One in three (31%) SMB employees have quit their job because a colleague left, and nearly half (48%) would consider doing the same. With over half (52%) of Brits currently working in SMBs considering quitting in the next 12 months, and 10% actively looking for a new job, the turnover repercussions could be huge for SMB employers. 

Small teams, strong ties, and big fallout

For SMBs, the effects of turnover go beyond losing a single team member; they disrupt whole teams of close-knit people. Three-quarters (75%) of SMB workers say they enjoy their job because of the culture and purpose, and 77% report having close working relationships with their colleagues. Nearly as many (74%) say those connections have become genuine friendships extending beyond the office.

As a result, staff departures at SMBs are hard felt. 71% of employees say losing a team member feels like losing a friend, and 60% say a single exit has a significant personal impact. This is no surprise given that 62% of SMB employees say it’s the people around them who drive them to do their best work.

The resignation cost

The emotional impact of turnover is felt deeply within SMBs, not to mention the critical business consequences. One in seven (15%) SMB workers with hiring responsibilities say they’ve experienced a 40% turnover of their workforce in the past year, and 31% 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%) SMB workers with hiring responsibilities say delays in hiring are damaging morale and work-life balance, and 61% admit rising employee costs are forcing them to expect more from the people they retain. For 48%, the pressure is causing them to lose sleep worrying who’ll leave next. 

Culture, recognition and growth 

“In small businesses, even one resignation can have a disproportionate impact on output, morale and momentum,” says 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”

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