Do You Really Want Employees to Stay?

The factors affecting employee engagement have changed dramatically over the last few years. In consideration of off-site employees returning to the office/work site, baby boomers retiring in growing numbers, and the increasingly younger workforce, I was interested in exploring what the key drivers of employee engagement are today. As I frequently do when I examine a topic, I have based my conclusions on several large-scale surveys, the recent literature, and my own conversations with leaders and employees. While I have drawn information from numerous sources, the most influential were “13 Employee Engagement Trends for 2022” by Darshana Dutta of Vantage Circle (Vantage); “5 Culture Trends for 2023” based on the 2023 Global Culture Study performed by O.C. Tanner Institute (Tanner); Five Ways to Strengthen the Employee-Employer Relationship in 2023 by Ally MacDonald in MIT Sloan Management Review (SMR); “Coordinating Hybrid Work Schedules–5 Important Findings” by Jim Harter, Ben Wigert, and Sangeeta Agrawal of Gallup (Gallup); and Hybrid Work: Making It Fit with Your Diversity, Equity, and Inclusion Strategy by Bonnie Dowling, Drew Goldstein, Michael Park, and Holly Price in McKinsey Quarterly (McKinsey).

Introduction

The Baldrige Program’s 2023-2024 Baldrige Excellence Framework® defines workforce engagement as “the extent of workforce members’ emotional and intellectual commitment to accomplishing your organization’s work, mission, and vision.” Furthermore, “workforce members feel engaged when they find personal meaning and motivation in their work and receive interpersonal and workplace support.” In this column, I will explore the key drivers impacting workforce motivation and support in today’s environment.

Let me start with some data. According to a Gartner study in late 2021, the rate of employee turnover is forecast to be 50-75% higher than companies have experienced in the past. Furthermore, 65% of employees are reconsidering the role of work in their lives, and only one-third are considering opportunities in their existing organization as offering the solution to their work-life balance. As SMR points out, everyone in the work system is hurting. CEOs are hurting because employees are not eager to return to work and are leaving in great numbers. Middle managers feel that pressures on them are growing and that no one is paying attention to their needs. And individual workforce members are hurt that they are not trusted to do their work remotely.

Given the current state of disequilibrium and flux, organizations have a unique opportunity to reconsider their work environment. What should change and what should be retained? How do organizations establish an organizational norm and culture conducive to engagement and success?

I will explore these questions below in terms of the principal drivers of employee engagement looking forward, the implications for managers, and the role of senior leaders.

Hybrid Work—the Key Driver

After looking over numerous studies and having many conversations, I concluded that the overwhelming driver of employee engagement is the ability to perform hybrid or remote work. According to LinkedIn via chartr, in October–November 2022, 50% of job applications on LinkedIn were for remote-work positions, but remote-work postings made up only 15% of the listings on LinkedIn’s site. According to Gallup, for employees with remote-capable jobs, 90% prefer some degree of long-term remote opportunities, and nearly 80% expect this from their employer going forward. According to Vantage reports on studies conducted by Flexjob and Deloitte, respectively, 75% of workers report that they have greater productivity at home. They encounter fewer distractions (74%), less stress from commuting (71%), and fewer negative experiences with office politics (65%). Vantage also shared that 62% of millennials are willing to switch to gig economy work in the next two years.

For employees who prefer hybrid work, 71% say they would look for a new job if hybrid work became unavailable at their current job, according to McKinsey. Younger employees (18–34 years old) are 59% more likely to leave than older ones (55–64 years old). Reasons employees cite for the desire for hybrid work include health, family, and work-life balance.

There has been a recent tug between employers who want employees back in the office and employees who want to either work remotely or have hybrid work options. On February 4, 2023, The Washington Post reported that office occupancy had reached 50.4% of pre-pandemic levels. Experts believe this is where the new norm will settle. Allowing team-based decisions on which days to be in the office in a hybrid model is proving to be the most satisfactory approach for employees and employers.

Gallup explored the experiences of 8,090 hybrid workers in a study published in November 2022. Among the Gallup study participants, one-third of the employees are on-site one day per week; one-third, two to three days per week; and one-third, four days per week. Only 12% of the hybrid workers reported that they want to spend four or five days on-site in a typical week. Fridays are the most popular day for remote work. And the biggest employee mood shift takes place from Sunday to Monday. This shift is the largest Gallup has seen in its historical tracking of this indicator. Tuesdays through Thursdays are, therefore, the most popular days to be in the office.

Among the Gallup study findings, employee engagement is the highest for hybrid employees working on-site two to three days per week. Requiring a fixed number of days per week on-site lowers employee engagement. Employees with flexibility regarding which days they are in the office are more likely to believe their organization cares about them and less likely to look for other employment. An extraordinarily high percentage of hybrid employees (46%) are engaged at work if their team determines their hybrid work policy. However, only 13% of employees say their team has that opportunity.

The Other Four Major Drivers

I have identified four additional major drivers and three significant drivers. They are not mutually exclusive, as will be demonstrated through the descriptions below.

A Sense of Belonging

My first question when exploring employees’ sense of belonging was, What factors cause a person to gain a sense of belonging in their organization? Indeed, what makes an employee consider it their organization? There appear to be four main components of belonging: mutual respect, a sense of trust, transparency in information sharing, and team collaboration.

Team building/team collaboration is the most challenging component in today’s hybrid environment. Half of the respondents in McKinsey’s survey of 1,345 respondents across North America, Europe, and Australia said building stronger teams was very important. Techniques for building stronger teams include creating buddy systems and coaching employees through effective conflict resolution. A focus needs to be placed on opportunities for introducing and integrating new team members, especially in a hybrid environment. Team events help team building, as well. However, these events are tricky to plan. Employees are very protective of their “non-work” hours. And managers need to be sensitive to travel times, dietary restrictions, feelings about alcohol, timing of events within the work day, accessibility needs, and types of activities that won’t discriminate against any members of the team.

To achieve mutual respect and trust, team members should be encouraged to get to know each other, sharing how they like to interact/communicate and their individual work styles. Managers and leaders have to model genuine concern for the well-being of all employees and encourage the employees to do the same for their colleagues. Each employee needs to be appreciated for their unique talents and background. According to Douglas Ready, a senior lecturer at MIT Sloan, a fundamental loss of trust causes previously committed and engaged employees to leave the organization because it is no longer the organization they joined.

Transparency in information sharing means celebrating successes and sharing the status of the organization with employees—both the good news and the bad. Transparency requires two-way communication and feedback to employees/colleagues on input they provide.

According to data reported by Tanner, 72% of employees say it’s important to feel they are part of a community at work, and one of the top reasons employees quit is that they don’t feel a sense of belonging at work (51%). Organizations with a strong sense of community at work see a 62% higher level of employee tenure and a 58% lower probability of employees looking for a new job.

Flexibility

Flexibility allows employees control over when, where, and how they do their work to the maximum extent possible—including flexible hours and work-from-home policies. To most employees, flexibility is about supporting work-life balance—including extended parental and sick leave, opportunities to pursue personal interests, and recognizing all family care-giving and other non-work responsibilities. Flexibility means allowing employees to take time off without guilt or pressure.

According to McKinsey, 59% of employees rank work-life support as the top inclusion practice for hybrid working models. Furthermore, Vantage states that 28% of employees rank a lack of work-life balance as their top reason for leaving a job.

Inclusion

According to Vantage, companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns that are above the median for their sector. But achieving racial and ethnic diversity is only a good start. The Baldrige Excellence Framework considers diversity more fully, including “many variables, such as race, religion, color, gender, national origin, disability, sexual orientation, age and generation, education, geographic origin, and skill characteristics, as well as ideas, thinking, learning styles, academic disciplines, and perspectives.”

A truly just culture requires not just diversity, but also equity and inclusion—embracing the ideas, and supporting and enabling all employees to reach their full potential. In an inclusive organization, employees can bring their authentic selves to work and know they will be appreciated for their unique perspectives and contributions. Inclusion is the binding force that results in greater innovation, higher employee engagement, and higher organizational performance.

As people return to the on-site workplace, organizations should examine unintended biases in their culture and office etiquette, and establish new norms. As Allison Shapira stated in an HBR post, starting with examining how office dress codes should change, we can explore with employees all the old rules of office etiquette and rout out old biases.

According to the McKinsey study, an inclusive culture creates a distinct competitive advantage, with the following results:

• 47% increased likelihood of employees staying with the organization
• 90% greater likelihood of employees helping a colleague
• 7x higher likelihood that employees will say their organization is high-performing

A Sense of Purpose

Following the pandemic and societal issues of the last few years, employees are reexamining their purpose for working. Millennials, in particular, want to make a difference in the work they do. According to Tanner, 83% of employees say that “finding meaning in day-to-day work” is a top priority for them, and 69% would change jobs for more fulfillment. Currently, nearly one in three employees do not find their work fulfilling.

It behooves organizations to seek a meaningful purpose and communicate to employees how their work contributes to that purpose. According to a LinkedIn guide on organizational purpose, “the most admired companies are finding success at the intersection of profit and purpose.” According to LinkedIn, purpose-driven professionals

• are 30% more likely to be high performers,
• have 11% longer tenure,
• are 50% more likely to be in leadership positions, and
• are 47% more likely to be promoters of their employers.

The Three Significant Drivers

Opportunity for Growth

Employees want a job with the opportunity for ongoing career progression. According to Vantage, Gen Xers and Gen Zers won’t consider a job where their growth would be stagnant. They want an environment where they can learn, grow, and advance. Learning, development, and mentoring programs are important engagement factors.

According to Vantage, 47% of higher-educated workers and 43% of all employees say that a limited career path could get them to leave for a better opportunity.

Aligned with the opportunity for growth is the desire for challenging and exciting work. Vantage states that employees may stay without challenging work, but they will not be fully engaged.

Benefits

Employees want more flexibility in their benefits. They want options that fit their lifestyle and family responsibilities. According to Vantage, millennials are already the largest part of the workforce. In the next year, they will comprise half of the workforce and by 2030, three-fourths. Millennials (and others) want diverse choices in their benefits. Point systems, where they can choose up to a certain number of points, are ideal.

Other perks favored by millennials include free snacks, free breakfast, paid fitness club memberships, and abundant vacation time.

Rewards and Recognition

While rewards and recognition are an engagement factor, they are less important than many others (discussed above). Compensation should provide a living wage and be at least comparable to that of similar jobs in the geographic area.

That said, employees still enjoy celebrations. Organizations should continue to look for opportunities to celebrate successes, large and small, and recognize employees who contributed.

Among the reasons people leave a job, the least important among the employee engagement factors examined was receiving recognition for contributions (27%), according to Vantage. This number is still significant and should not be ignored.

Implications for Managers

Life has never been more challenging for managers than it is now. Employees want greater empowerment after their experiences of the last few years, yet they need more support than ever. And it must be the right kind of support delivered in the right way for each employee.

It is no surprise that managers are feeling burned out. According to Tanner, only one in three managers are now emotionally engaged at work, having experienced the highest drop in engagement over the last year. Managers are members of the group of “quiet quitters.”

I therefore thought it good to start by looking at what organizations and their leaders should do for managers before discussing what employees would like from their managers. According to Tanner, 61% of managers report having more responsibilities at work compared to before the pandemic. Responsibilities include hiring and training new employees, adapting policies as pandemic rules changed, and assigning and scheduling work with employees in flux. This increase in responsibilities has caused a higher likelihood of anxiety (+21%), increasing the chances of burnout (+520%), and worsening odds of engagement by 51%.

Just like employees, managers must be treated with respect, empathy, and care. In a time when employee mobility is high, managers need to be rewarded by senior leaders for encouraging employee mobility that leads to advancement or new skills within the organization, even if it means the employee will leave that manager’s team (see HBR post by Helen Tupper and Sarah Ellis). Finally, many of the considerations described below that employees want from managers, managers also want from senior leaders.

The basic role of the manager has not changed; it is to ensure that the work of their team or work unit gets accomplished. However, how the manager achieves that goal has changed significantly. As always, the manager is there to support their colleagues in achieving work unit success. But the last few years have heightened some elements of that support and added new ones. Drawing on the work of McKinsey, SMR, and Raghu Krishnamoorthy in an HBR blog posting, here are key elements of the support desired by employees today:

• Don’t micro-manage employees, micro-understand their work and their needs. Micro-understanding includes clearing pathways for the employee to accomplish their work, removing stumbling blocks and checking-in regularly without a heavy-handed checking-on the employee’s progress. Ask them to voice concerns, stresses, and successes.
• Coach employees to allow their ongoing personal development and success at work. Recognize their individual passions and aspirations.
• Be sensitive to family, health, and other important outside demands on the employees. Inquire and show empathy at the level the employee appreciates; don’t pry into their personal lives.
• Make sure everyone in the work unit is regularly updated on priorities. Be sensitive to communicating equally well with on-site and hybrid or remote employees.
• Empower employees to call team meetings when team cooperation, team problem solving, or team flexibility is needed.
• Resolve potential conflicts before they escalate. Be sensitive, once again, to the different work environments and access of on-site and hybrid or remote employees.
• Be equitable and inclusive of all employees in your interactions. Help them feel valued and contributors to a larger organizational purpose.
• Provide a mechanism for all employees to give you honest feedback and let them know how you will act on the feedback. Consider using a group survey tool like Are We Making Progress? to get periodic group feedback.
• Encourage cooperative work and learning among on-site, hybrid, and remote employees. Encourage them to get to know each other, their preferred working styles, and their preferred communication styles.
• Provide a forum for mutual celebration of successes and sharing of personal updates.

None of these desires are new, but they take on new dimensions in a blended work environment.

Implications for Leaders

Set organizational priorities. Be available. Communicate with transparency. Role model desired behaviors. Be sensitive to the needs of employees and managers. Be passionate about the organization’s work and compassionate to employees. Hold your fellow leaders accountable for their behaviors. Establish and share an organizational purpose that goes beyond the financial. Provide the resources employees need to do their work. Set metrics that align with your organization’s purpose, strategy, and employees’ work. Trust managers, onsite employees, and hybrid/remote employees to accomplish their work. Show personal appreciation for their efforts and successes.

These behaviors are simply stated, are not new, but are more challenging in the blended environment. Organizations that succeed in setting the right blended environment can see dramatic competitive success.

One final set of data from Vantage for leaders to consider relates to use of social media to transmit messages. An employee gets 561% more engagement on a message shared on social media than when the employer shares the message. An employee has 10 times more social media followers than their employer. And, according to a 2017 study, 41% of job seekers rate employee reviews higher than any other source.

A Final Word

In the recently published 2023-2024 Baldrige Excellence Framework®, key success factors and critical issues facing today’s organizations are woven throughout the Criteria for Performance Excellence®. Among those concepts, the following benefit from and are closely aligned with a highly engaged hybrid workforce:

• Agility, resilience, and transformation
• Workforce retention
• Innovation
• Diversity, equity, inclusion, and accessibility
• Societal contributions

There are many ways to use the Baldrige Program’s product offerings for self-assessment at all levels of an organization. Please consider this blog as a source of encouragement for taking a quick look at how your organization, its managers, and its senior leaders are doing at setting an environment for high performance through employee engagement.

Resources

Building Trust as a CEO in 2022: Are You Thinking about Focus and Constant Reinvention? (May 2022)
Archived Columns
 

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