Talent cliff edge is imminent for UK businesses
UK organisations are facing a talent cliffedge as the outlook for the UK economy starts to brighten, with nearly half (49%) of employees saying they would feel more motivated to leave their jobs once the economy improves. That’s according to Workforce Pulse 2024, an annual study conducted by Europe’s leading HR software company for SMEs, Personio.
With interest rates lowered for the first time since 2020, signalling economic improvement, the research of over 2,000 workers and 1,000 HR decision makers in the UK suggests the beginning of the end of the “Big Stay”. Over half (53%) of employees plan to look for a new job in the next 12 months regardless of the economy – but concerningly for business leaders, 70% of this group feel spurred to do so by improving economic conditions.
Meanwhile, many businesses are aware that a wave of resignations may be on the horizon, but others may be set for a surprise. Almost half (49%) of employers expect employee churn to increase over the next twelve months, whilst 25% each expect churn to decrease or stay the same.
Lenke Taylor, chief people officer at Personio, said: “Persistent talent shortages mean hiring and keeping the best people is already a challenge for businesses today. And our Workforce Pulse report suggests that retention is about to become even tougher as economies improve. To effectively navigate these challenges, employers need to be proactive. Now is the time for organisations to look beyond talent strategies for the here and now, and think long term about how they can sustainably invest in employee experience, and ultimately their talent retention.”
Job fulfilment critical for employees
Suggesting this pending talent problem is borne of an engagement crisis, 60% of employers are concerned that employee engagement has deteriorated over the past year.
The data suggests a lack of fulfilment at work could be triggering low engagement and a potential retention drop off. Nearly half (47%) of employees stated that work was no longer a priority for them in life, while a third (33%) would be willing to take lower salaries in favour of a more interesting and engaging job.
Further demonstrating a sense of dissatisfaction, nearly half of employees (45%) say they want to switch to working in a new career or industry.
Work-life balance a top priority
However, the research also highlights a clear path for organisations wishing to retain talent. Six in ten employees (60%) cite a good work-life balance as a top priority in their job, only ranking below good salary/bonus (65%). And almost half (47%) feel that work is not a major priority for them in life.
Tied to work-life balance, it’s clear that people prioritise a pleasant experience at work. Low levels of stress (45%) and a friendly company culture (44%) are preferred to career development factors such as opportunities to progress (32%) and making an impact (27%).
Lenke Taylor continued: “Organisations should recognise that employees’ priorities greatly impact their relationship with work. The best employers are listening to what is changing for their workforce and are taking meaningful steps to unlock employee engagement. This could be through workplace policies, holistic benefits packages or career and skills development programmes. Employers that work with their employees to drive greater engagement will be better placed to navigate the latest shifts in workplace attitudes and needs as talent and productivity race up the agenda once again.”
