Employee Retention Rises as Job Market Optimism Declines

Employee retention remains strong for the next six months, continuing a trend that started in early 2025, according to Eagle Hill Consulting’s latest Employee Retention Index. This trend reflects the broader shift in job seeker behavior, with the employee retention index increasing 0.4 points in Q2 to reach 102.9. However, optimism about the job market saw a sharp drop its steepest since 2023 setting a record low for worker confidence. “This decline isn’t just a statistic,” said Melissa Jezior, CEO of Eagle Hill Consulting. “For the first time, this indicator has fallen for two straight quarters. It’s now at its lowest since we introduced the index.”

Baby Boomers and Men See Steepest Drops in Confidence

The downturn affected nearly all worker groups, but baby boomers and male employees experienced the most significant confidence declines. According to Gartner, fewer job seekers are receiving multiple offers or withdrawing after accepting roles further signs of a cooling labor market. Still, companies face ongoing challenges in attracting new talent, as applicants stay in current roles and become more selective.

Gen Z Stays Put but Signals Lower Engagement

Eagle Hill’s index shows Gen Z employees are the least likely to leave their jobs in the next six months. For two quarters in a row, Gen Z has shown increased trust in their employer’s future and satisfaction with pay. However, engagement remains low, with retention scores dropping more sharply than other groups. Sentiment toward workplace culture declined most among Gen Z. “This trend signals that confidence in job opportunities is slipping across U.S. workers,” Jezior explained. “Factors like AI and automation, along with economic uncertainty, are fueling the decline.” Yet, Jezior believes businesses can act now. “Organizations should treat this market confidence dip as an opening to invest in current employees,” she said. Although employees may hesitate to leave, many remain open to reskilling or internal role changes.

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News Source: Hrdive.com