A survey from Boston Consulting Group reveals positive managerial oversight, respect and emotional support are key to retaining talent and maintaining employee satisfaction.
01/30/2024 1:00 P.M.
3 minute read
A recent survey from Boston Consulting Group (BCG) found that contrary to conventional wisdom, employees aren’t solely focused on pay, benefits or work hours. Instead, the key to retaining top talent lies in addressing employees’ emotional needs.
The findings, based on responses from 11,000 employees across eight countries (U.S., Canada, U.K., France, Germany, Australia, Japan and India), indicate more than a quarter of workers (28%) are contemplating a change from their current jobs within the next year.
BCG’s survey delved into over 20 different needs, categorizing them into functional and emotional aspects. While pay, benefits and work/life balance remained crucial factors when directly asked about job-changing motivators, a shift occurred when employees were presented with simulated purchase decisions. Emotional needs such as feeling respected, secure and valued began to feature prominently in the top five considerations.
The most important finding from the survey is the significant influence managers wield in meeting employees’ emotional needs. Managers, it appears, are the linchpin in shaping day-to-day experiences, impacting attrition rates and overall job satisfaction. The data reveals a 72% reduction in attrition among employees who are highly satisfied with their managers, highlighting the importance of effective leadership in retaining talent.
However, the correlation between employee satisfaction and great managers extends beyond retention. The survey highlights a 3.2x increase in employee motivation, a 13.9x increase in job satisfaction, and a notable rise in feelings of inclusion when employees have positive managerial experiences. This not only serves as a retention strategy but also contributes significantly to diversity, equity and inclusion goals within organizations.
“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.”
The survey establishes a clear link between managerial dissatisfaction and attrition risk, with a doubling of the risk (56%) for employees unsatisfied with their managers. Recognizing this, BCG researchers recommend a substantial investment in upskilling managers and incentivizing them to excel in their roles.
“The survey results show that creating material step changes in managers’ capabilities drives significant value,” the survey states.
Beyond great managers, the survey identifies three additional levers crucial to satisfying employees’ emotional needs:
- Supportive leaders,
- Access to resources, and
- Equal opportunities regardless of background.
When combined, these levers reduce attrition risk by about two-thirds, underlining the multifaceted approach needed to address the evolving needs of the modern workforce.
Overall, BCG’s research encourages a shift away from traditional thinking about what constitutes effective leadership and an embrace of innovative approaches that prioritize emotional connections, support, appreciation and motivation.
“Most companies think they are already investing in building their frontline leader capabilities, but what is required is a step change in thinking—fundamentally rethinking what great managers do and how they do it and investing in true enablement to sustainably build manager skills,” said Deborah Lovich, a managing director and senior partner at BCG, and co-leader of the team behind the study.
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