Seven Employee Turnover Trends and Predictions for 2023

The job market has been permanently altered by the Covid pandemic. Today, workers expect a lot more from their employers and aren’t afraid to quit a role they don’t think ticks all the boxes for them.

But things might be set to change this year, with economists putting the chance of a recession at 61%. Which means there’s a good chance we’re in for more seismic changes to the job market.

Here’s how the early data suggests the job market is going to shape up in 2023 – and how you can expect that to impact turnover in your organization.

How will the job market look in 2023?

All the data points towards the job market slowing down in the US this year, regardless of a recession. The unemployment rate is predicted to jump from 3.7% to 4.6%, while employers are predicted to advertise an average of just 42,000 jobs each month compared to around 400,000 that were being listed each month in 2022.

Wage growth is expected to slow down, too. While the wages of Indeed job listings grew 6.3% year-over-year in December 2022 – more than double December 2019’s measurement of 3% – that’s a slight drop from November’s 6.5% rate and substantially lower than March 2022’s 9% pace. 

If unemployment continues to rise and wages begin to stagnate, changing jobs will be a much less attractive prospect for employees across the board. So, if the early signs are a good indication of what’s set to come in 2023, you can expect voluntary turnover rates to drop in your business.

Will the Great Resignation continue in 2023?

While we seem to be trending towards a slower job market, that isn’t necessarily going to spell the end of the Great Resignation. The bar for what workers consider a good job has been permanently raised. And that’s reflected in the most recent data: 3% of private sector workers quit their job in November 2022 – 16% higher than the 2019 average. That means your unhappy employees are still 16% more likely to quit than they were before the pandemic.

And despite talk of a looming recession, 95% of American workers feel confident about their career prospects in 2023 and a massive 61% are thinking about quitting this year.

So while voluntary turnover might slow down this year – especially if we’re plunged into a recession – you shouldn’t expect it to return to pre-Covid levels.

Try Assembly to get all the tools you need to track your employee turnover rate – and launch a strategy to improve it.

Are employee turnover rates increasing?

While voluntary turnover rates have dropped from the highs they saw when the global economy reopened after the pandemic, they’re still comfortably above pre-pandemic levels – and actually slightly on the rise according to the most recent data. 

Because workers are still so comfortable quitting jobs they’re not happy in, employers are a lot less likely to let the workers who do stick around go. November 2022 was actually the 21st straight month that the US layoffs rate was below its all-time low prior to 2020. 

Of course, whether voluntary turnover rates continue to rise or start dropping to pre-pandemic levels depends on whether we do end up in a recession. But if things stay as they are now you shouldn’t expect your teammates to be any less quick to quit if they don’t think their job is a good fit for them.

How to retain employees in 2023

If the employee turnover trends for the start of 2023 are anything to go by you certainly shouldn’t be resting on your laurels if you want to retain your top performers. Here’s a handful of things you need to be sure to bake into your employee retention strategy if you want to keep your best workers on the payroll. 

Make inclusion and diversity a priority

In 2023, diversity matters to your employees a lot more than you might think. 

In fact:

• 76 percent of workers say a diverse workforce is an important factor for them when they’re evaluating job opportunities and companies. 
• 80 percent think inclusion efforts are an important factor when choosing a company. 
• 13 percent of employees even monitor how often senior managers discuss diversity and inclusion in meetings.

Despite how important it is to your people, nearly half of respondents to one study said their organization could improve the diversity of gender, race, and ethnicity of its employees.

If you’re not taking steps to make your organization as diverse and inclusive as possible in 2023 then your staff retention rates are almost certain to suffer.

Make sure your employees are engaged

Fail to keep your employees engaged and they’re likely to start heading for the exit these days. 

Don’t believe us?

Did you know:

• Engaged employees are 87% less likely to leave their job than their disengaged teammates?
• Over one-third of disengaged employees are actively applying to new jobs, compared to only 5% of engaged employees?
• 90% of engaged employees intend on working at their organization for the next year, compared to only 47% of disengaged employees?

The fact is: If one of your teammates’ work doesn’t engage them then they’re probably not going to stay a teammate for long. So, make sure to regularly check on whether your people feel like they’re doing work they’re good at, enjoy, and makes use of their unique talents through engagement surveys and asking the right questions in one-to-ones.

Book a demo of Assembly to get access to all the tools you need to boost employee engagement in one place.

Embrace remote working

Remote work is here to stay.

In fact:

• 9.8% of job searches made on Indeed mentioned remote work in September 2022 compared to just 1.7% in September 2019. 
• A massive 71% of employees open to looking for a job aren’t happy with how flexible their current organization is willing to be.
• 56% of remote workers would look for a new job if their company asked them to the return to the office

If you fail to embrace telework then don’t be surprised if your people start leaving for organizations that do.

Make your employees’ health and wellbeing your priority

If your company isn’t taking its employees’ wellbeing seriously then its retention rates aren’t going to make for pretty reading in 2023.

In fact, 62 percent of workers say employee wellbeing support and benefits are a top priority when applying for or considering their next job.

So, be sure to:

• Be careful not to put so much on your employees’ plates that they need to regularly work overtime to get it all done (a surefire recipe for burnout).
• Encourage your people to take real breaks rather than work through lunch.
• Foster an open and inclusive culture where your teammates feel comfortable speaking up if they’re not happy at work without fear of losing their job.
• Set time aside during each one-to-one to check in with your teammates and see how they’re doing.

Tick these boxes and you’ll leave your people feeling looked after rather than looking for the door.

Try Assembly to see how easy it can make taking the pulse of your employees’ wellbeing.

Conclusion

Employee turnover costs are more expensive than you think. Keep yours down by keeping a close eye on the key job market trends we’ve highlighted here – and by implementing the tried-and-tested retention strategies we’ve recommended, too.