The recruitment industry is facing significant challenges as what was once known as the "Great Resignation" has evolved into the "Great Retention." With economic uncertainty still looming, workers are increasingly choosing to stay put in their current jobs, leading to a downturn in employee turnover.
This "Great Retention" has been driven by several factors. The rate of employee attrition—workers voluntarily leaving their jobs—has decreased, particularly in sectors like professional services. Data from the Chartered Institute of Personnel and Development shows that the percentage of employees with less than one year of tenure has dropped to 16%, down from a peak of 18% after the COVID-19 pandemic. While this may seem like a small decline, it has significant implications for businesses.
A moderate level of attrition is typically healthy for companies, as it allows for fresh talent to rise through the ranks and keeps the organisation dynamic. However, when too few employees leave, it can lead to stagnation and increased wage bills, as senior staff remain in place longer. This has prompted some firms to implement subtle measures to encourage underperforming employees to move on.
Adding to the complexity, many companies have instituted hiring freezes or slowed down their recruitment efforts, further discouraging employees from seeking new opportunities. Job seekers are becoming more cautious, and employers are increasingly selective, extending interview processes and focusing on cultural fit.
As the job market continues to evolve, businesses must strike a balance between retaining valuable employees and ensuring enough fluidity to foster growth and innovation. The “Great Retention” may be challenging, but it also presents an opportunity for companies to rethink their strategies and adapt to a new era in employment.
