Employee Confidence Remains Sluggish

Employee confidence was mostly unchanged in September, according to the latest data from the Glassdoor Employee Confidence Index. The share of employees reporting a positive six-month business outlook rose ever so slightly to 47.7% in September 2024, up from 47.6% in August. Employee confidence remains sluggish as the summer ends. While the recession fears from 2023 have faded, employee confidence has only improved modestly over 2024. 

What are the implications of weak employee confidence on retention and turnover? In a strong job market, employees who don’t believe in their employers are likely to look for a new job at a company that offers better prospects. In fact, Glassdoor data shows that employees who rate their employers’ business outlook negatively are more than twice as likely to apply to a new job on Glassdoor as employees who rate the outlook positively. 

But in a softer job market with sluggish hiring, many of these dissatisfied employees are unlikely to be able to find a new job. The BLS data for August shows that the hires rate has fallen to 3.3%, comparable to 2013 levels and similarly, the quits rate is down to 1.9%, comparable to 2015 levels. This could help explain weak employee confidence, as more employees are stuck at companies they don’t believe in. It also highlights a potential risk for employers—if the job market heats back up, turnover is likely to accelerate as dissatisfied workers leave. 

Employee confidence fell again for senior-level employees in September, dropping to 63% from 63.7% in August and now at the lowest level since October 2023. Softness in senior-level employee confidence is concerning as it may foreshadow cuts to hiring and investment plans. Over the last two years, confidence for senior-level employees has dropped 7.7 percentage points compared to 6.6 percentage points for mid-level employees and 4.4 percentage points for entry-level employees.