Why Employee Retention is Important for Organisations

October 23, 2024

Employee retention is critical for the long-term success of any business. In Ireland, where the labour market remains competitive and companies are striving to attract and retain top talent, businesses need to invest in strategies to keep their employees engaged and committed. Retaining employees is about more than just avoiding the inconvenience of replacing staff; it impacts the company's reputation, financial health, and operational stability.

In this blog, we'll explore why employee retention matters, the cost implications of high staff turnover, and five actionable tips on how businesses can improve their retention rates.

The Cost of Replacing Staff in 2024

In 2024, the cost of replacing an employee has become more prohibitive than ever before. Estimates suggest that replacing an employee can cost a business anywhere from 33% to 50% of the employee’s annual salary. For example, replacing a mid-level employee with a salary of €50,000 could cost up to €25,000 or more when factoring in recruitment, training, and lost productivity during the onboarding process. For senior-level employees, these figures can be even higher. Indeed, in our experience, the direct costs of recruitment such as advertising, agency fees, and interview time make up a significant portion of the cost. However, the indirect costs, such as the loss of institutional knowledge, lower team morale, and decreased productivity, can have an even greater impact.

It's also worth keeping in mind that a constantly revolving workforce can erode company culture, disrupt continuity, and negatively affect the bottom line. In Ireland, SMEs, which form a substantial part of the economy, can be disproportionately affected by these high turnover costs due to their more limited resources.

The Impact of High Employee Turnover on Workforce Continuity

Workforce continuity is essential for maintaining a company's efficiency, culture, and productivity. When employees stay in their roles for an extended period, they gain valuable experience and understanding of company operations. This familiarity enhances their performance and allows them to contribute more strategically to the organisation. Continuity also helps foster strong relationships within teams and departments, making collaboration smoother and more effective.

On the other hand, constant staff changes create disruptions. New employees require time to get up to speed, and during this transition, the quality of work can suffer. Colleagues may feel burdened by taking on additional responsibilities while waiting for a new hire to settle in. In some cases, clients or customers may even notice the instability, which can undermine their confidence in the company’s ability to deliver consistent service.

High turnover can also drain managerial time and energy. Managers may find themselves frequently involved in recruitment and onboarding activities rather than focusing on growing the business or improving employee engagement. This constant cycle not only drains resources but also creates a sense of instability across the organisation, leading to a further decline in employee morale.

Brand Reputation and Employee Retention

A company’s brand is not just about its products or services - it’s also about how it treats its employees. In today’s digital age, where platforms like Glassdoor, LinkedIn, and other review sites allow employees to publicly share their experiences, a company with a high turnover rate can quickly gain a negative reputation. Job seekers are more informed than ever, and a reputation for constantly losing staff can make it harder to attract top talent. People will think twice about joining a company that seems unstable or doesn’t support its employees in the long term.

This bad reputation can extend beyond prospective employees. Customers, partners, and stakeholders may also perceive high turnover as a sign of internal issues, which can damage trust and weaken the company’s market position. From a brand perspective, consistency is key - and this applies to the workforce just as much as to products or services.

Impact on the Bottom Line

Ultimately, high turnover hits the bottom line. Aside from the direct and indirect costs associated with hiring, onboarding, and training, there’s the added challenge of productivity losses. Research shows that it can take a new employee anywhere from three to six months to reach full productivity in their role. During this period, the company is essentially paying for underperformance, which, when multiplied across multiple roles, can significantly impact revenue.

Moreover, high turnover rates can affect overall employee engagement. Employees who see their colleagues leaving frequently may feel demoralised, which can lead to reduced job satisfaction and even more exits. This creates a vicious cycle where disengagement leads to more turnover, which leads to further disengagement - all of which hurts the company’s bottom line.

Five Actionable Tips for Improving Employee Retention

The key to retaining employees lies in creating a work environment that promotes satisfaction, engagement, and growth. While there’s no one-size-fits-all approach, here are five HR-focused strategies that can help businesses in Ireland retain their talent.

1. Offer Competitive Compensation and Benefits

One of the most straightforward ways to retain employees is by offering competitive compensation and benefits packages. In 2024, employees are looking for more than just a good salary; they also want benefits that support their work-life balance, such as flexible working hours, remote working options, and wellness programmes. While wellbeing should not be the only focus, providing access to mental health support, gym memberships, or wellness days can signal that you value your employees' holistic well-being. Importantly, compensation packages should be regularly reviewed to ensure they remain in line with industry standards.

2. Create Opportunities for Career Growth

A lack of career progression is one of the top reasons why employees leave their jobs. Offering clear, achievable paths for advancement within the company can significantly boost retention. Employees want to feel that they are growing in their roles and not stuck in a dead-end job. Regular performance reviews, professional development opportunities, and internal promotions help create a sense of progress. Mentorship programmes can also be an effective way to nurture talent and keep employees motivated and engaged.

3. Foster a Positive Workplace Culture

A strong, positive workplace culture is one of the most powerful retention tools available. Employees are more likely to stay with a company where they feel valued, respected, and part of a supportive community. HR departments should work to foster a culture of inclusion, recognition, and open communication. Celebrating employee achievements, promoting a sense of camaraderie, and creating spaces where employees feel safe to share their thoughts can contribute to a more satisfied workforce.

Additionally, company values should align with those of the employees. Today’s workforce is increasingly purpose-driven, and employees want to work for companies that share their values. Whether it’s a commitment to sustainability, corporate social responsibility, or innovation, aligning your company’s mission with the aspirations of your workforce can create stronger connections and improve retention.

4. Provide Regular Feedback and Recognition

Recognition plays a key role in employee retention. People want to know that their hard work is appreciated. Companies should implement regular feedback loops where employees can receive constructive insights into their performance and be recognised for their contributions. This could be through formal performance reviews or more informal systems like peer recognition programmes or monthly awards. Acknowledging employee efforts publicly can go a long way in making them feel valued and motivated to stay with the company.

5. Encourage Work-Life Balance

Work-life balance continues to be a priority for employees in 2024, especially considering increased burnout rates in many industries. Offering flexible working hours, hybrid working arrangements, and ensuring that employees are not consistently overworked can help improve job satisfaction. A healthy work-life balance is crucial for long-term employee retention, as employees are more likely to stay with a company that respects their personal time and encourages them to maintain a fulfilling life outside of work.

Conclusion

Employee retention is not just about preventing turnover; it’s about creating a thriving work environment where employees feel valued, engaged, and motivated to contribute to the company’s long-term success. The cost of high turnover is significant - both financially and in terms of company culture and brand reputation. By implementing strategies focused on competitive compensation, career growth, workplace culture, recognition, and work-life balance, businesses in Ireland can reduce turnover rates and create a more stable, productive workforce.

Investing in employee retention is one of the most important decisions a company can make for its future success. At MSS – The HR People, we guide businesses through this process, ensuring that they not only attract the best talent but also keep it for the long haul.

< Older Post

Newer Post >

WRC Revises Code of Practice on Access to Part-Time Work: Key Updates for Employers.

By Tara Daly • February 4, 2026

The Workplace Relations Commission (WRC) has updated its Code of Practice on Access to Part-Time Work, providing clearer guidance on best practices for employers and employees in today’s flexible working environment. While the revised Code is similar to the previous version, it adopts a more positive tone towards part-time work, presenting it as a modern and flexible way of working rather than an exception . In particular, the Code places greater emphasis on work–life balance considerations, including from the perspective of parents and carers. Although the Code does not create a legal right to part-time work, it sets clear expectations for employers in terms of how requests should be handled and reinforces the importance of fair and consistent treatment of employees. Key Updates and Takeaways Part-Time Work as a Positive Option The updated code recognises part-time work as a valuable way to enhance labour market participation and provide flexibility. Employers are encouraged to view part-time arrangements as a strategic and beneficial option, rather than a limitation. Equal Treatment A central principle of the code is that part-time employees must not be treated less favourably than full-time employees. This means that pay, benefits, access to training, and career progression should be proportionate and fair, ensuring that part-time staff are not at a disadvantage. Structured Procedures for Requests A key development in the revised Code is the increased emphasis on employers adopting a clear, step-by-step framework when dealing with requests to move between full-time and part-time work. Employers are encouraged to: Review and update policies to reflect the code’s guidance. Respond to requests following a clear, structured procedure. Provide meaningful reasons if a request cannot be accommodated. Rather than informal consultation alone, requests should now be considered through a structured and documented process. Flexible Roles and Recruitment The revised Code encourages employers to consider whether part-time working can be accommodated at the point of job design and recruitment. This may include job-sharing arrangements, flexible schedules, or adjusting workloads to maintain role effectiveness. Responsibilities of Employers and Employees Under the revised code, employers are expected to establish clear policies, actively monitor roles for flexibility, provide part-time employees with equal access to training, and ensure that no employee is penalised for requesting part-time work. It is equally important to communicate with all staff about part-time opportunities, including how to request them and the criteria used to assess requests. Clear communication helps maintain transparency and ensures a fair, consistent approach to flexible working across the organisation. Employees, in turn, are responsible for complying with agreed arrangements, understanding that not all roles may be suitable for part-time work, and performing their duties as required. Both employers and employees play an important role in making part-time arrangements fair, transparent, and effective. Legal Relevance Although the code is not legally binding, it is admissible in evidence. Adjudicators may rely on it when assessing whether an employer’s approach to part-time work requests is reasonable, fair and aligned with best practice. What Does This Mean for Your Business? The revised Code encourages employers to take a more structured and considered approach to part-time working, while also protecting the operational needs of the business. For SMEs in particular, clear procedures and consistent decision-making are essential to managing requests effectively and avoiding unintended legal or operational risks. Having a documented process helps employers demonstrate fair consideration of requests, apply objective business grounds where flexibility is not feasible, and maintain continuity of service. Done properly, part-time arrangements can support retention and engagement without undermining productivity or resourcing. Part-time work should not be viewed as an automatic entitlement or an informal arrangement. Employers are encouraged to review their policies, communicate expectations clearly, and ensure that any flexibility granted is sustainable, consistent, and defensible if challenged. If you need any assistance reviewing your company policies in line with this revised Code of Practice, please do not hesitate to contact MSS The HR People. PH: 018870690 Email: info@mssthehrpeople.ie

WRC Awards €8,000 for Unfair Dismissal Following Employee Pregnancy Miscarriage

By Tara Daly • February 4, 2026

A recent Workplace Relations Commission (WRC) decision highlights the significant risks employers face when they fail to follow fair procedures in managing employee illness and highly sensitive personal circumstances. In this case, a sushi chef who was dismissed shortly after suffering a miscarriage was awarded €8,000 in compensation for unfair dismissal. The decision serves as an important reminder to employers that regardless of previous concerns around attendance or conduct, employers must act reasonably, compassionately and in accordance with fair procedures. Background of the Case The complainant was employed as a sushi chef with Beacon Sushi Limited. In early 2024, she informed her employer that she was unwell and subsequently confirmed that she had suffered a miscarriage. She later provided a medical certificate covering her absence from work. Approximately five days after the miscarriage, the employee received a WhatsApp message notifying her that her employment was being terminated and that she was expected to work her notice period, even though she was medically unfit to do so at the time. The employer claimed that the dismissal was due to concerns regarding timekeeping and the employees alleged failure to follow the company’s absence reporting procedures. WRC Findings The WRC adjudication officer found that the dismissal was unfair and was critical of the manner in which the employer handled the situation. The WRC noted that the dismissal letter did not set out any clear reasons for termination and that no meeting was held with the employee prior to the decision being made. In addition to this, the employee was never given an opportunity to respond to the concerns raised, nor was she afforded a right of appeal. The adjudicator also considered that the employer was aware of the employee’s medical circumstances when the dismissal decision was made. The WRC found that dismissing an employee in such circumstances, while she was on certified sick leave and without any fair or transparent process, fell well short of the standards required under Irish employment law. As a result, the employee was awarded €8,000 in compensation for unfair dismissal. Key Lessons for Employers This case serves as a reminder that fair procedures are essential in all dismissal situations, regardless of the surrounding circumstances. Even where an employer believes there are legitimate concerns relating to attendance or conduct, employees must be informed of those concerns, given a meaningful opportunity to respond, and provided with access to an appeal process. The decision also highlights the need for particular care where an employee is medically vulnerable or experiencing significant personal trauma. Employers are expected to exercise sensitivity and sound judgement when managing illness-related absences, particularly when the employer is already aware of the employee’s medical condition. Dismissals that take place during periods of certified sick leave carry an increased level of risk and will be closely scrutinised by the WRC. This risk is further heightened where dismissals are communicated informally, such as by text message or WhatsApp. Informal communication around dismissals has been repeatedly criticised by the WRC. Finally, the case demonstrates that management policies should be applied thoughtfully and must consider the individual circumstances at hand, rather than being rigid. While policies provide an important framework, they should not be used as a substitute for fair judgement or proper procedures. Conclusion This WRC decision is a timely reminder of the legal and reputational risks that can arise when employers fail to follow fair procedures, particularly in cases involving illness or sensitive personal circumstances. Employers should regularly review their practices around sick leave management, disciplinary procedures and dismissals, to ensure compliance with employment legislation and alignment with best practice. If you require advice on managing sick leave, dismissals or disciplinary processes, please do not hesitate to contact MSS The HR People: Ph 018870690, Email: info@mssthehrpeople.ie