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Low Turnover Isn't Loyalty

By Glen Wilson

Illustration of a group of office employees standing with arms crossed and uneasy expressions, rendered in TrueCollab navy and cream.

If your company had a quiet year for resignations, you’re in good company. Across the U.S., fewer people have been quitting their jobs for two years running. It’s tempting to read that as a sign that people are happy where they are. The data says to be careful with that reading.

The numbers

In September 2026, 2.1% of U.S. workers quit their jobs, according to the Bureau of Labor Statistics’ preliminary estimate. The hires rate was 3.4%, and layoffs and discharges ran at 1.0%.

Source: U.S. Bureau of Labor Statistics, Job Openings and Labor Turnover Survey, September 2026 (released Nov. 3, 2026, preliminary).

Those are low numbers by recent standards. Indeed Hiring Lab noted in June that the quits rate had been at or below 2% for almost a year straight, well below pre-pandemic norms and the roughly 3% peak of early 2022. Hiring has been just as flat: KPMG found the hires rate has stayed between 3.3% and 3.4% on a three-month average since June 2024.

Sources: Indeed Hiring Lab, May 2026 JOLTS report, June 30, 2026; KPMG, June 2026 JOLTS analysis.

September’s quits figure ticked up from 1.9% in August. One month doesn’t make a trend, and the figure is preliminary. But it’s worth keeping an eye on, for reasons that come up below.

What it’s been hiding

A low quits rate tells you people aren’t leaving. It doesn’t tell you why. In a market where few companies are hiring, staying put is often the only realistic option, whether or not someone is happy.

Two other measures suggest many employees aren’t especially attached to their jobs.

Gallup’s 2026 State of the Global Workplace report puts U.S. employee engagement at 32%, based on its three-year rolling average through 2025. Another 51% are not engaged and 17% are actively disengaged.

SHRM’s 2026 State of the Workplace survey found that job satisfaction tracks closely with how effective workers say their organization is at addressing workplace needs. Where workers rated their organization low on effectiveness, 44% were satisfied with their jobs. Where they rated it high, 91% were. That’s an association, not proof that one causes the other, but it’s a large gap.

Sources: Gallup, State of the Global Workplace 2026, U.S. country data; SHRM, 2026 State of the Workplace (1,800+ HR professionals and 2,000+ workers), Jan. 8, 2026.

The performance problems that didn’t leave

In a busy job market, some problems take care of themselves. A struggling employee finds something that fits better and resigns. A team that’s been carrying an underperformer gets relief when that person leaves. Nobody had to have a hard conversation.

That hasn’t been happening. The person who might have moved on in 2022 is still on your team in 2026, and so is the manager who never addressed the issue. Every month that passes makes the conversation harder to start, because now it comes with the question of why nobody raised it sooner.

For a small company this matters more than it does at a large one. In a 30-person business, one person who isn’t pulling their weight is visible to everyone, and the people covering for them are usually your best performers. Those are also the people with the most options when hiring picks up again.

The managers carrying it

The job of having those conversations falls to managers, and managers have less room than they used to.

Gallup found the average manager’s span of control rose from 10.9 direct reports in 2024 to 12.1 in 2025. That average is pulled up by a small number of very large teams; the median is five to six. More telling for small companies: 97% of managers do individual-contributor work, a median of 40% of their time.

Source: Gallup, “Span of Control: What’s the Optimal Team Size for Managers?”

That describes most managers in a company with fewer than 150 people. They’re player-coaches, promoted because they were good at the work and still doing a good share of it. A performance conversation competes with their own deadlines, and the deadlines usually win. If you want those conversations to happen, someone above the manager has to make room for them.

What to do while it’s quiet

Low turnover gives you something you don’t usually have: time, and a team that’s mostly still in place. Three ways to use it:

Clear the backlog of deferred conversations. Ask each manager for the one or two performance issues they’ve been putting off. Help them prepare, have the conversation, and write down what was agreed. Done well, this gives the employee a clear picture of what’s expected and a real chance to improve, which many of them haven’t had.

Hold stay conversations with the people you’d hate to lose. Ask your strongest performers directly what keeps them here and what would make them leave. Do it before a recruiter asks them a version of the same question. Then follow through on at least one thing they tell you, even a small one, so the conversation means something.

Separate “stayed” from “performed” in your reviews. In a low-turnover year, it’s easy for tenure and loyalty to quietly stand in for results. Look at your last round of reviews and ask whether the ratings would hold up if you couldn’t see how long each person had been there.

If quits keep climbing

Hiring won’t stay this flat forever. When it picks up, the first people to leave are likely to be the ones who stayed because they had nowhere else to go, and the high performers who’ve been carrying more than their share.

September’s small uptick may turn out to be noise. Either way, the work above is the same, and it’s cheaper to do now than in the middle of a resignation wave.

Is your turnover low because people are happy, or because they have nowhere else to go?

Not sure what’s behind your own turnover numbers? We help leaders of 0–150 person companies have the conversations that keep good people and develop the ones who are struggling. Book Your Free HR Consult.

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