, across the UK, 62 per cent of executives and senior managers have started looking for new jobs to move within twelve months.
When asked their top reasons for leaving, 29 per cent of London workers cited a lack of pay rise, while a quarter (24 per cent) are feeling overworked, over a fifth (22 per cent) would leave because of their boss and 12 per cent would leave because of their colleagues. 16 per cent named a lack of training opportunities as a key reason for leaving.
Despite many moving outside of the capital during the pandemic, 19 per cent of those in London are still frustrated with a lack of flexibility in work hours or location.
It also revealed that the pandemic has allowed senior managers across the UK to re-evaluate their career, propelled by this group of higher earners being 75 per cent more likely to have received a pay cut.
Businesses that are unable to retain their executives and managers will be faced with huge costs. Employment Hero predicts that 2.5m executives and managers will need to be replaced, at a cost of approximately 33 per cent of the average annual salary. This equates to £34 billion to cover recruitment and training costs for the new hire and a reduced productivity during the hiring period*.
In London, this figure jumps to 3.5m for workers across all career levels, potentially costing its businesses £48 billion to replace their key talent.
Almost four fifths (77 per cent) of British millennials are actively looking for new positions. In comparison, two thirds (65 per cent) of employees between 35-44 years old are ready to make a move.
Across all levels of seniority, of those who had spoken to a recruiter in the last six months, 80 per cent had proactively made initial contact.
Ben Thompson, CEO of Employment Hero, said, “There is no point focusing on recruitment if you aren’t also going to consider retention, so it makes sense for London’s small businesses to make this a business priority. The mass executive resignation is an indicator for the larger employee crisis that is facing many small and medium sized British businesses.
In the high-stress context of the pandemic, some managers came to the table with employee understanding and care, but some fell short under pressure. It has allowed employees the time they need to really evaluate what they deserve from their employer, so it’s clear that employers can neglect their concerns no longer.”
* The Work Institute suggests that the cost of an employee’s turnover is 33% of their annual salary, in addition to recruitment and training costs for the new hire and reduced productivity in the hiring period. This means that businesses could face losing up to £34 billion over the next six months.