Talent on the Move: Understanding the Rise in Employee Turnover Across 5 countries (2019-2023)
Short resume
The report “Talent on the Move” analyses the rising employee turnover rates in five European countries (Denmark, Sweden, Norway, Germany, and the United Kingdom) from 2019 to 2023. It examines the underlying causes, including a lack of recruitment skills among managers, poor coordination between HR departments and leadership teams, demographic changes, and shifting employee expectations. The report highlights that increasing employee mobility and competition for talent require companies to improve their recruitment and retention strategies.
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Recitation
Staff Turnover, Job Shifts, and Recruitment Challenges in Denmark, Sweden, Norway, Germany, and the United Kingdom
A Shifting Workforce Landscape
The period from 2019 to 2023 has seen profound changes in workforce dynamics across Europe. In countries such as Denmark, Sweden, Norway, Germany, and the United Kingdom, employee turnover rates have risen sharply, forcing organisations to re-evaluate their recruitment processes, retention strategies, and approaches to managing talent.
Anthropologists also note that they are observing a behavioural shift, with candidates moving significantly faster, which means decisions need to be made more quickly. At the same time, audits of evaluation processes reveal that working methods are often not as effective as they could be, with many decisions based more on assumptions rather than on a stronger foundation of facts.
Additionally, training in candidate selection is provided only to a very limited extent. There is certainly a need for improvement.
The increasing mobility of workers, compounded by demographic shifts and evolving expectations from employees, has made it critical for businesses to address these challenges head-on. However, we have yet to see significant changes in the results. In fact, for Denmark, the outcomes are far from positive.
This report provides an in-depth analysis of the underlying causes of rising turnover rates across these five countries, with a focus on the recruitment processes that shape these outcomes. Traditionally, the “hiring manager role” was a key responsibility, requiring managers to be well-versed in selecting the right candidates. However, this “role” has seen a decline in expertise, with many managers lacking the necessary training to make informed hiring decisions. Compounding these issues is the lack of effective coordination between Human Resources (HR) departments and management teams, leading to fragmented recruitment efforts that fail to meet organisational needs.
A report from 2019, repeated in 2021 and 2023, similarly shows that selection and evaluation are rated at an index level of 11, meaning they are 89% short of reaching 100%. An internal analysis conducted after 10,000 people were surveyed with 8,800 responses in 2023 illustrates this further. The respondents were human resources experts at the leadership level. Additionally, several reasons were highlighted for why things “go wrong,” including a lack of preparation and poor communication of information between the individuals involved in the recruitment process—just two of several reasons identified.
The following sections explore the unique challenges faced by each country, drawing from labour market data, demographic trends, and expert insights into how recruitment processes are contributing to the rising turnover rates. The aim of this report is to provide a detailed analysis that can inform global Human Resources leaders on how to address these issues, drawing on best practices and strategies for improving both recruitment and retention.
Tables and key figures
You can find the sources and statistics below.
Denmark: A Flexible Labour Market with High Turnover
Denmark has long been known for its “flexicurity” model, which allows businesses to hire and terminate employees with relative ease. This model has been praised for providing flexibility to employers while offering security to workers through strong social protections. However, this very flexibility has also contributed to the country’s growing turnover rates. In 2019, the 3-month turnover rate in Denmark stood at 18.25%, but by 2023, it had surged to 30.55%. Similarly, the 12-month turnover rate rose from 40.55% to 55.35% over the same period. These figures indicate that more than half of all employees leave their jobs within the first year of employment, a clear sign that Denmark’s labour market is struggling with employee retention.
A significant factor contributing to these high turnover rates is the lack of training and expertise for managers in the recruitment process. Traditionally, the “hiring manager role” was considered a crucial function, requiring managers to have specialised knowledge in assessing candidates, ensuring cultural fit, and making strategic hiring decisions. However, in recent years, this role has diminished in importance. Many managers in Denmark are not adequately trained in recruitment techniques, leading to poor hiring decisions. Interviews are often conducted based on intuition rather than structured assessments, and there is little emphasis on evaluating candidates for long-term potential. The absence of a strategic approach to hiring means that many employees quickly realise their role or the organisation is not a good fit, leading to high turnover.
In addition to the decline in recruitment expertise, there is a clear disconnect between HR departments and management teams. HR professionals often have a wealth of knowledge regarding best practices for recruitment, including the use of structured interviews, personality assessments, and competency-based evaluations. However, this expertise is not always utilised effectively, as managers frequently bypass HR or fail to collaborate with them in the decision-making process. This lack of coordination results in fragmented recruitment efforts, with HR and management operating in silos. The consequence is a recruitment process that is inconsistent, inefficient, and ultimately contributes to the high turnover rates observed in Denmark.
The demographic trends in Denmark further exacerbate the problem. The working-age population (18-64 years) has been shrinking steadily, decreasing from 3.6 million in 2019 to 3.54 million in 2023. This decline, coupled with the country’s ageing population, has made it increasingly difficult for employers to find qualified candidates. As the talent pool shrinks, businesses are forced to compete for a smaller number of available workers, which in turn drives up turnover as employees are lured away by better offers or more favourable working conditions.
Moreover, the impact of the COVID-19 pandemic cannot be overlooked. The pandemic accelerated many of the trends that were already beginning to take shape, including the rise of remote work and the increasing demand for flexible working arrangements. Employees in Denmark, like those in many other countries, have become more discerning about the types of jobs they are willing to accept, prioritising work-life balance and career development over traditional notions of job security. This shift in employee expectations has placed additional pressure on businesses to adapt their recruitment and retention strategies.
In conclusion, Denmark’s high turnover rates are the result of multiple factors, including a flexible labour market, inadequate recruitment training for managers, poor coordination between HR and management, and demographic challenges. To address these issues, Danish businesses must invest in improving the recruitment expertise of their managers, fostering better collaboration between HR and management, and developing strategies that focus on long-term employee retention.
Sweden: A Balanced Labour Market Facing Recruitment Challenges
Sweden has traditionally been known for its robust social welfare system and well-regulated labour market, which have helped to maintain a relatively stable workforce. However, even in Sweden, turnover rates have been on the rise. The 3-month turnover rate increased from 17.10% in 2019 to 28.80% in 2023, while the 12-month rate rose from 36.55% to 49.35%. Although these figures are not as dramatic as those seen in Denmark, they still represent a significant challenge for Swedish employers.
One of the key issues in Sweden’s labour market is the lack of specialised training for hiring managers. While the country’s strong social protections help to reduce the immediate impact of job changes on employees, the recruitment process itself often suffers from inconsistencies. Many managers who are responsible for recruitment are not properly trained to assess candidates effectively. As a result, recruitment decisions are often based on subjective criteria, such as personal impressions or the candidate’s immediate fit for the role, rather than a comprehensive evaluation of their long-term potential or alignment with the company’s values and culture.
Sweden’s recruitment process also suffers from the same HR-management disconnect observed in Denmark. HR departments are typically responsible for the administrative aspects of recruitment, such as advertising job openings and screening candidates, but they are not always involved in the final decision-making process. This separation between HR and management leads to a lack of alignment in recruitment strategies. For instance, HR may prioritise long-term fit and cultural compatibility, while management is focused on filling vacancies quickly. The result is a recruitment process that fails to adequately address both the immediate and long-term needs of the organisation.
Despite these challenges, Sweden’s working-age population has remained relatively stable, hovering around 6.8 million from 2019 to 2023. This stability has helped to mitigate some of the effects of rising turnover, as there is still a relatively large pool of candidates available for recruitment. However, Sweden’s population is ageing, and as the number of working-age individuals begins to decline in the coming years, the competition for talent will increase. This will put additional pressure on employers to improve their recruitment processes in order to attract and retain top talent.
One of the most significant trends impacting recruitment in Sweden is the changing expectations of younger workers. Millennials and Generation Z place a high value on work-life balance, flexible working arrangements, and opportunities for professional development. Traditional recruitment practices, which often focus on salary and job security, are not always sufficient to attract these younger workers. Swedish employers must therefore adapt their recruitment strategies to meet the evolving demands of the labour market. This may involve offering more flexible working conditions, providing clear career progression opportunities, and fostering a workplace culture that aligns with the values of younger generations.
In summary, while Sweden has managed to maintain a relatively stable workforce, it is not immune to the challenges of rising turnover. The lack of specialised training for hiring managers, coupled with the disconnect between HR and management, is contributing to the growing turnover rates. To address these issues, Swedish employers must invest in improving the recruitment expertise of their managers, fostering better collaboration between HR and management, and adapting their recruitment strategies to meet the expectations of a changing workforce.
Norway: Stability in the Face of Increasing Turnover
Norway has long been regarded as one of the most stable labour markets in Europe, with strong social protections and a high level of workforce participation. However, even in Norway, turnover rates have been rising steadily over the past five years. The 3-month turnover rate increased from 15.35% in 2019 to 25.30% in 2023, while the 12-month rate grew from 32.10% to 43.85%. Although these figures are lower than those seen in Denmark and Sweden, they still indicate that Norway is not immune to the broader trends of increasing workforce mobility and rising employee expectations.
One of the key reasons for Norway’s relative stability is its strong labour protections. Employees in Norway benefit from comprehensive social security systems, which provide a safety net in the event of job loss. This reduces the immediate impact of job changes on individuals and helps to stabilise the labour market. However, despite these protections, the rising turnover rates suggest that Norwegian employers are facing challenges in retaining their employees.
As the turnover rates in Norway continue to increase, the root causes can be traced back to recruitment practices and changing employee expectations. Traditionally, Norway’s recruitment processes have been slower and more methodical than those in other European countries. This has helped maintain stability, but it has also meant that hiring managers have not always been equipped to handle the rapid changes in the labour market. Recruitment in Norway is often treated as a straightforward, procedural task rather than a strategic function requiring specialised skills. As a result, many managers rely on subjective methods, such as first impressions or basic interviews, without using more sophisticated assessment tools that could better evaluate long-term fit.
Furthermore, there is a growing disconnect between HR and management in many Norwegian companies, similar to the issues seen in Denmark and Sweden. HR departments often have access to data-driven recruitment tools and methods, such as competency-based interviews and personality assessments, but these are not always utilised effectively by hiring managers. In many cases, HR’s role in recruitment is relegated to administrative tasks, while management retains control over the final hiring decisions. This lack of integration between HR and management leads to recruitment processes that are fragmented and inconsistent, which can result in poor hires and ultimately higher turnover.
Norway’s demographic trends are also contributing to the rising turnover. The working-age population has been shrinking, decreasing from 3.4 million in 2019 to 3.35 million in 2023, which puts additional pressure on employers to retain their staff. As the talent pool becomes smaller, competition for skilled workers is increasing, and companies that fail to provide attractive working conditions or career progression opportunities are likely to see higher turnover rates. This is particularly true for younger workers, who are increasingly prioritising work-life balance, flexibility, and opportunities for professional development over traditional markers of job security.
The pandemic has also played a role in accelerating turnover trends in Norway. Remote working has become more common, and employees have become more selective about the types of roles they are willing to accept. Many employees have re-evaluated their career priorities, leading to higher levels of job mobility as they seek out opportunities that align with their personal and professional goals. This shift in expectations has created a more fluid labour market, where employees are more likely to leave their jobs if their needs are not being met.
In summary, while Norway has managed to maintain a relatively stable labour market, it is beginning to experience the same challenges with turnover that are seen across the rest of Europe. The lack of specialised training for hiring managers, coupled with a disconnect between HR and management, is contributing to the rising turnover rates. Additionally, the shrinking working-age population and changing employee expectations are placing further pressure on employers to improve their recruitment and retention strategies.
Germany: A Structured Approach with Growing Demographic Pressures
Germany has long been regarded as one of the most stable labour markets in Europe, with a well-structured recruitment process and a strong emphasis on long-term employment. However, even Germany is beginning to see rising turnover rates, though these increases have been more modest compared to other European countries. The 3-month turnover rate rose from 14.10% in 2019 to 23.85% in 2023, while the 12-month rate increased from 32.10% to 42.45%. These figures indicate that while Germany is better at retaining its workforce than Denmark, Sweden, or the UK, it is still facing challenges in maintaining workforce stability.
One of Germany’s key strengths is its methodical approach to recruitment. German companies typically invest heavily in the training of hiring managers, ensuring that they have the necessary skills and knowledge to make informed hiring decisions. Recruitment in Germany is often a highly structured process, with companies utilising a range of assessment tools, including structured interviews, personality tests, and data-driven evaluations. This methodical approach helps to ensure that employees are well-matched to their roles, which reduces the likelihood of turnover.
However, despite Germany’s strengths in recruitment, the country is facing demographic challenges that are putting pressure on its labour market. The working-age population decreased from 50.5 million in 2019 to 49.6 million in 2023, a decline that is expected to continue as Germany’s population ages. This shrinking talent pool has made it more difficult for companies to find qualified candidates, which in turn has contributed to rising turnover rates as businesses compete for a limited number of workers. This demographic shift is particularly problematic in industries that rely on highly skilled labour, as there are simply not enough workers to meet demand.
Additionally, while Germany’s recruitment processes are generally well-structured, there are still issues with HR-management coordination. In some companies, HR departments are seen as administrative support rather than strategic partners in recruitment. This can lead to a situation where managers make hiring decisions without fully utilising the expertise and tools that HR departments provide. In other cases, HR may take too much control over the recruitment process, leaving managers feeling disconnected from the hiring decisions. This lack of balance can result in misaligned recruitment efforts, which can contribute to higher turnover rates.
Germany is also grappling with the changing expectations of younger workers, particularly Millennials and Generation Z. These generations are more likely to prioritise flexible working conditions, work-life balance, and opportunities for career development over traditional measures of job security. While German companies have historically focused on long-term employment stability, they may need to adapt their recruitment and retention strategies to meet the demands of a younger, more mobile workforce.
In conclusion, Germany has managed to maintain relatively low turnover rates compared to its European counterparts, thanks to its structured recruitment processes and strong labour protections. However, the country is facing significant demographic challenges, and the disconnect between HR and management is contributing to the rising turnover rates. To address these issues, German companies must continue to invest in the training of hiring managers, improve collaboration between HR and management, and adapt their recruitment strategies to meet the evolving expectations of the workforce.
United Kingdom: A Labour Market in Crisis
The United Kingdom has experienced some of the most dramatic increases in employee turnover among the five countries analysed. The 3-month turnover rate rose from 20.50% in 2019 to 35.35% in 2023, while the 12-month rate increased from 40.65% to 53.45%. These figures indicate that more than half of all employees leave their jobs within the first year of employment, a clear sign that the UK’s recruitment and retention strategies are failing to meet the needs of the modern workforce.
One of the primary reasons for the UK’s high turnover rates is the lack of expertise in recruitment. The traditional “hiring manager role,” once a respected and specialised function, has been eroded over time. Many managers responsible for recruitment lack the training and resources necessary to make informed hiring decisions, and recruitment is often treated as a short-term administrative task rather than a strategic process. This lack of expertise leads to inconsistent and ineffective recruitment practices, with managers relying on subjective assessments rather than structured interviews or data-driven evaluations.
The disconnect between HR and management is another major issue in the UK. In many organisations, HR is seen as a support function, responsible for administrative tasks such as posting job advertisements and scheduling interviews, while managers retain control over the final hiring decisions. This division of responsibilities leads to a fragmented recruitment process, where HR’s expertise is underutilized and managers make hiring decisions without the full support of the tools and resources that HR can provide. This lack of coordination results in poor hires and contributes to the high turnover rates seen across the country.
The UK is also facing demographic challenges that are exacerbating its turnover crisis. The working-age population has declined slightly, from 41.6 million in 2019 to 41.3 million in 2023, but this small decrease masks a larger issue: the ageing population and the increasing number of workers leaving the labour market. As the population ages, there are fewer younger workers entering the workforce, which is creating a shortage of talent in many industries. This shortage has driven up competition for skilled workers, with employees frequently leaving jobs for better offers or more attractive working conditions.
The COVID-19 pandemic has also played a significant role in reshaping the UK’s labour market. The rise of remote working and the shift in employee expectations have created a more fluid and mobile workforce, where employees are more likely to change jobs if their needs are not being met. Many workers in the UK have re-evaluated their career priorities, placing greater emphasis on flexibility, work-life balance, and opportunities for professional development. Traditional recruitment strategies, which often focus on salary and job security, are no longer sufficient to attract and retain top talent in this new environment.
In conclusion, the UK’s rising turnover rates are the result of several interrelated factors, including a lack of expertise in recruitment, poor coordination between HR and management, demographic challenges, and the shifting expectations of the workforce. To address these issues, UK businesses must invest in improving the recruitment expertise of their managers, fostering better collaboration between HR and management, and adapting their recruitment strategies to meet the evolving demands of the labour market.
When it comes to the factual reasons, many different factors come into play. It could be geographical challenges, with companies located far from cities, possibly with poor transport links. It is often observed that those who live outside urban areas tend to stay in their jobs longer, and the cost of living in a city, region, or country can also have an impact. The number of people coming from other countries and securing jobs is another factor. In short, there are many different reasons that contribute to these outcomes.
Sources & References
Danish Ministry of Employment: Annual Employment Report
This source includes detailed reports on Denmark’s labour market, focusing on employment trends, recruitment challenges, and employee turnover rates.
Full URL: https://www.bm.dk/employment-reports
Statistics Denmark: Labour Force Statistics
This resource provides comprehensive data on the Danish labour force, including statistics on job mobility, employment rates, and workforce demographics.
Full URL: https://www.dst.dk/en/Statistik/emne/arbejde
Confederation of Danish Industry: Recruitment Challenges Report
This report offers insights into the recruitment challenges faced by Danish industries, including data on employee turnover and retention strategies.
Full URL: https://www.danskindustri.dk/analyse/rekruttering
Swedish Public Employment Service: Annual Labour Market Report
This source provides in-depth reports on the Swedish labour market, with a focus on employment, turnover, and demographic trends.
Full URL: https://arbetsformedlingen.se/statistik/rapporter
Statistics Sweden: Workforce Surveys and Reports
This resource offers detailed labour market statistics for Sweden, including data on employment rates, job mobility, and turnover.
Full URL: https://www.scb.se/en/finding-statistics/statistics-by-subject-area/labour-market
Norwegian Labour and Welfare Administration (NAV): Employment Statistics
This source provides detailed statistics on the Norwegian labour market, including employment trends, job shifts, and workforce demographics.
Full URL: https://www.nav.no/en/home/statistics-and-analyses
Statistics Norway: Labour Force Survey Reports
This resource provides comprehensive data on Norway’s workforce, covering employment rates, turnover, and demographic changes.
Full URL: https://www.ssb.no/en/employment
Federal Employment Agency (Bundesagentur für Arbeit): Labour Market Reports
This source provides extensive reports on the German labour market, focusing on employment trends, recruitment challenges, and turnover.
Full URL: https://www.arbeitsagentur.de/en/statistics/labour-market
Statistisches Bundesamt (Destatis): Employment Statistics
This resource offers detailed labour market statistics for Germany, including data on workforce demographics, job mobility, and turnover.
Full URL: https://www.destatis.de/EN/Home/_node.html
Office for National Statistics (ONS): UK Labour Market Overview
This resource provides a comprehensive overview of the UK labour market, including detailed statistics on employment, turnover, and workforce demographics.
Full URL: https://www.ons.gov.uk/employmentandlabourmarket
UK Chartered Institute of Personnel and Development (CIPD): Labour Market Outlook Reports
This report provides insights into the recruitment and retention challenges facing UK employers, with data on turnover and employee mobility.
Full URL: https://www.cipd.co.uk/knowledge/work/trends/labour-market-outlook
Denmark
Statistics Denmark: Provides data on job mobility, employment rates, and demographic changes.
Full URL: https://www.dst.dk/en/Statistik/emne/arbejde
Danish Ministry of Employment: Offers reports on employment trends, recruitment challenges, and the overall labour market.
Full URL: https://www.bm.dk/employment-reports
Confederation of Danish Industry: Publishes reports on recruitment and retention in Danish industries.
Full URL: https://www.danskindustri.dk/analyse/rekruttering
Sweden
Statistics Sweden: Provides comprehensive labour market data, including workforce participation, job shifts, and employment trends.
Full URL: https://www.scb.se/en/finding-statistics/statistics-by-subject-area/labour-market
Swedish Public Employment Service: Offers reports on job mobility and turnover in the Swedish labour market.
Full URL: https://arbetsformedlingen.se/statistik/rapporter
Swedish National Institute of Economic Research: Provides reports on economic trends and employment data.
Full URL: https://www.konj.se/english.html
Norway
Statistics Norway: Offers detailed labour force surveys, covering employment rates and workforce mobility.
Full URL: https://www.ssb.no/en/employment
Norwegian Labour and Welfare Administration (NAV): Provides employment statistics and analyses of job shifts and turnover.
Full URL: https://www.nav.no/en/home/statistics-and-analyses
The Research Council of Norway: Publishes reports on workforce trends and labour market developments.
Full URL: https://www.forskningsradet.no/en
Germany
Federal Employment Agency (Bundesagentur für Arbeit): Provides labour market reports with detailed statistics on job mobility and turnover.
Full URL: https://www.arbeitsagentur.de/en/statistics/labour-market
Statistisches Bundesamt (Destatis): Offers detailed employment statistics, covering workforce demographics and employment trends.
Full URL: https://www.destatis.de/EN/Home/_node.html
Institute for Employment Research (IAB): Publishes research on labour market trends, job mobility, and employment challenges in Germany.
Full URL: https://www.iab.de/en/daten/iab.aspx
United Kingdom
Office for National Statistics (ONS): Provides comprehensive data on the UK labour market, including job mobility and turnover.
Full URL: https://www.ons.gov.uk/employmentandlabourmarket
Chartered Institute of Personnel and Development (CIPD): Publishes reports on labour market outlooks, recruitment challenges, and turnover trends.
Full URL: https://www.cipd.co.uk/knowledge/work/trends/labour-market-outlook
UK Department for Work and Pensions: Provides reports on employment trends, recruitment, and workforce mobility in the UK.
Full URL: https://www.gov.uk/government/organisations/department-for-work-pensions
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Last updated: November 19, 2024 at 19:40 pm