How does a strong economy affect employee retention?

What are the talent risks of a buoyant jobs market?

 

February 8, 2018

Despite political uncertainties over the past year,an workers are actually much more positive than they were 12 months ago, according to our latest research The Workforce View in 2018. In fact, we found that the proportion of employees feeling optimistic about the workplace over the next five years has increased from 78% to 79%. Perhaps a much strongeran job market has something to do with this optimism - in 2016 the employment rate stood at 71.1% which is the highest rate ever recorded for the EU

But what impact does a strong employment market have on your workforce? What risks does it pose to retaining your talent and how can you overcome them? We take a look…  

 

Loyalties are shifting

When European employees were asked how long they think they will remain at their current organisation, 13% said they were looking to leave within a year. What’s more, only a quarter (26%) intend to stay for the rest of their working lives. While it has long been identified that a ‘job for life’ was a thing of the past, if employees have an abundance of opportunity at their doorstep they are likely to consider moving much sooner. It goes without saying that higher employee churn means higher costs for an organisation – and if employees can be persuaded to stay, these are avoidable costs.

 

Going their own way

These days, the threat to retaining your workforce does not only come from competitors in your market given that over one in five employees (15%) say they are actively considering self-employment and/or freelance work. Similarly, you could lose your best talent to other nations with 6% of European employees actively considering moving abroad for work in the next two years and a further 27% saying they would consider it. With a stronger employment market, workers may be more inclined to take the plunge into exploring new way of working and new locations.

 

Stress levels are rising

Despite having a slightly more positive outlook on the workplace in general, alarmingly, nearly one in five respondents (18%) say they endure stress daily and three out of ten (30%) feel so stressed that they are considering finding a new job. With 14% of employees across Europe thinking their company has no interest in their mental wellbeing; it is perhaps no surprise that high levels of stress result in high levels of attrition. A wide selection of recruitment alternatives, combined with the lack of trust in an employer to respond to stress levels, will make an employee’s decision to leave much easier.

Obviously a buoyant employment marketplace brings hiring potential for your organisation as well, but it would be foolish to disregard the risks it carries. It creates an ecosystem that encourages employees to look elsewhere – attrition often caused by some of the issues identified here. While these problems may be unavoidable entirely, levels can be reduced. Delivering on your promises to enable employees’ career development, scope to manage their own careers, international opportunities and wellbeing support are just some of the things you can do to respond.

To find out more, and about some other challenges facing the workforce, have a look at The Workforce View in 2018

 

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What are the talent risks of a buoyant jobs market?

Despite political uncertainties over the past year, European workers are actually much more positive than they were 12 months ago, according to our latest research The Workforce View in Europe 2018. In fact, we found that the proportion of employees feeling optimistic about the workplace over the...