When Top Talent Walks Out: What Small Town Leaders Need to Know About the Workforce Crisis

Let’s get real for a minute. If you’re running a small business in a small town, you’ve probably felt it—that quiet shift in energy when your best people start drifting away. Maybe it’s the barista who knew every customer’s order by heart, or the marketing assistant who could turn a Facebook post into a local movement. They’re not just employees—they’re culture carriers. And when they leave, it stings.

According to a recent Workday Global Workforce Report, we’re in the middle of a talent crisis. Promotions are stalling, internal hiring is down, and confusion around AI is making people feel more replaceable than empowered. And while this might sound like a big-city problem, it’s hitting small towns harder than we think.

Promotions Are Stalling—and So Is Morale

Let’s start with the numbers. Promotions have dropped in 10 out of 11 industries. Internal hiring? Down 8%. That means fewer people are moving up, and more are moving out. The report found that 75% of sectors are seeing their top talent walk away. In retail, turnover is a whopping 64%. Healthcare isn’t far behind at 28%.

Now, think about that in a small-town context. When someone leaves a corporate job in a city, they’re one of many. But in a small town? That departure echoes. It’s not just a vacancy—it’s a void in your community fabric.

AI Isn’t the Villain—Confusion Is

Here’s where things get murky. AI is everywhere—from inventory tracking to customer service bots. But according to Workday’s Chief People Officer Ashley Goldsmith, “AI may be rewriting the rules of work, but it cannot replace the value of engaged, motivated people.”

The problem isn’t AI itself—it’s the lack of clarity around how it’s being used. Nearly half of employee feedback flagged negativity around AI strategy. Translation? Your team feels left out of the conversation. They’re wondering, “Is this tech here to help me—or replace me?”

In small towns, where trust and transparency are everything, this kind of uncertainty can be toxic. If your employees don’t understand your tech strategy, they’ll assume the worst. And when people feel replaceable, they stop showing up with heart.

What Small Businesses Can Do Right Now

Let’s flip the script. This isn’t just a crisis—it’s a chance to lead differently. Here’s how small-town businesses can turn this moment into a movement:

1. Create Clear Career Paths

Even if you only have a handful of employees, growth matters. Offer mentorship, new responsibilities, or skill-building workshops. Let your team know there’s room to rise—even if it’s sideways instead of up.

2. Demystify AI

Host a team huddle. Break down your AI strategy in plain language. Better yet, ask your employees how they’d like to use tech to make their jobs easier. Make it collaborative, not cryptic.

3. Celebrate Loudly and Often

Recognition fuels retention. Spotlight your team’s achievements—on social media, in newsletters, or with a good old-fashioned shoutout at the local diner. When people feel seen, they stay.

4. Invest in Emotional Intelligence

This one’s close to home for Small Town Wow. Teach your team how to listen actively, read body language, and lead with empathy. These soft skills build strong teams—and strong communities.

People First, Always

The Workday report makes one thing clear: businesses that prioritize employee growth and transparent communication will come out stronger. And in small towns, where relationships are everything, that’s not just good strategy—it’s survival.

So if you’re building a brand that’s rooted in community, don’t let your best people drift away. Engage them. Grow with them. And make sure your strategy—AI or otherwise—starts with heart.