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.
Kristin Stoller
Editorial Director, Fortune Live Media
kristin.stoller@fortune.com
Fortune Office Hours
This week, Karina Young, vice president of people at performance management software company 15Five, answers your burning workplace questions. Responses have been edited for length and clarity.
Q: Our company is headquartered outside the U.S., with a small U.S.-based workforce. One of them has been on extended sick leave, the team is stretched covering the work, and leadership wants to part ways. My understanding is that U.S. employment is “at-will”—either side can end it at any time, no reason needed. That’s what makes the U.S. different, right?
It seems straightforward, but something about terminating someone while they’re on sick leave is nagging at me, and I can’t tell if I’m overthinking it. Are we in the clear—or is at-will not what we think it is?
A: Nothing is ever as simple as it seems with employment law, and your HR Spidey senses are on high alert for good reason. Ending someone’s employment has serious financial and legal implications if done without proper risk mitigation.
Your definition of “at-will” is correct but incomplete. It is not a free pass for companies to fire at whim without consequences because the U.S. also has numerous protections for workers to avoid discriminatory treatment, especially for workers in protected groups like those with known medical conditions.
Do a legal review with your employment counsel before making a termination decision. And please don’t just put this into an LLM and hope it’s right. This is important enough to warrant local expertise who can review all the pieces that must be considered and help you find a path for exiting this worker that is lawful, humane, and keeps your business from serious risk.
Assuming you’ve done all of that, that nagging feeling is something else really important. It’s your humanity— the part of you that has to face hard conversations, make difficult decisions, and meet people at some of the lowest points in their lives. Even when it’s heavy, my advice is to never, ever lose that feeling. It’s what protects you from becoming numb to the hardest parts of this job.
Have a workplace situation that you’re unsure how to navigate or a scenario worth unpacking? Send it our way anonymously via this form.
Watercooler
A round-up of the most important HR headlines from Fortune and beyond.
Two-job job. Some 61% of workers say they are performing the responsibilities of more than one role. Fortune
Criticism critique. Gen Z craves gentle, real-time feedback. Managers are turning to consultants and AI bots for help. Wall Street Journal
Habitual hoppers. How can gig workers build a career when they bounce from job to job? Washington Post
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: fortune.com
