Can staff retention damage business growth?

The quick answer to “Can staff retention damage business growth?” Is simple, yes. In this blog we will explore:

• How staff retention benefits businesses.
• How staff retention can damage business growth.
• How invoice finance as a solution for business growth.

In today’s competitive business landscape, retaining top talent is crucial for sustainable growth. But what happens when employees leave companies at an alarming rate? Industries within the UK, such as manufacturing, are facing this issue, as well other issues such as an aging workforce, and skilled labour shortages.

A report by Wiley Edge found that increased employee turnover can lead to a deterioration of company culture. The study, which surveyed 500 UK business leaders, revealed that nearly two-thirds (63%) of businesses experienced a decline in company culture due to high staff turnover. This can have a ripple effect, leading to decreased employee engagement, a toxic work environment, and even the departure of long-standing employees.

Long-standing employees drive the mechanics of businesses. Not only do they hold vast product and service knowledge, but they also guide new hires during their early training days. Below we will highlight ways in which businesses benefit from staff retention:

• New employee training: Whilst new hires are going through training, long-term staff “hold the businesses fort”. Meaning that, clients continue to receive products and/or services without being affected by staff in training.
• New employee support: We all make mistakes. Starting a new job and learning new roles can be daunting. Long-term staff tend to offer support and guidance to new hires. They can teach them “tricks and tips” of the industry, ways to do their role with ease whilst increasing productivity.
• Client confidence: People buy people. Long-standing employees build strong relationships with clients. Their experience and knowledge give clients confidence in their purchase, which in turn can lead to increased sales.
• Brand Ambassadors: Long-serving employees become living testaments to the company’s positive work environment and culture. They can act as brand ambassadors, attracting new talent and promoting the company’s reputation.
• Cost savings: Recruiting and training new employees is an expensive and time-consuming process. Retaining experienced staff significantly reduces these costs, improving the company’s bottom line.

Now that we have explored how staff retention helps businesses, lets flip to what happens when staff retention damages business growth.

How staff retention can damage business growth.

The financial implications of poor staff retention can be substantial. Businesses are forced to incur additional costs associated with marketing, recruitment, and onboarding new staff. Poor retention rates can create a vicious cycle, where high turnover leads to further recruitment needs, further increasing expenses.

Below is an overview of cost and resource implications that the business can suffer:

• Recruitment costs.
• Time spent interviewing prospects.
• Loss of team productivity, as they can be stretched to cover additional tasks.
• Temporary recruitment agency costs to fill skills gaps while hiring.
• Training costs for new employees.
• The time it takes for a new employee to work confidently.

The longer a role remains unfilled, the greater the impact it has to the business. This in turn damages business growth. Whilst there is money going out the door to cover resources, there is less money being invested into the business itself. New products can’t be developed, bigger contracts may be lost due to resourcing issues, or simply, the business cannot afford to grow.

How invoice finance is a solution for business growth.

Invoice finance is an alternative funding solution, whereby the business sells its upcoming invoices to a provider. By doing so, the business receives a pre-payment on funds within 24 to 48 hours of notification of sale. High staff turn-over can put a significant strain on a business’ resources.

However, with access to cash which otherwise would be tied up in unpaid invoices, businesses can:

Bridge the funding gap: Invoice finance provides a cash injection to cover the costs associated with recruitment, onboarding, and training new staff. This ensures the business can maintain smooth operations even during periods of high turnover.

Invest in growth while retaining talent: With improved cash flow, businesses can invest in growth initiatives like product development, marketing campaigns, or expanding into new markets. This creates a more positive and stimulating work environment, which can help retain top talent.

Focus on employee development: Reduced financial strain allows businesses to allocate resources towards employee development programs. This can include leadership training, skill-building workshops, or attending industry conferences. Investing in your employees’ growth shows them you value their contribution and can improve morale and retention.

Our experience in invoice finance

At Partnership Invoice Finance we are proud to boast about our experienced team, and their knowledge within invoice finance. Our managing director holds over 30 years of experience within invoice finance, and guides the team with his wealth of knowledge.

Collectively, our regional sales managers have over 55 years within financial services. They are dedicated to finding the right funding solution for each business.

Through Partnership Invoice Finance, businesses can achieve sustainable growth. We provide funding options between £20,000 and £1 Million.

Staff retention is crucial for sustainable business growth. By mitigating the financial strain associated with high turnover, invoice financing can act as a bridge, allowing businesses to invest in both their employees and future success. Remember, a strong team is your greatest asset, and invoice financing can be a tool to help you build and maintain one.

We welcome businesses of all sizes to contact us. Discover how together we can achieve growth.