Why retention is key to business growth

The Employee Rights Bill has been in the news again recently following the resignation of Angela Rayner. The former deputy prime minister was the driving force behind the bill and her resignation has led to suggestions the bill could now be watered down.

However, with the government still insisting otherwise, the point at which new employees gain the right to claim for unfair dismissal is likely to change in the next few months and could be as early as ‘day one’. Irrespective of what happens with the bill, for small businesses, sustained growth depends on having the right senior team in place. But, in today’s competitive employment market finding and recruiting strong senior talent is difficult – and getting it right takes time. That makes retention not just a nice-to-have, but essential for business growth. 

The true cost of recruitment

Recruiting senior staff is rarely straightforward. For many business owners, particularly those in start-up or early growth phases, this may be their first experience of senior-level hiring. It is easy to underestimate the time involved.

From my work with SMEs, I find that identifying the right candidate typically takes three to four months, followed by another three to six months to fully onboard them. In reality, it can take at least half a year before a new senior hire is delivering real value.

Getting recruitment wrong can derail growth plans, damage morale, and even delay exit timelines and business valuations. And with the possible introduction of new “day one rights” employment legislation, making sound recruitment decisions will become even more important. Employers will no longer have a grace period to assess whether someone is a good fit.

Why retention is part of recruitment

Retention doesn’t begin after someone joins – it starts during the recruitment process. Every step of the journey should link back to business objectives.

Clear job descriptions, defined objectives and KPIs ensure alignment between the role and the growth strategy. A well-crafted job advert, combined with careful screening and assessment – such as asking candidates to present how they’d approach their first six months – increases the chance of finding a strong cultural fit.

Compensation matters too. It’s not just about salary - bonuses, long-term incentives, and employee reward schemes can make a role more attractive. Incentives should drive the right behaviours, and ideally, any bonus scheme should pay for itself. A financial adviser can help you design effective employee incentive schemes and build employee benefits packages that improve wellbeing.

Structured onboarding builds loyalty

Once you have recruited the right person, the first weeks are critical. Too often, new starters are left with little structure beyond a login and a laptop.

Instead, I recommend that businesses should invest time in a 12-week onboarding program that clearly sets out responsibilities, introduces key relationships, and provides early wins. Regular check-ins, a formal review at the end of onboarding, and another at six months help embed expectations and prevent drift.

By linking reviews back to the job description, agreed objectives, and the candidate’s own interview plan, business owners can provide constructive feedback while reinforcing alignment with the wider growth strategy.

Leadership and engagement matter most

Ultimately, retention comes down to leadership and cultural fit, especially in a small team. Employees now expect as much from their employers as employers expect from them – a major cultural shift compared to previous generations.

If you don’t dedicate time to leading, mentoring and supporting your people, you risk losing even your best recruits. Even the best new recruits will underperform or move on if you don’t make the time for them. Strong leadership and engagement are the foundation of loyalty, performance, and long-term retention.
Retention fuels growth

In small businesses, every team member matters. A strong senior leader can transform performance, while a poor fit can stall momentum.

Retaining the right people reduces wasted recruitment costs, builds stability, and ensures the business stays on track with its long-term growth plan. Recruitment may be difficult, but retention is where growth is truly achieved. Make your next hire count.

Recruitment and retention don’t just hinge on leadership – the right financial planning can make your business more attractive to top talent.

If you’re looking to grow your business and retain the right team to drive it forward, speak to a financial adviser today. The right financial strategy can give you – and your employees – the confidence to build for the future.

We work in conjunction with an extensive network of external growth advisers and SME specialists, such as Elephants Child, who have been carefully selected by St. James's Place.  The services provided by these specialists are separate and distinct to the services carried out by St. James's Place and include advice on how to grow your business and prepare your business for sale and exit.

Where the opinions of third parties are offered, these may not necessarily reflect those of St. James's Place.