Employees are feeling increasingly confident about their career and future job prospects over the next five years. This means that employers will have to work increasingly harder to retain employees, as this increased job confidence could see them searching for better opportunities elsewhere. Plus, with employees feeling confident about their prospects, attracting new talent could become more competitive.
According to the Jobs Confidence Index, the confidence index for the last quarter of 2022 remained at 19.9, despite inflation and the cost of living making things harder for workers in the UK. Job search confidence and progression confidence rose by 1.6 points, suggesting that competition for talent and worker confidence was boosted, likely by recent skills shortages. This means that many employees are now in a position to ask for pay rises, and many are confident enough in their job security to look for better career opportunities, making employee retention more difficult than it has been previously. This research also shows that employee confidence in pay was also at a high.
The Wellbeing and Benefits Director at Partner&, Steve Herbet, explained that the current economic downturn has been different to previous economic downturns. For example, unemployment has remained low, suggesting that “that employees are in a far stronger position in remuneration negotiations”.
He went on to say: “This really matters, particularly as employees are also under financial pressure as a result of the cost of living crisis. It is therefore inevitable that employers will face a real battle to hang on to their talent until the candidate shortage eases.”
Robert Half’s Senior Managing Director of UK and Ireland, Matt Weston, stated that pay rises above inflation are not sustainable for a lot of companies, but talent could head elsewhere if plans to boost employee retention were not put into place.
He said: “leaders that find the balance between appropriate financial incentives and other attractive benefits, such as training and progression opportunities, will be the ones to beat the competition.”
Currently, financial stability is driving a lot of employees, as they need to feel confident about affording the essentials, even as prices continue to rise. This means that many workers will be looking for roles that guarantee an annual pay rise. If this isn’t an option in their current role, there’s a high chance that they will look for it elsewhere.
HR Advice and Consultancy Director at Peninsular, Kate Palmer highlighted that though staff will always have their salary as one of their priorities, working in an engaging and inclusive environment is becoming increasingly more important. A lot of people are less likely to look for another role if their wellbeing and development is being taken care of.