Welcome to this week's edition.
The labor market is sending mixed signals. On one hand, the quit rate is near a decade low. On the other, global employee engagement has dropped for the second consecutive year, hitting just 20%.
What does this mean for HR leaders? It means your retention numbers might be lying to you. Employees aren't staying because they are engaged; they are staying because the economic environment makes leaving too risky. This "hidden retention risk" is costing the global economy $10 trillion annually in lost productivity.
At the same time, we are seeing massive regulatory shifts on both sides of the Atlantic, from HMRC's new mandatory payrolling rules in the UK to the rollout of "Trump Accounts" and the One Big Beautiful Bill Act in the US.The rules of retention, taxation, and benefits are changing simultaneously. Here is the data and news you need to navigate it.
— Emma Olie, Co-founder SideUp
20%
The global employee engagement rate, marking the first time engagement has fallen for two consecutive years. In the US, the rate is stalled at 31%, an 11-year low.
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69%
The percentage of UK employers who now cite employee benefits costs as their biggest financial challenge, a sharp increase from 51% just a year ago.
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48%
How much more likely companies with strategic recognition and flexible reward programs are to report high employee retention rates compared to those without.
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A low quit rate gives a false sense of security. Data shows that employees are resentfully staying because the hiring market has stalled and financial pressures make leaving unaffordable. This "quiet quitting" at scale is costing organizations trillions in lost productivity.
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Faced with rising costs, 44% of UK organizations now offer no financial education, up from 37% last year. However, to compensate, 70% of companies have shifted to offering flexible benefits (up from 43% two years ago) to deliver better value without increasing overall spend.
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Providing AI tools to employees does not automatically improve engagement. However, when organizations pair frequent AI use with clear expectations, a thoughtful implementation plan, and active manager support, employee engagement skyrockets to 53%.
Effective July 2026, employers can now contribute up to $2,500 annually, tax-free, to "Trump Accounts" for employees' dependent children. Additionally, the new OBBBA legislation makes employer student loan repayment assistance permanent (up to $5,250/year) and raises the dependent care exclusion to $7,500.
HMRC has confirmed that mandatory payrolling of benefits in kind will be phased in. From April 2027, it will apply to company cars, medical benefits, and fuel, fundamentally changing how HR and payroll teams process and report employee perks.
HR tech is moving from reactive dashboards to predictive models. New platforms are using machine learning to monitor internal movement, project engagement, and communication frequency to spot turnover risks before an employee even updates their resume.
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Flexible Employee Benefits: The Complete Guide to Improving Employee Retention in 2026
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🌍 Webinar — Cross-Cultural Differences in the Global Workplace
Featuring Gabriel Mendes, Head of Tech & New Economy Practice at TRUST.
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"A low quit rate isn't a badge of honor if your people are staying out of fear. We have to stop looking at retention as just keeping bodies in seats. True retention is keeping minds engaged. When 69% of companies are stressed about benefits costs, the answer isn't to cut support, it's to stop wasting money on rigid perks that don't solve real problems."
— Emma Olie
The data this week highlights a massive challenge: Benefits costs are surging, yet employee engagement is plummeting. Companies are spending more, but their employees are still stressed about finances and disconnected from their work.
When budgets are tight, you cannot afford to spend money on benefits that employees don't use.
SideUp solves this by moving companies away from rigid, one-size-fits-all packages.
Our flexible platform allows employees to direct their benefits to what actually matters to them right now, whether that is childcare, commuting, wellness, or groceries.
For HR and Finance teams, SideUp provides total budget control, ensures full tax compliance with the latest HMRC and IRS regulations, and delivers predictive analytics on what your workforce actually values.You don't need to spend more to keep your best people. You just need to spend smarter.
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