New research from HiBob, has shown how one resignation at a small or medium sized business (SMB) can destabilise an entire company.
One in three (31 per cent) SMB employees have quit their job because a colleague left, and nearly half (48 per cent) would consider doing the same. With over half (52 per cent) of Brits currently working in SMBs considering quitting in the next 12 months, and 10 per cent actively looking for a new job, the turnover repercussions could be huge for SMB employers.
For SMBs, the effects of turnover go beyond losing a single team member; they disrupt whole teams of close-knit people. Three-quarters (75 per cent) of SMB workers say they enjoy their job because of the culture and purpose, and 77 per cent report having close working relationships with their colleagues. Nearly as many (74 per cent) say those connections have become genuine friendships extending beyond the office.
As a result, staff departures at SMBs are hard felt. 71 per cent of employees say losing a team member feels like losing a friend, and 60 per cent say a single exit has a significant personal impact. This is no surprise given that 62 per cent of SMB employees say it’s the people around them who drive them to do their best work.
The emotional impact of turnover is felt deeply within SMBs, not to mention the critical business consequences. One in seven (15 per cent) SMB workers with hiring responsibilities say they’ve experienced a 40 per cent turnover of their workforce in the past year, and 31 per cent report that replacing a single person costs more than £10,000.
The pressure of employee turnover is taking its toll on SMBs. Over seven in ten (71 per cent) SMB workers with hiring responsibilities say delays in hiring are damaging morale and work-life balance, and 61 per cent admit rising employee costs are forcing them to expect more from the people they retain. For 48 per cent, the pressure is causing them to lose sleep worrying who’ll leave next.
“In small businesses, even one resignation can have a disproportionate impact on output, morale and momentum,” notes Ronni Zehavi, CEO and Co-founder of HiBob. “SMBs are powered by close relationships and a shared sense of purpose, which makes them incredibly resilient – but also more exposed when those dynamics shift. Retaining talent in this environment isn’t about quick fixes. It’s about consistency: recognising people, creating clear paths for growth, and investing in a culture that makes them want to stay.
“Our data shows the employee focus is shifting away from pay alone – towards recognition, career development, and creating a reason for employees to stay. SMBs who prioritise these will be one step ahead in avoiding the cost of resignation.”