The Great Resignation has finally taken an extended leave of absence, but the Great Retention is stepping in with a new set of challenges for our bosses to navigate.
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The Great Resignation brought chaos to workplaces when droves of employees closed the office door on their old jobs and moved on to greener pastures.
Now, the latest official figures show the former job-switching trend is easing, with more workers putting down roots in their current jobs and giving rise to the Great Retention.
Australian Bureau of Statistics data for the 12 months leading to February 2024 shows approximately 8 per cent of employed Australians, or 1.1 million people, changed their employer or business.
This figure marks a decrease from 9.6 per cent in the previous year and matches the usual range seen in the five years prior to the pandemic.
The data also revealed while the decline was consistent across genders, it was more pronounced among men. Women's job mobility slightly surpassed men's, reversing a decade-long trend.
In the workplace, the ability to retain staff is often seen as a hallmark of excellent management.
That's usually because too much turnover can lead to disruptions, increased training and hiring costs, and a loss of institutional knowledge.
Yet it's not always job satisfaction that causes employees to hang on tight to their jobs and their bosses.
Other reasons include fear of change, complacency, misplaced loyalty, anxiety about the job hunt itself, or valuing the social connections established.
In the current context, low turnover is likely attributed to a turbulent economic climate characterised by inflation and rising living costs.
In such conditions, many employees become more risk-averse and are reluctant to seek new opportunities due to the uncertainty and potential financial instability associated with changing jobs.
When staff retention is high, those in charge often jump to the conclusion a high level of employee satisfaction exists within their workplace.
That might lead some employers to take their eye off the ball when it comes to maintaining a supportive workplace culture.
It's also true employees who feel compelled to stay in the same job for a prolonged period can experience decreased motivation and engagement.
They may feel stuck in a rut, with fewer opportunities for professional growth or advancement. This lack of stimulation can result in decreased productivity and a higher likelihood of burnout.
Another significant consequence of reduced job mobility is the potential stagnation of skill development.
When employees stay in the same role for extended periods, they may miss opportunities to acquire new skills or experiences that come with changing jobs.
On top of that, job changes are often accompanied by salary increases, as employees leverage new opportunities to negotiate better compensation.
When job mobility decreases, so does the frequency of these negotiations, leading to potential wage stagnation.
Over time, this can widen the gap between current wages and the rising cost of living, affecting employees' financial wellbeing.
It can also mean employers might feel less pressure to offer competitive salaries if fewer employees are looking to switch jobs.
Rather than assuming reduced turnover is entirely positive, employers should take several proactive steps to address the potential downsides of low turnover.
They should invest in continuous professional development and training programs to keep employees' skills current and relevant.
Where possible, and depending on the size of the workforce, employers should also create clear pathways for career advancement within the workplace to keep employees motivated and engaged.
Regularly reviewing and adjusting salaries and benefits to remain competitive is crucial, even when turnover is low.
Encouraging internal mobility by offering opportunities for lateral moves and new projects can also help mitigate the risks of skill stagnation and employee disengagement.
And fostering a positive and supportive workplace culture can help maintain high levels of employee satisfaction and productivity.
Employees feeling trapped in a job should also take steps to stay proactive in managing their careers.
This includes seeking out training and development opportunities, networking both internally and externally, taking on new responsibilities, negotiating for improved salary or benefits, and staying informed about industry changes.
By taking these steps, employees can mitigate some of the disadvantages of reduced job mobility and continue to grow and thrive in their careers, even during periods of economic uncertainty.
The Great Retention marks a new era where employees are staying put. It requires bosses to do their best to ensure stability does not lead to stagnation.
- Professor Gary Martin is a workplace and social trends specialist.
