The UK labour market has cooled, but the retention problem has not gone away.

That distinction matters because when vacancies fall, it is easy for employers to assume that employees will stay put. Fewer open roles should mean fewer exits. A tighter market should give businesses more control. But retention created by a lack of alternatives is not the same as commitment. 

CIPD and Omni RMS research found that 69% of employers said competition for well-qualified talent had increased over the previous year, while 56% said talent had become harder to retain. The same research found that 41% of employers who recruited in the previous year had experienced new starters resigning within the first 12 weeks, while 27% had experienced new recruits failing to turn up on day one.

This is not a hiring issue but more a signal that the relationship between employer and employee has become more fragile. 

For years, organisations have tried to solve retention through a familiar set of interventions: better benefits, wellbeing programmes, flexible working, learning budgets, engagement surveys and improved onboarding. Many of these measures are useful. Some are essential. But they do not always answer the deeper question employees are asking, often quietly: is there a future for me here that is worth staying for?

The limits of the old playbook

The traditional employment contract was built around stability. Employers provided security, predictable progression and income. Employees provided loyalty, effort and experience.

That model has weakened. Employees today have more visibility into how businesses create value. They see founders build equity wealth; they see investors participate in upside; they understand that long-term financial rewards are often created through ownership, not salary alone.

Yet many organisations still reward people through structures designed for a different era: annual salary reviews, discretionary bonuses, promotion cycles and benefits packages that rarely change the employee’s relationship with the business itself.

The result is a growing contradiction: People are asked to think like owners, act commercially and contribute to long-term value creation, but are often rewarded like short-term participants. It’s not an issue caused by culture but alignment.

Engagement is still weak

Gallup’s latest global workplace research found that only 20% of employees worldwide were engaged at work in 2025. In the UK, the figure was 10%, below the European average of 12%. This is despite years of investment in engagement, culture and employee experience.

The issue is not that these things do not matter. Good managers, healthy cultures, flexible working and wellbeing support all affect retention. But engagement cannot be separated from economics. Employees are more likely to stay when they can see how their work matters, how their career can develop, and how they can participate in the success they help create.

CIPD’s Good Work research points in the same direction. Workers who say work has a negative impact on their mental health are significantly more likely to say they expect to quit. Job quality, progression, wellbeing and trust are all part of the retention equation. This is where many strategies fall short. They treat retention as a series of benefits rather than a system of commitment.

What ownership teaches us

Ownership is not the answer for every company. But it provides useful evidence of what alignment can change. Research from the Employee Ownership Association, Ownership at Work and the University of Stirling found that employee-owned businesses are 8% to 12% more productive on a gross value added per employee basis than comparable non-employee-owned firms. The same research found they return twice as much in bonuses and dividends to employees and are five times less likely to make people redundant. Those numbers matter because they suggest something deeper than goodwill.

When people have a genuine stake in the future of the organisation, their behaviour changes. Decisions become more long term,  collaboration improves. people are more likely to think beyond their own desk, team or annual bonus. This does not mean every business needs to become employee-owned. Nor does it mean every employee needs shares. But every organisation should ask whether its retention model creates real alignment between individual effort, company performance and long-term reward.

A better retention test

The next generation of retention models will not be built around perks alone. They will be built around clarity, progression, participation and trust. HR and recruitment leaders should be asking five questions.

• Can employees see what the organisation is building?
• Can they understand how their work contributes to it?
• Can they see a credible path for their own development?
• Can they see how success is shared?
• And do they trust leadership to follow through?

If the answer to any of those questions is weak, no benefits package will fully compensate. This matters most in knowledge-led sectors, where the most valuable assets are relationships, judgement, expertise and trust. Those assets cannot be locked inside a business. They walk out of the building every evening.

The best people do not only want to be retained but want to be part of something that compounds: commercially, professionally and personally. That is why retention should no longer be treated as a defensive HR function but more as part of company design.

The question is not how do we stop people leaving but, why would ambitious people want to build their future here? The companies that answer that question well will have an advantage that is difficult to copy.

Bio

Scott Ellam Founder & CEO, Connecting Excellence Group PLC (AQSE: XCE | OTCQB: XCELF)

Scott Ellam is the Founder and CEO of Connecting Excellence Group PLC (XCE), a UK-listed international executive recruitment group with an integrated Bitcoin treasury. XCE builds profitable, international recruitment companies and uses Bitcoin as a long-term reserve asset to strengthen its balance sheet, align incentives, and compound value over time.

He founded Spencer Riley, XCE's flagship operating business, in 2014, which places senior leaders into roles across professional services, business consultancy, life sciences, automation, engineering, AI and data - sectors largely uncorrelated to Bitcoin. The business generates over 70% of its revenue overseas and has recently opened a dedicated Bitcoin executive recruitment division.

XCE launched it’s Bitcoin balance sheet in 2021 within a private business, which became public in December 2025. The business is a people driven operating platform uniquely designed to grow as a direct result of its Bitcoin treasury: XCE uses Bitcoin-backed, performance-based share options to attract revenue-generating talent and to acquire cashflowing competitors, both of which strengthen the treasury and fund further growth.

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