When People Stay but Stop Caring: Retention Issues in a Tougher Economic Environment
You may have noticed that Raygun – Rachael Gunn, the competitive breakdancer who represented Australia at the Olympics – has returned to the spotlight following her redundancy from a top NSW university. While the public focus has largely been on the individual story, it has also tapped into a broader and more pervasive concern: job security.
Current labour market research shows that 68% of Australian employees are worried about potential redundancies in their workplace – a concern driven less by recessionary indicators and more by slower growth, cost‑of‑living pressures, and increased competition for roles. In this environment, many people are choosing to stay where they are. But staying and being engaged are not the same thing¹.
There is a long‑held assumption that retention becomes easier when the economy tightens. If jobs feel scarce and the economy volatile, the logic goes, people will simply hold onto what they have. While this may reduce voluntary turnover, it also masks a more complex and costly issue: what happens to engagement when people feel unable to move.
Globally, employee engagement fell to 21% in 2024, marking the second decline in twelve years and mirroring the drop seen during the COVID‑19 period. The Australian and New Zealand data tells a similar story, with only 25% of employees engaged, 64% not engaged, and 11% actively disengaged² ³.
This reframes the retention challenge. The real risk is not only the employee who leaves – but the one who stays, disengages, and quietly reduces their contribution. What has been popularised as quiet quitting is often experienced as declining discretionary effort, slower execution, and a gradual erosion of performance and culture.
Gallup’s 2025 report estimates the global productivity cost of disengagement at USD 438 billion. For Australian organisations operating under tighter margins and subdued consumer confidence – due to slower than expected economic growth – the cost of carrying disengaged employees is a risk that cannot be ignored or indefinitely absorbed² ⁴.
Drivers of Disengagement and Why People Don’t Leave
The drivers of disengagement are well established. Research consistently points to factors such as work‑life imbalance, excessive job demands, insufficient resources, limited development opportunities, and misalignment between personal and organisational values. Employees who perceive their careers as stalled are significantly more likely to withdraw effort over time⁵.
However, one factor outweighs all others: leadership.
Gallup research attributes 70% of the variance in team engagement to the manager. Leaders who apply pressure without adapting to their team, who lack awareness of how they are experienced, or who default to a single leadership style under strain often disengage people – usually without intending to⁴.
This becomes particularly salient in environments where performance scrutiny is heightened, resources are constrained, and tolerance for error is low. Under pressure, leadership behaviour tends to intensify. Strengths that function well in stable conditions can become liabilities. Thoroughness can tip into over‑control; confidence into defensiveness. These are not character flaws – they are unmanaged personality patterns manifesting in less adaptive behaviours. The critical question is whether organisations and leaders understand these risks before engagement erodes and performance suffers.
Moving From Reactive to Proactive Retention
Most organisations respond to retention only once a signal appears: a resignation, an engagement survey result, or a visibly struggling team. These are lagging indicators – by the time they surface, a cost has already been exacted.
Australian HR research estimates that replacing a mid‑level employee costs between 50% and 150% of their annual salary when recruitment, onboarding, and lost productivity are considered⁶. In an environment where budgets are tighter and productivity expectations higher, this is not a cost most organisations plan for.
A more sustainable approach starts much earlier – at the point where hiring, development, and leadership decisions are made. This requires moving beyond skills and experience to understand how people are likely to show up day to day, how they respond under pressure, what motivates them, and whether there is genuine alignment between individual needs and organisational realities.
The Role of Personality‑Based Assessment
This is where science‑based personality assessment adds value that interviews and intuition cannot. Tools such as the Hogan Suite of Assessments – used by 75% of Fortune 500 organisations and grounded in more than three decades of research — provide insight across three critical dimensions: everyday behaviour and reputation; potential derailers under stress; and values and drivers that influence long‑term satisfaction and commitment⁷.
This distinction matters. While many assessments focus on self‑perception, Hogan focuses on reputation – how a person is experienced by others – particularly under pressure. In a leadership context, this is precisely what determines whether teams remain engaged or quietly withdraw7.
Used effectively, these insights enable better hiring decisions, more targeted leadership development, and earlier identification of behaviours most likely to drive disengagement if left unchecked.
What Sets High‑Retention Organisations Apart
Organisations that perform well on retention rarely treat it as a standalone initiative. Instead, they understand retention as an outcome of better decisions. Australian research shows that 87% of business and HR decision‑makers agree that poor engagement negatively affects business performance, with the average estimated monthly cost exceeding $32,0008.
Highly engaged organisations experience up to 43% lower turnover. This means in a context of growing employee disengagement, engagement appears to support productivity, adaptability, and retention all of which are factors associated with organisational resilience9.
In today’s economic environment – one that is growing but below expectations and is demanding for business – the question is no longer whether organisations can afford to invest in their people. The more pressing question is whether they can afford the quieter cost of those who stay, but stop caring.
*This article is authored by Andrew Morris, Principal Consultant, PBC
References
- people2people. (2025, March 17).Job security takes centre stage: How redundancy fears are shaping Australia’s workforce in 2025. https://www.people2people.com.au/blog/job-security-takes-centre-stage-how-redundancy-fears-are-shaping-australias-workforce-in-2025
- Founder Reports. (2026, April 8).Quiet quitting statistics: Scope, cost, and driving forces. https://founderreports.com/quiet-quitting-statistics/
- Primeast. (2025). 59 employee engagement statistics for 2025. https://primeast.com/insights/employee-engagement-statistics/
- Gallup. (2025).State of the global workplace 2025 report. Gallup Press.
- Rsisinternational.org. (2025).The silent disengagement: Exploring the impact of quiet quitting on organizational culture. International Journal of Research and Innovation in Social Science. https://rsisinternational.org/journals/ijriss/articles/the-silent-disengagement-exploring-the-impact-of-quiet-quitting-on-organizational-culture/
- Strategic HR Australia. (2025, October 29).Retention, reorganisation and reskilling: The 3Rs of growth. https://strategichr.com.au/retention-reorganisation-reskilling-employee-development/
- Hogan Assessments. (n.d.). Hogan Assessments.https://www.hoganassessments.com/
- 8. Reward Gateway. (2024).Australian employee engagement and retention 2024. https://www.rewardgateway.com/au/blog/employee-engagement-retention
- 9.ContactMonkey. (2025, May 22). 15 employee engagement trends redefining workplaces in 2025. https://www.contactmonkey.com/blog/employee-engagement-trends
