Hiring Trends Shift As Retention And Loyalty Decline

As 2026 dawns, the world of hiring is facing a paradox: while the number of job applications is surging, employee retention is slipping, and younger professionals are redefining what loyalty means in the workplace. According to the Employ Hiring Benchmarks Report, released on January 14, 2026, HR leaders are being urged to “plan for the unpredictable” as they navigate a labor market marked by both opportunity and volatility.

The Employ report, which analyzed data from 6,640 organizations across five industries, paints a nuanced picture of today’s hiring landscape. Applicant volumes have jumped by a striking 24% since 2024—rising from 207 to 258 applications per job—yet the time to fill positions has actually improved, dropping from 67 to 63 days. On the surface, it might look like a job-seeker’s market, but the story is far more complicated beneath the headlines.

Perhaps the most concerning trend is the drop in early retention rates, which have slipped from around 94% to just 85%. In other words, more new hires are leaving their jobs sooner—a reality that is echoed in a separate January 2026 study finding that 41% of workers are either actively looking for a new role or planning to do so this year. Among those aged 30 to 39, that figure climbs to a staggering 47%.

“Pay still matters to early career workers, as does salary transparency – but it’s no longer enough on its own,” said Nicola Weatherhead, VP of people operations and talent acquisition at The Stepstone Group, in an interview with HR magazine. For 81% of job candidates, salary remains the most important factor when choosing a role, and for those planning to move, 51% cite higher pay as their main motivation. But as Weatherhead notes, today’s workers—especially those just starting out—are seeking much more than just a paycheck. They want visible career pathways, regular conversations about progression, and real investment in training and development.

These findings are underscored by research from July 2025 by Gateway Commercial Finance, which surveyed over 1,000 U.S. employees. The study revealed that 58% of Gen Z professionals see their jobs as “situationships”—short-term, low-commitment relationships not expected to last. Nearly half of these young workers said they planned to leave their job within a year of starting, and almost as many felt ready to quit at any time.

Cris Beswick, an independent strategic advisor and author, offered a pointed explanation for this trend, telling HR magazine: “Gen Z aren’t commitment-phobic, but more commitment-sceptical. They’ve watched companies optimise for short-term efficiency, while destroying the very conditions that create meaningful work.” In his view, if organizations want to retain young talent, they must move beyond “innovation theatre” and create cultures that offer genuine autonomy and opportunities for real problem-solving. “Gen Z spots performative culture instantly. They want genuine autonomy to solve real problems; they want genuine innovation-led cultures.”

For HR leaders, the Employ report’s message is clear: don’t try to fix everything at once. Instead, focus on one or two high-impact changes that can create ripple effects throughout the hiring funnel. The report breaks hiring into five stages—attract and engage, screen, interview, select, and onboard—each with its own benchmarks that vary by company size and industry. For example, software and tech companies now attract an average of 369 applications per job, while manufacturing sees just 176. Enterprises are able to move candidates to interviews in about six days, compared to eight days for small businesses. But with greater scale comes new challenges: enterprises convert approximately 47% of screened candidates to interviews, while small businesses convert only about 24%.

Candidate experience remains a universal challenge. Despite having larger recruitment marketing budgets, enterprises score lowest in candidate experience, while mid-market and small businesses fare slightly better. The report suggests that scale makes personalization harder—even with bigger budgets. Industry differences also stand out. The hospitality sector moves fastest, averaging less than seven days to screen candidates and 40 days to hire, while software and tech roles take longer, with nine days to screen and 51 days to hire. Retail boasts the highest engagement rates at 7%, whereas business services lag at around 4%.

Diversity, too, reveals a mixed picture. Overall, applicant diversity improved from 41% to 46%. However, enterprises continue to see the lowest share of diverse applicants at just 27%, compared to 58% at small businesses. The report hints that employer brand perception may play a significant role in these disparities, suggesting that smaller companies may be more successful at reaching and attracting diverse talent.

Meanwhile, the challenge of keeping younger workers engaged and committed is not lost on employers. Kirsten Barnes, CEO of Bright Network—a career network for students and graduates—noted that many early exits are the result of “mismatched expectations.” She explained to HR magazine: “When the reality of a role doesn’t line up with how it was described, particularly around workload, overtime, pay or progression, younger employees are more likely to move on quickly.”

Weatherhead echoed this sentiment, adding, “Too often, employers offer strong development opportunities but fail to communicate them clearly, leaving younger workers feeling stuck or undervalued.” The solution, she suggests, is for employers to combine fair pay with clarity on growth, skills, and long-term prospects. Barnes also pointed out that more graduate employers are now engaging with talent earlier—sometimes from the first year of university rather than waiting until graduation. “Early engagement helps build trust and employer brand loyalty by giving early-career candidates a realistic understanding of roles, culture and progression before they apply, reducing the risk of mismatch later on.”

Supporting these observations, Totaljobs analyzed 21.6 million UK job vacancies from 2019 to 2025, spanning 23 industries and 21 major cities. Two surveys conducted in late November 2025 captured the perspectives of 3,000 UK workers and 1,000 recruiters and HR professionals, further highlighting the scale of the recruitment and retention challenge.

In the final analysis, the Employ report advises HR leaders to prioritize one quick win and one strategic initiative for 2026, instead of launching multiple projects at once. “The patterns you uncover are the blueprint for your 2026 hiring strategy,” the report concludes. For organizations hoping to attract and retain the best talent in an increasingly competitive market, the message is simple: focus on what matters most, communicate clearly, and invest in the long-term success of your people. In a year defined by unpredictability, clarity and authenticity may be the best strategies of all.