Employee retention is usually presented as a success.
A lower turnover rate.
Fewer resignations.
More people staying with the organisation.
But is staying always a positive sign?
Sometimes it is.
Employees stay because they are engaged, valued, well rewarded and can see a future with their employer.
But sometimes people stay because the alternative feels too risky.
And I think this distinction is becoming increasingly important in the current UK labour market.
The UK labour market is changing
The latest CIPD Labour Market Outlook, published in August 2026, paints a fairly cautious picture.
Only 62% of employers surveyed said they plan to recruit over the next three months, with most employers focusing on maintaining their current staffing levels. The CIPD’s net employment balance—the difference between employers expecting staffing levels to increase and those expecting them to decrease—remains close to a record low at +9.
The ONS is seeing a similar cooling in vacancies.
There were an estimated 707,000 vacancies in May–July 2026, down 6,000 on the previous quarter and 19,000 compared with the same period a year earlier. There were approximately 2.5 unemployed people per vacancy.
At the same time, the number of payrolled employees has been falling over the past two years, with the latest figure standing at around 30.3 million.
None of these figures mean that the UK employment market is collapsing.
But they do point towards a more cautious labour market.
And when the market becomes more cautious, both sides can change their behaviour.
Employers become more cautious about hiring.
Employees can become more cautious about moving.
What happens when people stop moving?
Job mobility is an important part of a healthy labour market.
People change employers because they want:
- better pay;
- career progression;
- different working arrangements;
- new challenges;
- a better culture;
- greater flexibility;
- or simply a fresh start.
Employers benefit too.
When people move between organisations, they bring new ideas, experience and skills with them.
New employees can challenge established ways of working.
They can introduce practices they have seen elsewhere.
And movement between organisations creates opportunities for people to progress.
But what happens when employees start thinking:
“Maybe I should just stay where I am.”
Not because they are happy.
Not because they are engaged.
But because the market feels uncertain.
Retention isn’t always the same as engagement
This is something I think HR professionals should be particularly careful about.
Imagine an organisation reports that its voluntary turnover has fallen from 18% to 10%.
On paper, that’s fantastic.
But what if employees are staying because they don’t believe they could find another job?
The organisation might celebrate its improved retention figures while employees quietly disengage.
That isn’t necessarily retention.
It could simply be inertia.
And there’s an important distinction between:
“I want to stay here.”
and
“I don’t feel confident enough to leave.”
The numbers might look identical.
The employee experience isn’t.
What does this mean for employers?
There is an understandable temptation for employers to see lower turnover as good news.
In the short term, it can be.
Recruitment costs are lower.
Vacancies are easier to manage.
Knowledge stays within the organisation.
Teams remain stable.
But there is a potential downside.
If people stop moving, organisations may lose some of the healthy competition for talent that encourages employers to improve.
When employees have alternatives, businesses need to think carefully about:
Why should someone choose to work here?
That question becomes much easier to ignore when employees feel they have nowhere else to go.
And there is another side to this
The current environment is also making employers more cautious.
The latest CIPD research shows that employer confidence remains close to record lows, while recruitment intentions remain subdued.
That creates an interesting cycle.
Fewer vacancies → fewer opportunities → employees become more cautious → fewer people move → organisations experience lower turnover.
From an HR perspective, that can look deceptively positive.
But a labour market with low movement isn’t necessarily a healthy labour market.
Could job mobility actually be good for employers?
I believe it can.
We sometimes talk about employee turnover as if all turnover is bad.
It isn’t.
Of course, losing a high-performing employee who has been with the organisation for years can be costly.
But organisations also need healthy movement.
People leave.
New people arrive.
Employees progress.
Skills move between businesses.
Careers develop.
And organisations are exposed to new ideas.
There is a point at which trying to retain everyone becomes counterproductive.
A healthy organisation isn’t necessarily one where nobody leaves.
It is one where people want to stay for the right reasons.
So what should HR be measuring?
Perhaps we need to look beyond the headline turnover figure.
Instead of simply asking:
“How many people left?”
we should also be asking:
Why are people staying?
Are they:
- engaged?
- progressing?
- well rewarded?
- supported by their manager?
- satisfied with their work?
- confident about their future?
Or are they staying because:
- the external job market feels uncertain?
- they don’t think they could find anything better?
- they are worried about financial security?
- they don’t want to take the risk of changing employer?
Those are very different situations.
My perspective
I don’t think employers should be trying to prevent people from leaving.
They should be trying to create an organisation people don’t want to leave.
There’s an important difference.
In the current labour market, lower turnover may look like a positive outcome.
But I’d encourage HR teams and business leaders to look underneath the number.
If people are staying because they are genuinely committed to the organisation, that’s something to celebrate.
If they are staying because the labour market makes them afraid to move, we shouldn’t confuse that with engagement.
And I think this matters beyond individual businesses.
A healthy economy needs people to be able to move, progress and take opportunities.
Employees need the confidence to change jobs when the right opportunity comes along.
Employers need the confidence to recruit and invest in new people.
And organisations need a healthy flow of skills and experience between them.
The question I’d like to leave you with
Perhaps instead of asking:
“How do we retain our employees?”
we should sometimes ask:
“Why are our employees staying?”
Because there is a big difference between retention and reluctance to move.
And as the UK labour market becomes more cautious, I think that distinction is going to become increasingly important.
What do you think?