Inclusion Is Critical To Attract, Engage & Retain Diverse Workforce

Boston Consulting Group’s (BCG) new employee satisfaction survey over 11,000 workers in eight countries, including India, Australia, Japan, US, UK, Canada, France and Germany, has found that 28 per cent of workers do not see themselves with their current employer within a year. With 26 per cent of the Indian employees surveyed at risk of leaving this year, the task for employers in the country is as challenging as it is for the global peers. The key will be for employers to prioritize and invest in the most optimal way to understand what really matters to their employees, says the BCG survey conducted between October 6 and 30, 2023 and released recently.

“The survey is timely and aptly called “What Really Matters At Work, And Why We Should Care”, because there is an urgent need for employers around the world to help their employees find the right balance between functional drivers such as pay and job hours, versus emotional factors such as workplace respect, fairness and recognition,” says Neetu Chitkara, MD & Partner, BCG India, where she leads People & Organizational Practice.

In the survey, BCG tested over 20 different needs, with roughly half being functional needs such as pay, hours and benefits, and the other half being emotional needs, such as feeling valued and supported and doing the work you enjoy. Not surprisingly, when asked directly what would drive them to take a new job, employees’ answers were focused on functional factors, with pay being the overwhelming top choice, followed by benefits and perks, work/life balance, work they enjoy and care about and better career learning opportunities.

The future of work really revolves around the quality of talent and job satisfaction. In our post pandemic world, where unemployment is at record lows, and living and working amid uncertainty is almost a norm, the challenge for employers is becoming more complex than ever before.

However, when employees were asked to make choices between different aspects of work—simulating a purchase decision—emotional needs crept into the top five. Pay and hours still dominated as the top two choices, but feeling fairly treated and respected, feeling like I have job security and doing the work I enjoy—all emotional needs—moved into third, fourth and fifth place, respectively.

Most significantly, when the 20-plus work attributes from the survey were correlated with employees’ stated intention to stay in or leave their jobs, functional benefits—including pay—dropped toward the bottom of the list, and emotional factors dominated the top five most important factors: job security, being treated fairly and respected, enjoyable work, feeling valued and appreciated and feeling supported. If companies want to keep their employees, they need to meet these emotional needs.

According to BCG’s analysis of the survey data, the most powerful lever for delivering these emotional needs is the manager. Managers exercise maximum influence over their employees’ day-to-day experiences—whether positive or negative. In fact, great managers are associated with a 72 per cent reduction in attrition when comparing employees who are very satisfied with their managers with those who are very unsatisfied. This was also the lever with the strongest influence on attrition risk across all surveyed countries, except for India where it was the second strongest.

Setting retention aside, comparison among these same employees shows that great managers are also associated with a 3.2x increase in employee motivation, a 13.9x increase in job satisfaction and a significant increase in feelings of inclusion.

“Managers also play a key role in companies achieving their diversity, equity and inclusion goals,” said Gabrielle Novacek, Managing Director & 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,” Novacek added.

The next three levers most correlated with satisfying employees’ emotional needs—among 300 different workplace characteristics ranging from upskilling opportunities to working model and leadership sentiment—were (1) supportive leaders, (2) access to resources to do one’s work, and (3) access to opportunity, regardless of employee’s background. All three had an impact very similar to having a great manager, when taken in isolation—and pulling all four levers together reduces attrition risk from the baseline global average by about two-thirds, from 28 per cent to 9 per cent.