Employee confidence in U.K. business conditions and economic prospects remained at their lowest level in two years during 3Q19, according to Gartner, Inc.

According to Gartner’s latest Global Talent Monitor report, U.K. business confidence was reported at an index score of 45.2 in 3Q19 – a decrease of nearly 25 index points compared with 3Q18 when the index score was 60.1, and well below the global average of 51.7. In a period where U.K. businesses were focused on reassuring employees and laying out contingency plans for a no-deal Brexit, this trend is troubling for senior leaders.

In 3Q19, nearly 42% of employees reported a high likelihood of staying with their organization — a significant increase compared with the same time last year when only one-quarter of employees were highly likely to remain in-seat. This coupled with a significant year-over-year decrease in active job seeking behavior — 36% in 3Q19 compared with 51% in 3Q18 — suggests confidence in the U.K. job market has evaporated.

“In the buildup to the October 31 Brexit deadline, businesses spent 3Q19 focused on preparing for a no-deal scenario, stockpiling inventory, and making efforts to reassure employees around different Brexit eventualities,” said Brian Kropp, chief of research for the Gartner HR practice. “This was at the cost of important employee development initiatives such as training, appraisals and team building.”

There continues to be questions centered on Brexit, and it is likely that the next few months will continue to strain the U.K. labor market.

“Organizations are wrestling with the question of how to balance the running of day-to-day business operations against preparing for ongoing Brexit uncertainty, such as ‘What will companies do if Brexit deadline extensions continue during the course of 2020 and beyond?’” said Mr. Kropp. “The situation is not sustainable, and the U.K. labor market will continue to suffer until we see some political stability.”

U.K. employees prioritize work culture and supportive managers

According to the 3Q19 Gartner Talent Report, people management is the No. 1 reason employees decide to leave an organization (35.2%) in the U.K. This is followed by work-life balance (34.7%) and manager quality (34.1%). Compensation is a lesser driver of attrition, with only 27.4% of employees reporting that as the reason they left their employer, significantly lower than the global average of 36.6%. Meanwhile, when considering a new job, work-life balance (59.5%), location (53.6%) and respect (32.7%) were ranked as the top considerations for U.K. employees.

“It’s not surprising to see employees’ weight culture over compensation — our research shows that Gen Z in particular is focused on development opportunities and advancing their skill sets,” said Mr. Kropp.

Gartner research on managers found a wider shift in the mentality of modern employees, who respond to not only a different set of rewards, but to a whole new style of management. While companies have been seeking out Always-On managers, who provide constant coaching to employees, it is Connector managers who are ultimately more successful at developing employees by fostering meaningful connections to and among employees, teams and the organization.

“U.K. employees will make employment decisions based on perceptions of the working environment, and they are even willing to trade money for a more positive experience that encompasses organizational culture and management,” added Mr. Kropp. “HR leaders must work to build these changing priorities into their employee value proposition and candidate and employee engagement strategies for 2020 in order to attract and retain the talent they need.”