Employees are prioritising pay while employers think an economic slowdown makes them less likely to quit, according to a survey by consulting group EY.
Its 2023 Work Reimagined Survey found that salary is the top concern for 35% of employees, while 58% of employers think staff will stay in their roles over fears about the economy.
The survey reveals a major disconnect between employees who are looking to quit their job in the next 12 months (35%) and employers’ prioritising talent retention.
Almost four in 10 Gen Z employees (born between 1996 and 2010), and a third of millennials (born between 1981 and 1996) said they would look for a new role in the next year.
Less than half of employees (47%) agreed that a slowdown in the economy meant they would be less likely to leave their job.
Employee retention
Business leaders must face up to new HR challenges
Pay remained the top concern for the second year, but was ranked as the third highest concern for employers – many of whom have been forced to hike wages due to high inflation in the last year.
EY’s survey also revealed a shift in the power balance between employers and employees.
Before the pandemic, 53% of respondents felt that employers held the balance of power in the workplace, and just 24% felt it lay with staff. This has now shifted to 46% towards the employer and 32% for employees.
Eighty-four per cent of employers thought that offering greater flexibility would positively affect their ability to attract talent, but only 63% of employees thought this was an important factor. For knowledge workers, flexibility is now a “baseline expectation”, EY said.
By contrast, employees are attracted to office-based arrangements where they can remain socially connected (36%) or collaborate with colleagues (30%). Employees also associated high-quality office amenities with better culture, productivity, and retention, the research found.
Roselyn Feinsod, Work Reimagined leader at EY said: “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.”
Employers and employees also had slightly different levels of optimism about future ways of working, according to EY.
Almost three-quarters of employers (73%) agreed managers and leaders were aligned with new ways of working (such as remote working or changing schedules), while 55% of employees thought this to be the case.
Employees who felt their leaders demonstrated care and trust, however, were 2.3 times more likely to feel their employer had handled external pressures, such as the pandemic, well.
On the topic of generative AI, 48% of employees thought it would increase levels of flexibility, and 84% of employers were currently using it or planning to in the next 12 months. Only 18% of employers planned to provide training for this, however.
Liz Fealy, deputy leader of the global people advisory services arm of EY, added: “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 organisation.
“Businesses that are technologically evolved, while placing humans at the centre of this evolution, are inherently agile and resilient and will see markedly better outcomes than those that aren’t.”
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