Attracting and retaining talent are top concerns for employers worldwide, yet more than a third (35%) of workers are likely to quit in the next 12 months, with GenZ (38%) and millennials (37%) to accumulate the most probabilitiesaccording to EY’s global 2023 Work Reimagined Survey.

The survey finds a discrepancy between the expectations and motivations of employees and employers, with the majority (58%) of employers believing that a slowdown in economic growth reduces the likelihood of employees quitting. Conversely, less than half (47%) of workers agree with this view, leaving employers at risk of underestimating the impact of continued labor market liquidity.

The recent, fourth edition of the survey recorded the views of more than 17,000 employees and 1,575 employers, in 22 countries and 25 sectors of the economy worldwide. The findings demonstrate that the changing balance of power in the workplace remains in favor of workers, despite the slowdown in economic growth.

In the period before the pandemic,53% of all respondents believed that the balance of power in the workplace was in favor of employers and only 24% in favor of employees. In the midst of the pandemic, in 2022, this ratio was 44% in favor of employers against 37% of employees, while today the ratio is 46% vs. 32%respectively.

As in last year’s survey, pay remains the main concern for employees (35%). However, they are the third biggest concern for employers, who are more focused on attracting new talent (37%) and retaining them (34%), highlighting diverging priorities in the workplace.

Employers also risk overestimating the influence of flexibility as an incentive to attract new talent. According to the research findings, 84% of employers believe that flexibility will positively impact talent recruitment, however, 63% of employees share this view. This is especially true for workers in knowledge-intensive industries, whose work has traditionally taken place in an office environment, for whom flexibility is now a minimum requirement, with more than a third wanting to work exclusively remotely .

Between employers and workers in knowledge-intensive sectors, there appears to be an “impasse” over remote work, flexibility and back to the office. While 47% of employers prefer their staff to be in the office two to three days a week, 50% of employees said they are unwilling to come into the office more than one day a week.

However, a number of factors drive workers towards office work, including the need to stay socially connected (36%), collaborate with colleagues (30%), and build and maintain relationships (29%). The research also finds that investment in high quality real estate is positively correlated with key parameters such as work culture, productivity and talent retention.

According to the survey, there is a clear gap between the optimism of employers and employees regarding new ways of working. While 73% of employers believe that managers and leadership are aligned with new ways of working (e.g., remote and hybrid working), only 55% of employees agree with this assumption.

There is, however, an optimistic side to the research findings on empathic organizations. Employees who report high levels of trust, empowerment and care from leadership are 2.3 times more likely to agree that their company has successfully dealt with external pressures in the past two years, and are 40% less likely to quit.

While the prospects for Generative AI (Generative AI) continue to be explored, there is growing momentum and a generally positive view of how the technology will impact new ways of working. 48% of workers expect GenAI to improve flexibility, while 84% of employers currently use, or plan to use artificial intelligence within the next 12 months.

However, despite both employees and employers ranking ‘learning and skills’ as the top factor in ensuring employee development and satisfaction in new working models, only 18% of employers plan to provide training in GenAI-related skills.