Learn how to leverage technology and data analysis to avoid the pitfalls of presuming employees’ preferences and to increase competitive advantage.

Total rewards preferences among the workforce have always differed somewhat from employers' perceptions. In recent years, tight labor markets have given current and future employees more leeway to press their interests, often with high expectations that are challenging to meet. A blind spot to what engages and satisfies employees can misdirect financial investments and other efforts to attract, retain and engage talent. And it's a risk organizations can't afford to take.

What's behind the disconnect

Despite contradictory findings, there's a tendency among employers to believe their workforce is in a healthier state than it really is. And this view applies to all core dimensions of wellbeing — physical, emotional, career and financial.

Proper research is required to avoid the pitfalls of presuming employees' preferences are clearly understood. With the right data, HR leadership can dispel a common notion among senior executives that decisions about total rewards and other elements of the employee experience are more effective than they really are.

Organizational leaders are in a position of authority — and likely have relatively high autonomy and income — so they tend to be more upbeat about the quality of their own work-life experience. They score higher on factors related to wellbeing, satisfaction and engagement. Statistically, senior executives and other leaders are 1.4 times more positive about key aspects of their work environment, and life in general, than other employees.1 Because of this outlook, they tend to assume their preferences match those of other employees. What often transpires is a fundamental disconnect between employer perceptions and employee preferences. Dissolving this blind spot is the first step toward proactive and strategic change.

Aligning employer perceptions and employee preferences

Best practices for better communication among all employees and an optimal employee value proposition (EVP) help align employer perceptions and employee preferences. To close gaps and keep them closed, it's necessary to monitor, measure and improve these efforts. A commitment to regular adjustments can support attraction, retention and engagement indefinitely.

Two-way communication and informed action

It's difficult to overstate the value of communication in enhancing the employer-employee relationship. Blind spot issues can get in the way of realizing the benefits of connectedness, but a focus on direct and effective interaction with the workforce offers a solution. Once this practice is embedded, insights gained are likely to drive decisions based on better information about what employees value the most.

Regular feedback, whether gathered formally or in real time, allows closer alignment of resource investments with employee preferences. Engagement and employee experience surveys are a unique source for candid responses. And interactive opportunities such as town halls, skip-level meetings, group discussions, and onboarding and exit interviews add another dimension of insight on targeted topics. Along with the data, individual comments keep leadership in touch with the employee point of view.

Work-life experience positivity ratings — leadership vs. other employees1

Wellbeing Engagement Intention to stay Life factors satisfaction
Organizational factors satisfaction
Senior leader/executive 65% 74% 81% 69% 77%
Other employees 46% 52% 62% 48% 58%

To be effective, communicating with the workforce to understand what employees value most requires leaders to follow through on the information and insights they gather. Once expectations are set, a demonstrated effort to support their preferences is important to showing integrity of intent.

Employers can lay the foundation for success with a plan to compile findings, bring them to the executive table and incorporate actionable suggestions into total rewards and workplace culture. Employees who are confident in their organization's ability to take meaningful action are more likely to be engaged and productive.

Employees who are confident in their organization's ability to take meaningful action are
more willing to go above and beyond.1

Honing, promoting and actualizing the employee value proposition's promise

A well-designed EVP aligns the organization's mission and culture with employee values. Winning characteristics include the ability to both connect with recruits and motivate them to stay. Used consistently, this approach grounds investments and other decisions in wellbeing considerations, helping to steadily increase retention.

Research shows that less than half of workers agree that their organization's EVP reflects the actual work experience.2 Getting it right requires workforce input. A good indication that the EVP will land with employees is leaders' and managers' genuine inclination to speak confidently about it. They should be motivated to ask others for feedback, draw on elements that resonate the most and inform the sourcing team of these findings.

Keeping the EVP at the forefront of decision-making helps ensure a cohesive and genuine message to employees on how the organization truly identifies and differentiates itself.

The employee value proposition is the promise that convinces people to join an organization and the lived experience that motivates them to stay.

The imperative of an evidence-based approach

Data access and analysis provide the clearest window into strategic applications for optimizing the employee experience. When employers effectively use data for a targeted and personalized approach to addressing workforce preferences, they can increase their competitive advantage.

Among lean HR departments, technology advancements have quickly become a necessity for driving more efficient data collection, integration and use. Automation is already helping to streamline some tasks, a first step toward allowing more focus on processes that are still improved by human imagination and insight.

Assessing and reassessing for a steady ROI

Assessing current employee experience data at regular intervals helps ensure that employers stay tuned to quickly evolving preferences. Also key is interpreting and applying direct feedback from deliberate and strategic communication with the workforce.

When considering investments, testing both existing and new initiatives is likely to offer more precise and informative insights into valued programs and benefits than external benchmarks alone. Results should also help to inform personalization and implementation choices. But the guiding principle for success is whether decisions embody the EVP. Following this process provides a continuous feedback loop that allows this foundational strategy to evolve.

There's no question that attraction and retention are top business priorities in tough labor markets, and recent experience has reminded employers of just how unpredictable and persistent conditions can be. Employees have set increasingly high standards for what they expect from their work experience, pressing employers to prioritize total rewards and a workplace culture that stand up to the competition.

The learning curve isn't easy, especially when what employees value at the time they're hired may change later on. As always, salary and benefits tend to be the top factor in choosing an organization. Engagement and the intent to stay are then driven, for the rest of their tenure, mostly by meaning and purpose in their roles, long-term career development opportunities and the employers' ability to manage change.

Aligning financial investments with employee preferences is now an ongoing change management process of its own. However, through intentional and iterative approaches, and with input from their workforce, leadership can guide executive-level decisions that are verified and refined by first-hand experiences on the ground. Twenty-twenty vision so often benefits from a closer view.

Author Information

Alex Manfrediz

Alex Manfrediz

National Managing Director, People & Workplace Insights


1"2023 Workforce Trends Report: Workplace Wellbeing Index," Gallagher, May 2023. Australia edition.

2"Organizational Wellbeing Poll: Company Culture and Trust, and Employee Awards and Recognition," Gallagher. Internal unpublished data.


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