EY Study: Pay, well-being, and flexibility prolong workplace tensions as more than a third of employees likely to quit

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.

Claudia Sofianu, Partner, EY CESA People Advisory Leader: “We recognize the same kind of tensions in Romania as anywhere else in the world. On one hand, employers try to find the key to resolve these tensions through trial and error, lessons learned from mistakes, and ongoing discussions with their employees. On the other hand, the dynamics of the labor market require, in a similar way as in recent years, that employers not only pay attention to their employees’ needs, but also anticipate their changing priorities.”

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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.

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.