What the Newest Data Tells Us About Keeping Your Best People

Over the last several years, HR teams working to retain top talent through traditional employee engagement strategies faced challenges as those efforts often missed the mark. Employers rode a wild labor market roller coaster since 2020. After a decades-long economic expansion, the initial phase of the pandemic upended business operations, driving historically high unemployment. By 2021, the job market began to rebound — adding 4.5 million jobs in 2022 alone.¹ But employees' priorities and employer expectations had changed, sparking The Great Resignation and a race for talent.

To counter the worker deficit, employers focused on retaining existing talent through employee engagement strategies. Under more typical economic circumstances, engagement strategies would have helped retain a desirable group we call "seekers." While highly engaged and satisfied with their employers, this group can be tough to retain when they don't achieve their career or personal goals at the pace they expect.

Earlier employee engagement strategies didn't retain top talent, but that's changing

Gallagher data from 2021 showed that engagement and retention drivers profoundly diverged in response to pandemic-driven economic instability. Instead of a set of common workplace issues that created both engagement and retention, employers needed two very different strategies throughout the pandemic period. As a result, HR leaders who continued to pursue only engagement-focused drivers risked losing more than a quarter of their most engaged employees — the seekers.

More recently, recession forecasts increasingly point to expectations for a delay or soft landing. As the economy becomes less volatile, employee engagement and retention drivers have begun to converge once again — including the strongest drivers. That's wonderful news for HR leaders who now can focus on activities to drive both employee engagement and retention — maximizing resources and competitiveness.

While the number of seekers has declined, the job market continues to exceed expectations. This situation puts organizations at risk of losing their best employees. Highly engaged seekers know their market value and will pursue a new position if their current employers fail to meet all their needs. As Gallagher data underscores, talent retention remains employers' top organizational and HR priority.² At the same time, leaders know that employee engagement is important to overall organizational wellbeing.

In this follow-up to our 2022 employee retention drivers report, we explore ways the changing economic environment influences employee engagement and retention drivers, and what the realignment of those drivers means for an effective employee retention strategy.

Understanding your seeker population is the first step

Get Gallagher's whitepaper, Engagement Still Won't Retain Top Talent. Gain an in-depth look at key employee groups within your workforce and their interests and how to construct an employee engagement and retention strategy grounded in tactics that address evolving economic conditions.