by Julie Tuggle-Nguyen
As we move further into 2025, it’s a good time to take stock of the labor market trends shaping your business, team, and organization. Employment dynamics continue to evolve, and these changes directly impact how you attract, retain, and engage your workforce. Let’s explore some key trends and how they affect your small business.
The Great Stay: Employees Are Sticking Around
A few years ago, we saw The Great Resignation, where workers left jobs in record numbers. Now, we’re seeing something different—the workforce is settling in. Many employees are taking a “wait and see” approach, staying in their roles longer.
This means fewer job openings and less frequent turnover, but it also means employees have higher expectations. According to Korn Ferry’s Workforce 2024 report, the top three priorities for employees deciding whether to stay or leave a job are:
1. Generous compensation
2. Flexible working hours
3. High job security
Businesses that align with these priorities will have a competitive edge when it comes to retaining talent. If you’re a small business owner, consider how your compensation, flexibility, and stability compare to market expectations. Retention strategies should focus on rewarding employees appropriately, offering work-life balance, and ensuring job security where possible.
Return-to-Office Policies: What Works for Small Businesses?
Large corporations like Amazon and AT&T have made headlines for enforcing strict return-to-office (RTO) mandates. Companies that own commercial real estate are also pushing for workers to utilize office spaces full-time. But does this reflect the future of work for everyone?
No. In fact, while fully flexible work environments are declining overall, structured hybrid models (requiring minimum weekly office hours) now dominate at 43% of organizations—more than double the rate from early 2023. Variables like company size and industry also impact the level of flexibility offered, with only 15% of small businesses mandating office attendance.* Furthermore, companies enforcing rigid RTO policies are already seeing unintended consequences—rising leave requests, declining productivity, and even talent loss.
What This Means for Your Business
Flexibility may look different for you than it does for large companies. For small businesses, retaining employees is critical, and sudden policy shifts can have a tangible impact on morale and productivity. If your business experiences significant turnover, it can be far more disruptive than in a large company.
Pay attention to your people and your customers, and find a balance that works for both of their needs. A strong, performance-based culture with flexibility can help you retain your best people and their best work.
The Bottom Line: Flexibility and Stability Win
The labor market is shifting, and small businesses need to adapt to stay competitive. Here’s how you can navigate these trends effectively:
- Retention is key: With fewer people switching jobs, focus on keeping your best employees by offering competitive pay, flexibility, and opportunities for career development.
- Find the right work model: Fully remote, hybrid, or in-office? The best approach depends on your business needs, but employees favor balance over extreme policies.
- Be mindful of employee expectations: Workers today want fair compensation, work-life balance, and stability. Meeting these expectations helps you attract and keep great talent.
As a small business owner, your strength lies in your ability to create a workplace where every employee feels valued. In a dynamic labor market, businesses that prioritize both flexibility and stability will come out ahead.
*2024 Q4 Flex Index Report
Julie Tuggle-Nguyen is Chief Human Resources Officer at Midwest BankCentre.