January and February often bring an unwelcome trend for many businesses: a spike in employee resignations. After the reflection and reset that comes with the festive period, employees reassess their careers, and some decide it’s time to move on. For small to medium-sized businesses (SMEs), early year resignations can be particularly disruptive, impacting productivity, morale, and recruitment costs. The good news? With the right HR strategies in place, many early departures are preventable.
Why Do Employees Resign Early in the Year?
Understanding the root causes is the first step to reducing turnover.
1. New Year Reflection – the start of the year prompts employees to think about job satisfaction, progression, and work-life balance. If expectations aren’t being met, they may start looking elsewhere.
2. Post-Christmas Burnout – the end-of-year push, combined with returning to work after the holidays, can amplify feelings of stress or disengagement.
3. Delayed Decisions – many employees postpone resigning until after receiving bonuses, completing projects, or simply “getting through” December.
4. Competitive Job Market – January typically sees a surge in job adverts and recruiter activity, making it easier for employees to explore new opportunities.
The Cost of Early Year Resignations for SMEs
For UK SMEs, losing staff early in the year can have a significant impact. There are increased costs around recruitment and onboarding, together with a loss of skills and knowledge. Team morale can be impacted and disruption to business plans and client delivery may follow. According to UK HR benchmarks, replacing an employee can cost anywhere from 6–9 months of their salary, making retention a far more cost-effective strategy.
How to Tackle Early Year Resignations
Rather than waiting for exit interviews, proactive employers hold stay interviews in January and February. These informal conversations help you understand motivations, frustrations, whether staff feel supported and valued and what might cause them to leave. For managers, this is a powerful retention tool — especially when paired with genuine follow-up action.
The start of the year is an ideal time to assess workload distribution and wellbeing initiatives. Ask yourself:
Are certain roles consistently overstretched?
Do managers recognise early signs of burnout?
Are flexible working arrangements being used effectively?
In the UK, flexible working is no longer a “nice to have” — it’s a key retention factor, particularly for experienced employees.
One of the most common reasons employees leave is a perceived lack of progression. Revisit development plans, communicate training budgets and opportunities and clarify promotion pathways. Employees don’t always expect immediate promotion, but they do want clarity, investment, and honesty.
Line managers play a critical role in whether employees stay or go. Ensure managers are confident having performance and wellbeing conversations, trained to manage conflict and supported by HR policies and guidance.
While pay isn’t everything, it still matters, especially in a competitive labour market. Benchmark salaries, review benefits that genuinely matter, refresh reward initiatives and communicate with transparency. Benchmark salaries against UK market data
If newer hires are leaving early in the year, it may signal an onboarding or cultural issue. Check whether expectations are set clearly from day one. Find out whether new starters feel connected to the business. Early engagement has a direct impact on long-term retention.
When to Seek HR Support
If early year resignations are becoming a pattern, it’s often a sign that deeper HR issues need addressing, from leadership capability to policy gaps or engagement challenges.
Working with a UK-based HR consultancy can help you identify root causes of turnover, implement practical compliant HR solutions, support managers and protect your business.
