Mounting job confidence may impact talent retention

05 May 2023

Job confidence amongst UK employees is on the rise according to new research out this week. A total of 43% of workers said they feel confident about their career and progression prospects within the next five years, meaning businesses will have to pull out all the stops to retain existing staff and attract new talent, cautioned Robert Half’s economic confidence tracker. So, even despite inflation and the cost-of-living crisis negatively impacting Britain’s workers, the Jobs Confidence Index for Q4 2022 remained in positive territory with a reading of 19.9. In addition, there was also a rise in job search and progression confidence, reaching 1.6 points, signalling skills shortages were fuelling employee confidence and talent competitiveness, the report stated. 

Staff demands

The economic confidence tracker, compiled alongside the Centre for Economics and Business Research, warned organisations that workers were now positioned to demand better pay. Their increased search confidence and job security were also fuelling the challenges of talent retention. Indeed, the economic downturn has seen unemployment remain at ultra-low levels, “which means that employees are in a far stronger position in remuneration negotiations,” according to the wellbeing and benefits director at Partners&, Steve Herbert. “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,” Herbert continued. 

Salary confidence on the rise

These latest findings also revealed pay confidence was at its highest point since the beginning of last year. Considering inflation, pay confidence ticked up 28.4 points due to lower pay variance and heightened productivity. In addition, Britain registered the worst real earnings contraction since Q1 2009. Although above-inflation pay hikes weren’t sustainable for a large number of businesses, talent retention could be more difficult if plans are not put in place. Yet “those leaders that find the balance between appropriate financial incentives and other attraction benefits, such as training and progression opportunities, will be the ones to beat the competition on a longer-term basis”, said Matt Weston, senior managing director of UK and Ireland at Robert Half. With financial stability remaining the predominant factor for many workers, they are looking for positions that will guarantee an annual rise in pay. If this isn’t the case, they will more likely move on.