Kestrel HR shares its top tips for Employers this summer.

The UK labour market is showing signs of softening, with the latest ONS figures revealing a drop of 109,000 payrolled employees in May 2025, bringing the total to 30.2 million — a 0.4% decrease on the month and 0.9% down year-on-year.

The unemployment rate rose to 4.6% between February and April 2025, while the economic inactivity rate stood at 21.3%.

Job vacancies also declined, falling by 63,000 to 736,000 between March and May — the 13th consecutive quarterly drop. These figures reflect growing employer caution amid economic uncertainty and rising employment costs.

What This Means for Employers

With fewer roles available and increased competition for talent, retaining your existing workforce is more important than ever. Here are five evidence-based strategies to strengthen retention:

1. Enhance Flexibility

Offer hybrid or remote working options, flexible hours, and job-sharing arrangements. Flexibility is consistently ranked as a top priority for employees.

2. Invest in Career Development

Provide clear progression pathways, mentorship, and access to training. Employees who see a future with your organisation are more likely to stay.

3. Recognise and Reward

Regularly acknowledge achievements — both formally and informally. Recognition boosts morale and reinforces a sense of value and belonging.

4. Prioritise Wellbeing

Support mental health through EAPs, wellbeing days, and open conversations. A healthy workforce is a loyal workforce.

5. Listen and Act

Use pulse surveys, stay interviews, and feedback loops to understand what matters most to your people — and respond meaningfully.