Insights from the 2025 State of the UK Hourly Workforce Report: Retention [Part Four]
The Hidden Cost of High Turnover – Why Retention Should Be Your #1 Priority
Why UK Retailers Can No Longer Ignore Retention
Retail and hospitality businesses across the UK are facing an unprecedented workforce crisis. According to the 2025 State of the UK Hourly Workforce report, 63% of hourly employees plan to leave their jobs within the next 12 months. Even more concerning, 68% of those who plan to quit are looking to leave the industry entirely, further shrinking the talent pool available for retailers.
For years, businesses have focused on hiring and recruitment as the primary solution to labour shortages. However, with the rising costs of employment—including increased National Insurance contributions, rising minimum wages, and new tax policies—the focus must shift towards retaining the workforce that retailers already have.
Never Miss a Retail Update!The Real Cost of Employee Turnover
Many retailers underestimate the true cost of losing an employee. The expenses extend far beyond just recruitment and hiring. Some of the biggest hidden costs of high turnover include:
🔹 Hiring Costs: Job advertising, recruitment agency fees, and onboarding expenses.
🔹 Training Costs: Time and resources spent bringing new employees up to speed.
🔹 Productivity Loss: New hires take time to become as efficient as experienced staff.
🔹 Customer Experience Impact: High turnover leads to less knowledgeable employees, affecting service quality and customer satisfaction.
🔹 Increased Overtime: When businesses are understaffed, existing employees often have to work extra shifts—leading to burnout and even more turnover.
When more than half of an hourly workforce leaves within a year, these costs compound rapidly. In a time when retailers are already struggling with profitability, ignoring retention is no longer an option.
What Drives Turnover—and How to Fix It
The 2025 State of the UK Hourly Workforce report highlights that schedule flexibility and financial security are the top concerns for employees:
- 72% of hourly employees say schedule flexibility is the most important factor influencing their job decisions.
- 40% of Gen Z workers prioritise Earned Wage Access (EWA), but only 9% of employers offer it.
- 51% of employers cite inflexible scheduling as a major retention challenge.
These findings make it clear: retention isn’t just about pay—it’s about giving employees control over their work lives.
How Retailers Can Improve Retention in 2025
✅ Adopt AI-Powered Scheduling: Automating and optimising scheduling ensures employees get the flexibility they need while maintaining business efficiency.
✅ Implement Earned Wage Access: Offering employees access to their earnings before payday improves financial stability and reduces turnover.
✅ Invest in Workforce Engagement: Recognising employees, providing career development opportunities, and fostering a positive workplace culture will keep employees engaged.
Retailers that make retention a priority will reduce costs, improve customer service, and build a more stable, engaged workforce.
Download the full report HERE to explore workforce retention strategies in depth.