The “employer’s market” fallacy: Why retention still matters in 2026

While the spectacle of AI integration and the relentless march of technological progress dominate headlines, a quieter, more fundamental trend is shaping the future of the workforce: retention.

The core reasons employees stay at or leave an organization remain surprisingly analog. As we begin 2026, employees are scrutinizing the texture of their day-to-day, their work-life balance, and the transparency of their future within an organization.

The great employee question in the modern workplace has evolved from “What will I get paid for doing this work?” to “What will my life look like while I work here, and how will this company invest in me?” This desire for granular control over one's working life is fueling trends like microshifting, where employees hold a strong desire to actively manage their work hours, location, and focus, demanding a flexible framework that aligns with their personal needs.

The employer’s market fallacy

The idea that employers currently hold all the power has bred a hollow assumption. Let’s call it the "employer's market" fallacy. This line of thinking suggests that employees are staying put primarily because they have no other choice – that economic uncertainty and a tighter job market have granted employers overwhelming leverage. The data reveals a far more nuanced and precarious reality.

According to our employee experience data, long-term global attrition risk remains steady at around 10%, reflecting a larger group of employees who are anchored for the foreseeable future.

However, short-term employee commitment has been declining over the last several years. The number of employees actively planning their exit remains high across all regions.

This signals that while the most dedicated employees are staying, the broader workforce is in a state of high-alert fluidity, ready to move when conditions permit or expectations aren't met.

Thus, despite market conditions and employer leverage leading to less priority placed on the employee experience, more employees are ready to leave, not less.

Attrition risk hasn’t actually gone down

Looking ahead to 2026, we predicted that HR teams would pivot from setting attrition goals as a ceiling (maximum) to a floor (minimum). Essentially, with the reported job-hugging phenomenon, workplaces may need more openings from voluntary exits than they have available. Rather than trying to keep employees, they may even go as far as encouraging departures.

Amy Lavoie, VP of People Science at Culture Amp, warns against this. She says:

“While employers have more leverage at this time, they cannot stop investing in talent altogether. They must still identify, listen to, and invest in those people who are leaning into the organization’s success. Keep in mind that those top contributors are likely also your future leaders, and they will be the first people your competitors want to hire.”

What Lavoie points out is spot on and in line with our exit-reason data. Thousands of companies use Culture Amp to survey their employees at the time of exit to understand the “why” behind the move. And it turns out that a whopping 41% of employees state career growth as the reason why they’re headed for greener pastures.

Of course, career growth isn’t the only reason listed. Work-life balance remains the second-highest exit reason globally, accounting for 12% of all voluntary attrition, and compensation/benefits is a close third, accounting for 10%.

Each of these exit reasons has been stable in the top three for several years. These aren’t passing fads or anomalies. They show us the fundamental, non-negotiable baseline for why people leave companies.

And as we considered what the top three reasons have in common, we were struck by their collective simplicity: living.

Career, balance, and compensation shape lives and identities. They alter who employees spend time with, what communities they’re part of, and ultimately – who they are. Employees leave when they’ve decided they want something different, something they can’t get where they are now. And, while these are deeply personal drivers, they are fulfilled through a pragmatic exchange, and that’s where the transactional nature of work becomes clear.

Let’s get real: Work is inherently transactional

Employees aren’t at work only because they love their jobs. They wouldn’t do this work for free – nor would leaders. Work is inherently transactional, and at times when the balance of power shifts, employee and employer both start renegotiating their sides of the transaction.

Joanne Gladding, one of our People Scientists in APAC, says that when employers focus strictly on their side of the social contract, it may kick off a period of high dissatisfaction, low discretionary effort, and the type of passive external role searching that can result in more rapid attrition.

It’s true that employers can more explicitly demand peak performance in a high-leverage environment without offering a reciprocal commitment to the employee's future. And that is exactly what concerns employees most.

As a result, employee and employer end up in a “will they, won’t they” dance that is wildly out of sync. In a functional dance, the employee would step forward when the employer steps back and vice versa, but instead, we see them pulling away from each other. With each step back the employer takes, the employee also steps back. By deprioritizing retention, employers unintentionally encourage employees to step back instead of forward.

The dysfunctional dance reveals where leaders and employees are out of sync

This dysfunctional dance, where neither side can win without the cooperation of the other, is reminiscent of Squid Game. We all have a responsibility to avoid falling victim to the employer’s market fallacy.

Employees want to know that their company is invested in them, and this has a real impact on performance. Our research shows that employees are 21% more likely to be high-performing when they are actively developing new skills. This is a direct measure of how growth investment translates into business value.

But, as Amy Lavoie also points out, this tug of war between employees and employers can’t be solved by leaders alone. Employees also need to take initiative. For example, Lavoie has observed that, “some employees are acquiring proficiency in AI skills just because they want to – to add value but also to grow independently of their role. They are proactively investing in their own development, but they need the organization to match that energy with clear opportunities and career paths too.”

To reiterate, even in an employer’s market, retention matters. A company’s top-performing and highest-potential employees will be the first to leave. I know this. You know this. Everyone seems to know this.

And yet, workplaces are going leaner than ever. Employers are less concerned about retention, because they believe they have all the power right now.

If a company must operate with leaner teams, resulting in heavier workloads, that decision must be paired with an absolutely crystal-clear, non-negotiable commitment to development. Companies won’t succeed by simultaneously burning people out and offering them vague, opaque futures.

Justin Angsuwat, Chief People and Customer Engagement Officer at Culture Camp, has this to say:

“Now that we’re in 2026, there are interesting signals we need to grapple with. One in five employees is already looking elsewhere. And in some markets, like Germany and the UK, we’re seeing short-term attrition risk at levels that should make leadership teams pause.

But the story behind the numbers is just as important. Employees who feel like they’re developing are significantly more likely to become high performers a year later, but many organizations still treat mobility as a luxury, rather than a retention strategy. If we want people to stay, we need to make growth feel real, even when promotions are tight.

What this means is managers who can coach and develop employees more frequently are going to lead more successful teams. And leaders who can stabilize workloads, create clarity and pathways for growth will come out on top in 2026.”

I’ll conclude by acknowledging the immense pressure on organizational leaders. Decisions to run leaner teams or enforce RTO mandates are not made lightly; they’re often driven by economic uncertainty and the heavy mandate of securing the business's long-term health. However, this is precisely why we must reframe the retention challenge not as a zero-sum game, but as a mutual responsibility.

It takes two

The highest-performing organizations in 2026 will be those where leaders show the courage to be transparent about business constraints, and employees show the initiative to own their development. It is a two-sided transaction.

The most effective retention strategy is built on a foundation of mutual clarity and respect. Leaders, invest with honesty. Employees, lean in with initiative. By accepting that both sides must take ownership of the contract, we can transcend the employer's market fallacy and build a sustainable culture where the best people choose to stay, together.