Employee confidence dropped to an all-time low, according to a new report from Glassdoor.
The percentage of employees reporting a positive six-month business outlook fell to 43.6 percent in June, down from 44.4 percent in May, signaling widespread unease over the economy and larger job market. Glassdoor began tracking the confidence levels in 2016, per the report.
“Employee confidence is a direct representation of what is going on with the economy,” Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast, told Newsweek. “Consumer confidence sharply turned down in June which reflects economic prospects moving forward. The expectation is for a weakening economy.”
Why It Matters
When employee confidence trends downward, the risk of turnover heightens. Workers with a negative business outlook are more than twice (2.1 times) as likely to look for a new job compared to those with a positive outlook, according to Glassdoor.
Low employee confidence can also signal a worsening job market and broadening economic distress.
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What To Know
While employee confidence overall was down in June, industry played a role in how workers felt about their company’s outlook. White-collar industries like management and consulting dropped by 2.6 percentage points, while information technology, legal, and the pharmaceutical industry also dipped 1.9, 1.8 and 1.5 points, respectively.
“When you see headlines of continued layoffs and economic uncertainty over the next 12 months, it’s easy to understand why some employees are struggling to remain upbeat in their workplaces,” Alex Beene, financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
Still, health care employee confidence remained relatively high, with around 50 percent of workers having a positive business outlook for their employers.
Hotels and travel accommodation employee confidence climbed 1.1 percentage points, while restaurants and food services also grew by 0.3 points.
What People Are Saying
Thompson also told Newsweek: “The expectation is for weakening growth and job losses. A recession is being predicted and people are simply awaiting economic deterioration. Employers aren’t confident on account of their overall cost given the tariff situation, which directly impacts workers since they are normally the highest cost for businesses.”
Beene also told Newsweek: “It’s the perfect storm of bad economic news in recent months. In the years following the pandemic, many major employers started to dial back their workforce numbers after hiring more during that era. The result was many remaining employees feeling overworked and underpaid with less assistance.”
What Happens Next
Financial analysts predict the job market to diminish in the coming months as a recession becomes a likely possibility.
“I expect a slowing jobs market as you have seen a decline of some 200k jobs since January referring to monthly jobs revisions downward, and deteriorating ADP [Automatic Data Processing, Inc.] numbers,” Thompson said.