What are the signs a good employee is about to leave?

By the HR experts at MJV Consulting – With over 40 years combined experience supporting small and medium-sized businesses across Sussex, Surrey, and London. Since 2016, we’ve supported small businesses in Sussex, Surrey and London with forward thinking HR strategies designed to support your growth.

Introduction

Picture this. One of your best people hands in their notice. The immediate reaction is a mix of surprise, disappointment, and quiet panic about how you’re going to cover everything. Then the practical thoughts kick in: post the job, interview some candidates, get someone in.

The truth is, losing a good employee costs significantly more than most business owners realise and the bill doesn’t stop at the recruitment fee. According to research by Oxford Economics and Unum, replacing an employee earning over £25,000 per year costs a business an average of £30,000. And that’s before you factor in the ripple effects on your remaining team.

So let’s break down exactly where that money goes, look at the warning signs you might be missing, and, most importantly, talk about what you can do about it.

How much does it actually cost to replace an employee?

The full cost of replacing an employee typically falls between 50% and 200% of their annual salary, depending on the role and seniority. Here’s where those costs come from:

• Recruitment costs — whether you use a recruiter (who typically charges 10–20% of the annual salary) or go it alone, advertising, screening CVs, and running interviews all take serious time. At £100 per hour of a business owner’s time, that adds up fast.
• Lost productivity — there’s the gap while you’re recruiting, and then a further 6 to 9 months before a new hire reaches the same output as the person they replaced. Oxford Economics research suggests full productivity takes around 28 weeks.
• Management time — your best people are usually the ones who train the new hire. That takes them away from their own work, impacting three people at once: the trainer, their manager, and the trainee.
• Onboarding and training — the average UK business spends around £1,000 per employee on training alone. Add onboarding admin and software licences and it builds further.
• The salary premium — external hires typically demand 18–20% more than internal promotions. If your new recruit negotiates upward, you’re already paying more before they’ve started.

And that’s just the visible stuff. The costs you can’t easily put a number on are often just as damaging.

What are the hidden costs people forget about?

When an employee leaves, they take things with them that don’t appear on any invoice. They take institutional knowledge — how your systems work, the quirks of your key clients, the lessons learned over months or years. They also take client relationships. If a customer has dealt with the same person for two years and that person walks out, there is a real risk the customer follows.

Then there’s the effect on your remaining team. When someone respected leaves, people start asking questions. “Why did they go? Should I be worried? Is something going on?” That uncertainty quietly chips away at morale and engagement — and disengaged employees are less productive, more likely to be absent, and more likely to start looking themselves.

High turnover also damages your reputation as an employer. In a world where candidates research companies on LinkedIn before applying, a revolving door is visible — and it makes attracting quality people harder and more expensive next time.

Why do good employees leave in the first place?

This is the question business owners most often get wrong. The instinct is to assume it’s about money but research from McKinsey tells a different story. The top three reasons employees leave are that they didn’t feel valued by their organisation (54%), didn’t feel valued by their manager (52%), or didn’t feel a sense of belonging at work (51%).

Pay barely makes the top three.

The warning signs are usually there weeks or months before a resignation letter arrives- particularly with good performers, who disengage in specific ways most managers miss:

• They stop volunteering ideas or improvements in meetings
• They’re doing their job well, but no longer going beyond it
• A previously engaged team member goes quiet or withdraws from team conversations
• They stop talking about the future — no longer mentioning upcoming projects or longer-term plans
• They begin setting clearer boundaries around their time in ways they haven’t before

If you’re spotting these signs, don’t wait for the resignation letter. Have the conversation. A good one-to-one, handled well, can turn things around.

What actually keeps good people — and it’s not what you think

Most of what keeps your best people doesn’t require a large budget. It requires consistency, honest communication, and the willingness to have good conversations. Here are five things you can start doing right now:

1. Have proper, regular one-to-ones

Not a five-minute catch-up, but a genuine conversation about how someone is getting on, what they’re proud of, and what’s frustrating them. These conversations create the psychological safety that makes people feel valued — and they give you early warning when something isn’t right.

2. Be clear about career development

One of the most common reasons people leave smaller businesses is that they can’t see where they’re going. You don’t need a corporate career ladder — you just need a genuine conversation about what growth looks like for them, and a willingness to invest in it.

3. Acknowledge good work, publicly and specifically

A generic “good job” means little. “The way you handled that client complaint on Tuesday was exactly what we needed — thank you” means a great deal. Recognition that is specific, timely, and visible costs nothing and makes a significant difference.

4. Understand what culture actually means

Culture is defined by how people are treated when things go wrong, whether managers keep their word, and whether your team feels proud to work for you. It takes time to build and is damaged quickly when leadership behaviour contradicts your stated values. Your best people notice this first.

5. Ask your best people what would make them stay — and mean it

A direct, honest conversation with a top performer about their ambitions, frustrations, and what they’d change costs nothing and provides more insight than any exit interview ever will. Most business owners never ask. The ones who do are usually glad they did.

The cost of losing a good person is significant. But the cost of keeping them is almost always lower. The five steps above don’t require a big budget — they require consistency, honesty, and the willingness to have good conversations before it’s too late.

Frequently Asked Questions

How much does it cost to replace an employee in the UK?

Research by Oxford Economics and Unum puts the average cost at over £30,000 for employees earning above £25,000. For the average UK salary, Accounts & Legal estimate the figure at up to £12,000.

How long does it take to replace an employee?

Oxford Economics research suggests it takes around 28 weeks (approximately 6–7 months) for a new hire to reach the same level of productivity as their predecessor.

Why do good employees leave?

According to McKinsey research, the top reasons are feeling undervalued by their organisation, feeling undervalued by their manager, and a lack of belonging at work. Pay is rarely the primary driver.

What are the hidden costs of losing an employee?

Beyond recruitment fees and onboarding, key hidden costs include lost institutional knowledge, damage to client relationships, reduced team morale, and harm to your employer brand and future recruitment.

Can you prevent employees from leaving?

You can’t prevent every resignation, but most avoidable turnover gives warning signs weeks or months in advance. Consistent one-to-ones, genuine development conversations, specific recognition, and a culture of psychological safety all significantly reduce preventable exits.

About MJV Consulting

MJV Consulting provides specialist HR support to Small Businesses and Independent Schools in Horsham, Crawley, Haywards Heath, Burgess Hill and Guildford. We offer retained HR services, compliance audits, policy development, and HR systems implementation, helping businesses manage their people effectively without the cost of full-time HR staff. Contact us via email www.mjvconsulting.co.uk or 01403 916727 to discuss how we can support your business growth.

If you’d like to discuss your HR challenges or explore how we can support your business, contact us at MJV Consulting on 01403 916727 or email us at info@mjvconsulting.co.uk. We’re here to help small businesses across Sussex, Surrey and London build teams that thrive.