Research done by talent solutions company Robert Half for their Jobs Confidence Index found that employees are feeling confident about career progression in the five years ahead. This insight means that employers will now need to increase efforts in talent retention as well as recruiting new employees.
Although the UK economy has been going through a downturn, which in turn has impacted workers negatively, in Q4 of 2022 they found that the confidence index remained positive. Further, they have also found changes in other aspects of job confidence that will affect recruitment and retention.
Jobs Confidence Index
The main takeaway from the research is that the jobs confidence index is still positive at 19.9. This suggests that even in a turbulent economy, the UK labour market remains strong. However, macroeconomic confidence has decreased due to high inflation and rising interest rates.
In terms of pay confidence, despite rising inflation and the UK experiencing the worst contraction in real earnings since early 2009, it has risen by 28.4 points. This is due to the observed rise in overall productivity and lower pay variance.
Overall, employment in the UK is still secure. The sense of job security among UK employees remains high. This is demonstrated by the continuous high ratio of job vacancies to unemployment.
Talent Retention in the UK
According to the most recent numbers by the Office for National Statistics (ONS), the total number of job vacancies between December 2022 to February 2023 decreased by 51,000 or 4.3% from the previous quarter. In December 2022, it was also reported that workforce jobs increased by 211,000 which reached record high numbers of 36.4 million.
The findings of the Jobs Confidence Index combined with the ONS data as well as the current economic state of the UK are now pointing employers in the direction of anticipating challenges in talent retention.
The cost-of-living crisis has largely affected workers across the country, with many now facing financial pressure as prices continue to rise. From this, a crucial element to retain talent in the current climate is to ensure financial stability.
Employers should now implement appropriate talent retention plans to avoid large-scale resignations that will affect company stability. However, it should be noted that long-term retention needs to come with development and progression opportunities as well as adequate financial incentives and other benefits.
A wise action to be made right now is for businesses to reconsider what they are offering to their employees. Right now, businesses should offer incentives and benefits that will ensure employees can fulfil their priorities to drive retention. Although it may be unattainable for many businesses to reward pay rises in line with inflation, there should be an improved financial incentive model that will guarantee annual pay increments. Additionally, the loyalty of employees can also be improved by maintaining good company culture.