28% of employees are actively or passively looking for new jobs?
- New BCG Survey of 11,000 Employees from Eight Countries Shows What Matters to Them at Work, and Why Their Employers Should Care
- Treating Employees Like Customers and Investing in Understanding and Meeting Their Emotional Needs Is Critical to Retaining Them
- Great Managers Are the Most Powerful Lever for Delivering Key Emotional Factors, and Account for a 72% Reduction in Attrition Risk, a 3.2x Increase in Employee Retention, and a 13.9x Increase in Satisfaction
In a global labor market where there is still record low unemployment, 28% of workers—whether actively or passively looking for a new job—say they do not see themselves with their current employer within a year. It is therefore more critical than ever for employers to prioritize and invest in understanding what matters to their employees.
Unsurprisingly, when asked directly what would drive them to take a new job, employees’ answers are focused on functional factors, with pay the overwhelming top choice, followed by benefits and perks, work/life balance, work they enjoy and care about, and better career learning opportunities.
Not just pay and benefits; emotional needs also play a key role in retaining employees
The future of work revolves around the quality of talent and job satisfaction. In our post-pandemic world, where unemployment persists at record lows, and living and working amid uncertainty is almost a norm, the challenge for employers is becoming more complex than ever before.
BCG’s new employee satisfaction survey with over 11,000 workers in eight countries, including India, Australia, Japan, the US, the UK, Canada, France, and Germany, found that 28% of workers do not see themselves with their current employer within a year.
With 26% of the Indian employees surveyed at risk of leaving next year, the task for employers in the country is as challenging as it is for its global peers. The key will be for employers to prioritize and invest in the most optimal way to understand what matters to their employees.
However, when employees were asked to make choices between different aspects of work—simulating a purchase decision—emotional needs crept into the top five. Pay and hours still dominated as the top two choices, but feeling fairly treated and respected, feeling like I have job security, and doing work I enjoy—all emotional needs—moved into third, fourth, and fifth places respectively.
Most significantly, when the 20+ work attributes from the survey were correlated with employees’ stated intention to stay in or leave their jobs, functional benefits—including pay—dropped toward the bottom of the list, and emotional factors dominated the top five most important factors: job security, being treated fairly and respected, enjoyable work, feeling valued and appreciated, and feeling supported. If companies want to keep their employees, they need to meet these emotional needs.
Setting retention aside, that same employee comparison shows that great managers are also associated with a 3.2x increase in employee motivation, a 13.9x increase in job satisfaction, and a significant increase in feelings of inclusion.
“Managers also play a key role in companies achieving their diversity, equity, and inclusion goals,” said Gabrielle Novacek, a managing director and partner at BCG, and co-leader of the team behind the study.
“We know that inclusion is critical if we want to attract, engage, and retain a diverse workforce. Reporting that they are satisfied with their manager correlated with employees’ feelings of inclusion rising by 36 points on our BCG BLISS index, which stands for Bias-Free, Leadership, Inclusion, Safety, and Support, and is a comprehensive, statistically rigorous tool that measures the drivers of inclusion and the value that it delivers.” Gabrielle added.
Further, strong dissatisfaction with managers was linked to a doubling of attrition risk, with 56% of employees with that sentiment at risk, compared with a global average of 28%.
Making a significant investment in upskilling all managers and incentivizing them to excel in their roles is the most impactful investment companies can make to retain their best workers.
It goes beyond just training. The survey results show that creating material step changes in managers’ capabilities drives significant value.
The next three levers most correlated with satisfying employees’ emotional needs—among 300 different workplace characteristics ranging from upskilling opportunities to working model and leadership sentiment—were (1) supportive leaders, (2) access to resources to do one’s work, and (3) access to opportunity regardless of background.
All three had an impact very similar to having a great manager, when taken in isolation—and pulling all four levers together reduces attrition risk from the baseline global average by about two-thirds, from 28% to 9%.
BCG’s research underscores a fundamental shift in the employer-employee dynamic. Today, many people are on the lookout for better job opportunities, and it is time for leaders to start treating their employees like customers.
This means companies need to use all their customer-focused capabilities such as deep discovery, sophisticated needs assessment, segmentation, personalization, design thinking, and true employee journeys.
It’s now clear that it’s not just factors like pay and benefits that matter to employees when deciding to stay in or leave a job—their emotional needs play the dominant role, and leaders who don’t tune into that fact do so at their peril.
