- Pay is the top concern for 35% of employees while attracting and retaining talent are top priorities for employers
- Remote vs. in-office stalemate – half of employees want no more than one day a week at the office
- Trust, empowerment, and care reduce the likelihood of quitting by 40%
Attracting and retaining talent are top concerns for employers around the world, yet more than one-third (35%) of employees are likely to quit their job in the next 12 months, with Gen Z (38%) and millennials (37%) the most likely to leave, according to the EY 2023 Work Reimagined Survey. The survey finds a disconnect between employee and employer expectations and motivations, with a majority (58%) of employers believing that slowing economic growth is reducing employees’ likelihood to quit. In contrast less than half (47%) of employees agree – and in fact, 22% of employees disagree – leaving employers at risk of underestimating the continued fluidity of the labor market.
This survey, the fourth in a series, canvassed the views of more than 17,000 employees and 1,575 employers across 22 countries and 25 industry sectors globally. It finds that the shifting balance of power in the workplace remains in employees’ favor despite slowing economic growth.
At pre-pandemic levels, 53% of all respondents believed that the balance of power in the workplace was held by employers and just 24% by employees. By 2022 (mid-pandemic), the gap was 44% for employers vs. 37% for employees; today, the gap stands at 46% for employer power versus 32% for employees.
Liz Fealy, EY Global People Advisory Services Deputy Leader and Workforce Advisory Leader, says:
“Even with the current economic turbulence, more than a third of the workforce is still looking to change jobs in search for better pay to keep up with inflation and an employee value proposition that fits their post-pandemic life and priorities. Employers need to preserve their critical talent by co-creating the future of the organization with strategies that reflect employees’ priorities and ultimately build trust and better retention.”
Push and pull factors
In line with last year’s survey, pay remained the top concern for employees (35%). However, this ranked as the third highest concern for employers, who are more focused on attracting new talent (37%) and retaining talent (34%), demonstrating a disconnect in workplace priorities.
Employers also risk overestimating the sway of flexibility as an incentive to attract new talent. According to the findings, 84% of employers believe that offering flexibility will positively impact their ability to recruit talent, but just 63% of employees agree. This is especially true for knowledge workers, whose work is traditionally based primarily on using analysis or subject expertise in a professional office setting, flexibility is now a baseline expectation, with more than a third wanting to be fully remote.
A remote versus office stalemate has emerged between employers and knowledge workers with regard to flexibility and return to the office. While 47% of employers prefer their staff to be in the office two to three days per week, 50% of workers said they are willing to come in no more than one day per week.
Employees, however, are pulled toward in-office engagements that are centered around staying socially connected (36%), collaborating with colleagues (30%), and building and maintaining relationships (29%). While employees are not more frequently visiting offices in “Class A” real estate, those with the best amenities and locations, the survey finds that investment in high-quality real estate is positively correlated with a range of key workforce outcomes including culture, productivity and retention.
Roselyn Feinsod, Work Reimagined Leader, EY LLP, says:
“There was a clear shift in the balance of workplace power on the heels of the pandemic, and while the scale continues to rebalance, employers should be wary of overestimating their power, as workers are more comfortable with questioning the status quo. To keep up with ongoing demands, employers need to both reimagine and right-size their real estate, given expectations for a collaborative office experience and volumes of space impacted by ongoing demands for flexibility. Employers also must not be fooled into thinking that compensation is no longer a top priority, especially as they fight to attract and retain talent.”
Bridging the employee-employer disconnect
There is a clear gap between employers’ and employees' optimism about leadership alignment on new ways of working. While 73% of employers agree managers and leadership are aligned on new ways of working (e.g., work schedule, time off, remote and hybrid work), only 55% of employees agree.
However, a silver lining emerges for organizations that demonstrate qualities of empathetic leadership. Employees who report high levels of trust, empowerment and care from leadership are 2.3x more likely to agree that their company has successfully navigated external pressures over the past two years and are 40% less likely to quit.
Generative AI in the new era of work
While generative artificial intelligence’s (GenAI) potential is still being realized, there is growing momentum and a generally positive outlook on how the technology will impact new ways of working, with 48% of employees anticipating GenAI will improve flexibility and 84% of employers currently using or planning to use the GenAI within the next 12 months.
However, despite both employees and employers ranking “learning and skills” as the number one factor to ensure employees thrive in new ways of working, only 18% of employers plan to provide training on GenAI-related skills.
Fealy says: “With the emergence of GenAI in the new working world, employers have an opportunity to focus on learning and upskilling, which is both attractive to talent and critical to anticipating the future workforce needs of the organization. Businesses that are technologically evolved, while placing humans at the center of this evolution, are inherently agile and resilient and will see markedly better outcomes than those that aren’t.”
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About the EY 2023 Work Reimagined Survey
The survey was conducted May 2023 through July 2023 and received responses from18,625 total respondents, 17,050 employees and 1,575 employers, across 22 countries and 25 industry sectors.
The survey was conducted using a third-party panel and targeted employers with a range of 500 to 15,000 employees.
For a CPE accredited results webcast on Tuesday October 17 2023, please register here: How to energize a workforce in the great rebalance