With job seekers facing one of the toughest markets in years, employers might assume they can worry less about keeping workers from heading for the exits. New data suggests otherwise.
A Workday report released today finds that employee retention is eroding across industries, even at companies that are still growing headcount. Nearly one-third of employees surveyed said they’re likely to look for a new role externally in the next 12 months. Put another way, roughly two employees are weighing an exit for every one who accepts a job at a company. And some two-thirds of employers saw people staying for shorter stints this year than last year.
What’s driving the retention slide? Phil Willburn, Workday’s vice president of people systems, intelligence and support, points to two problems: employees aren’t seeing career progression, and they don’t understand where the company is headed. Workday found that communicating a clear strategy is one of the most powerful levers leaders have to improve how employees feel about the workplace. Yet it is also the only factor Workday measures that has flatlined since 2021.
Trust in a time of uncertainty may also be at play. Employee trust in colleagues, managers, and CEOs has fallen to a record low, according to Edelman’s latest Trust at Work study, which will be released tomorrow. Only 66% believe they are paid fairly for the work they do, and 61% believe there are many opportunities to move up in their organizations, the study found.
What makes this moment unique, Willburn says, is that workers are dealing with economic uncertainty and AI fear at the same time. “When you compound those two together with many companies having a squishy AI strategy, it creates worker anxiety,” he says. “Workers already know that their jobs are changing, and they want their employer to step in and help with that transformation.”
Even workers who choose to ride out the uncertainty aren’t happy about it. Workday found that those employees are less likely to recommend their employer—a warning that a weak job market can keep people in their seats without making them more committed to the company.
So what can HR leaders do?
Willburn says it starts with a candid acknowledgement that work is changing and explaining how AI will transform employees’ roles. Leaders then need to lay out a clear strategy for how the organization plans to compete in an AI-driven economy and what that means for the people working there.
The final step is to give employees agency over their career progression. At Workday, for example, employees have access to a personalized AI coach designed to help them identify new skills and potential career paths. Once they identify a route, the company provides up to $2,500 to pursue relevant development.
Written by Kristin Stoller for Fortune as “The job market is brutal. But nearly 1 in 3 workers still want to quit” and republished legally through syndication agreement with Reuters Connect.
