Retention is the new recruitment strategy for Malta’s businesses

Finding good employees has become one of the biggest challenges for businesses in Malta. Yet while companies invest considerable time and money in recruitment, many pay far less attention to keeping the people they already have.

Perhaps it's time to rethink that approach.

According to the latest figures from Malta's National Statistics Office, unemployment stood at 3.4% in August 2026. Meanwhile, Malta's job vacancy rate was 3.1% in the second quarter, among the highest in the EU.

The vacancy rate measures how many jobs are waiting to be filled compared with the total number of filled and vacant positions. A high rate means employers have many open positions relative to the size of the workforce.

For businesses, this means recruitment remains competitive. Finding the right person can take weeks or months, and replacing an experienced employee means losing valuable knowledge, investing in training and often putting additional pressure on the remaining team.

In such a market, retaining a good employee can be just as valuable as recruiting a new one.

What employee data is telling us

At Talexio, we recently analysed anonymised HR records from hundreds of Maltese employers to better understand when employees are more likely to leave and which factors are associated with staying longer.

Some findings confirmed familiar challenges. Others revealed patterns that deserve more attention from business leaders.

For example, only 64% of new permanent employees in the companies analysed were still employed after one year.

This raises an important question: are companies paying enough attention to employees after they join, or does the focus quickly shift back to doing business as usual or filling the next vacancy?

But some of the most interesting findings go beyond the first year.

Career progression means more than a new title

The research found that employees who received both a new role and a meaningful pay rise were 31% less likely to leave during the following year, compared with similar colleagues in the same company whose role and pay had not changed.

Interestingly, a new job title without a meaningful pay rise, or a salary increase without a change in role, showed no clear relationship with retention.

This doesn't prove that promotions prevent resignations. However, it raises questions about how companies approach career development.

Are employees given genuine opportunities to progress? Do new responsibilities come with appropriate recognition and pay? And do people know what their future in the company could look like?

The warning signs are not always obvious

Another finding concerned sickness absence.

Employees with particularly high scores on the Bradford Factor, which measures patterns of frequent short sickness absences, were twice as likely to leave during the following year as comparable employees with no recorded sickness absence.

This should not be interpreted as sickness absence causing resignations. Absences can reflect health conditions or personal circumstances, and any response must be supportive rather than punitive.

But a noticeable change in someone's attendance pattern may be a reason for a manager to check in, understand what is happening and offer support.

The research also identified important differences among younger and part-time employees, suggesting that a single approach to retention may not work equally well for everyone.

Retention deserves more attention

Most CEOs know how many vacancies their company has. But how many regularly examine when employees leave, which groups are most affected or whether career progression is linked to better retention?

These questions should be part of normal business discussions, not just annual HR reporting.

Data cannot explain every resignation. It can, however, help management identify patterns earlier and ask better questions.

In Malta's competitive labour market, the next opportunity to strengthen your workforce may not be a new hire, but someone already on your payroll.

Explore the findings

Talexio will present more findings from its employee retention research at an upcoming event. The discussion will go beyond the numbers, sharing practical recommendations and best practices on onboarding, career development, engagement and supporting employees.

Date: 19th November
Time: 1 PM - 4:30 PM
Venue: Corinthia Hotel, St Julian’s
Register for the event.