Global labour market will see 28 per cent of its workers – whether actively or passively looking for a new job – quitting their current jobs within a year. According to a survey of 11,000 employees from eight countries (US, Canada, UK, France, Germany, Australia, Japan, and India) conducted by Boston Consulting Group (BCG) between October 6 and 30, 2023, 28 per cent of total employees said that 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 really matters to their employees, it stated.
The report by BCG tested over 20 different needs, with roughly half being functional needs such as pay, hours, and benefits, and the other half being emotional needs such as feeling valued and supported, and doing work you enjoy. “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,” the report “What Really Matters At Work, And Why We Should Care” said.
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, BCG said. 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.
According to BCG’s analysis of the survey data, the most powerful lever for delivering these emotional needs is managers. In fact, great managers are associated with a 72 per cent reduction in attrition when comparing employees who are very satisfied with their managers with those who are very unsatisfied. This was also the lever with the strongest influence on attrition risk across all surveyed countries, except for India where it was the second strongest, the report stated. The 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. 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,” said Gabrielle Novacek, a managing director and partner at BCG, and co-leader of the team behind the study.
Further, strong dissatisfaction with managers was linked to a doubling of attrition risk, with 56 per cent of employees with that sentiment at risk, compared with a global average of 28 per cent.
The next three levers most correlated with satisfying employees’ emotional needs 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 per cent to 9 per cent..
BCG’s research also underscores a fundamental shift in the employer-employee dynamic. 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 own peril,” it concluded.