Why Graduates Are Quitting — and How to Make Them Stay

Attracting Generation Z graduates is just the beginning, the real challenge is convincing them to stay. There's a talent war underway and it does not end at offer acceptance. There’s no silver bullet for retaining Generation Z, but they do want what all employees value:

• Purpose
• Meaningful work
• Tangible development
• A clear path forward
• The chance to make a difference.

If they do not see a future worth staying for, up to 70% will leave within two years. But give them what they’re asking for, especially tailored career development, and you can extend their tenure by up to 60% compared to competitors.

Graduates are tomorrow’s leaders — but only if they stay

Hiring young talent is getting riskier. Rising NICs disproportionately impact early careers employees. And day-one employment rights, with more to come, make onboarding a legal and financial challenge.

At the same time, the workforce is shrinking. Baby Boomers are retiring. Post-pandemic, many working age people have opted out resulting in the talent pool of available skills getting smaller, fast.

Graduates are vital to future-proofing your organisation and losing them is expensive.

The cost of employee and manager turnover can hit:

• £35,000 for entry-level staff
• £42,800 for middle managers
• £54,100 for senior leaders.

The real question isn’t how to recruit them, it’s how to keep them engaged, develop within the organisation, and contribute to the success of the business. 

One-size-fits-all career paths no longer work

To engage Generation Z, employers need to rethink graduate development from the ground up. 88% of Generation Z’s say tailored career development boosts their motivation. That means ditching the traditional, linear career ladder in favour of flexible, personalised, and purposeful paths.

Coaching is key. It empowers graduates to take charge of their journey and creates stronger connections with their employer. 

Not all growth is upwards — and that’s a good thing

Over half of employees stay because they believe they’ll gain career progression and upskilling. But 52% of Generation Z grads feel their current training misses the mark.

It is not enough to offer development. Employers must also offer roles that stretch and inspire, and that might mean looking beyond the next step on the management ladder. 

Progression could mean:

• Lateral moves across functions
• Project-based roles that lead to acquiring new skills
• Cross-disciplinary teams focused on innovation. 

The traditional approach to climbing the ranks needs an update and Generation Z are ready for it. Employers who actively promote internal vacancies across all parts of their organisation will be seen to actively help Gen Z in achieving their career aspirations.

Managers make or break graduate retention

Managers play a central role in whether graduates stay and thrive or disengage and leave. But they need support to do it well and HR teams must equip managers to:

• Understand the unique values and expectations of Generation Z
• Map and communicate career journeys
• Hold effective, meaningful development conversations
• Tailor support based on individual potential and goals. 

A manager with the right tools can turn early-career employees into long-term high performers. 

Five ways to retain Generation Z talent

Keeping Generation Z graduates during early career years starts with understanding what drives them and building a strategy around it. Here are five proven tactics for HR and business leaders: 

• Understand their values and mindset – Don’t assume old methods will still work. 
• Reimagine what a career path looks like – Prioritise purpose, challenge and skill-building. 
• Offer personalised coaching – Align development with today’s role and tomorrow’s goals. 
• Create open, regular feedback loops – Structured check-ins build trust and loyalty. 
• Act fast when needs shift – Waiting risks losing them to more responsive employers.

Talk to one of our career development and mobility specialists today

To discover how LHH can support the career development and retention of your talent please contact us