Research Brief

Whatemployees
expect in 2021
Engaging talent in the shadow of COVID

1What employees
expect in 2021

What employees expect in 2021

2020 is a year that will live in infamy. From lockdowns to layoffs, the pandemic
wreaked havoc on every aspect of daily life. Companies and consumers cut corners tomake ends meet—and hoped that relief would come quickly in 2021.
But as time marches on, uncertainty remains. Slow vaccine rollouts have delayed
highly anticipated re-openings. Economic recovery has been hamstrung. And theglobal labor market, which shed the equivalent of 255 million full-time employees in
2020, could lose as many as 130 million more in 2021.1 In the US, women and peopleof color have borne the brunt of these losses, exacerbating the inequality that alreadyexists in the workforce.2
This turmoil continues to be traumatic for employees and executives alike. But nearlya year into the pandemic, it’s time to focus on the future. To better understand how
employee perspectives shifted in 2020, as well as their motivations and aspirationsfor 2021, the IBM Institute for Business Value (IBV), in cooperation with Survey
Monkey, surveyed more than 14,000 consumers across 9 countries in January.
We found that employees were generally satisfied with how their employers
supported their well-being during the pandemic. Most employers received average orabove-average marks for providing for the physical, mental, and financial well-beingof employees. But fewer than 1 in 5 workers give excellent marks in any area.
This should give employers pause. While they met employee expectations last year,efforts that hit the bar in 2020 might fall short going forward. If executives want toretain top talent—particularly Gen Z and Millennials—they will need to understandemployees’ evolving expectations, motivations, and aspirations for 2021.

2

What employees expect in 2021

What employees expect

This broad range of desires and expectations confirms that employees are looking
for more than compensation from their employers. This is particularly true foryounger workers. Only 29% of Gen Z indicated competitive salary and benefits
were key to their engagement, compared to nearly half (49%) of those over 55.

Looking to the future, employee demands appear to be as diverse as the individuals
themselves. When asked what employers should offer to engage employees, workers
placed work-life balance (51%) and career advancement opportunities (43%) at
the top of their list of priorities, with compensation and benefits (41%) and employer
ethics and values (41%) following close behind. And more than a third of employees
named continuous learning opportunities (36%) and organizational stability (34%)
as key engagement factors (see Figure 1).

When asked how well their employers were living up to these expectations,employees appeared underwhelmed. Only about half of workers gave theiremployers high marks on delivering what is most important to them across the board.
While 55% of employees scored their employers highly in ethics and values, fewer
than half were happy with career development and advancement opportunities(48%), and compensation and benefits packages (47%) (see Figure 2).

Figure 1

Workers want it all
Employee expectations extend well beyond compensation.

51%
Work-lifebalance

43%
Careeradvancement
opportunities

41%• Compensation
and benefits• Employer ethics
and values

Q: What organizational attributes do you think are most important for an employer to engage employees?

36%

Continuous
learning
opportunities

34%

Organizational
stability

3

What employees expect in 2021

Bridging the gap

This level of misunderstanding can feel deeply frustrating to employees who havemade clear requests and demands for what they need in the workplace. In ourJanuary 2021 survey, more than one-third of respondents indicated they and theircolleagues have asked their employer for more flexible work arrangements, improved
compensation and benefits, and more physical and financial safety and security in thepast year. However, only about half of employees give employers high marks on theirability to deliver on what is most important to them.

To demonstrate that they are committed to supporting employees more holistically,some big-name brands have rolled out COVID relief programs aimed at boosting
employee satisfaction, retention, and engagement. For example, in January, megaretailer Target announced it would extend its coronavirus benefits into 2021. Free
virtual healthcare, quarantine and confirmed illness pay, and a backup family carebenefit were some of the offerings that drove the brand’s spending on employee
health, safety, and wellbeing in 2020 up $1 billion over what it spent in 2019.3
This type of employee-centric investment is one of the key factors that separate
outperforming organizations from their peers, according to our 2021 IBM CEO Study.
Outperformers, those that reported high revenue growth leading up to and during
2020, said they support employee well-being, even if it hurts profitability, 99% more
often than their underperforming peers.4
But even when executives say they are supporting their employees, there may
still be a gap that needs to be bridged. Recent IBV research found that while 80% ofexecutives said their companies were supporting the physical and emotional healthof employees, only 46% of employees agreed. Similarly, while 76% of executives
said their organizations were providing adequate training on new ways to work
during the pandemic, only 38% of employees said the same.5

Figure 2

Delivery failure
Only about half of employees give their employers
high grades on meeting expectations.

55%
Ethics and value

48%
Opportunities forcareer development/advancement

51%
Work-life balanceand stability

47%
Competitivecompensation
and benefits

Q: How well does your employer’s organization deliver on these attributes? Percentages indicate
respondents that selected either “Very good/B” or “Excellent/A.”

30%

4

Battling employee burnout
Closing this gap is key to attracting, retaining, and engaging employees in 2021.
And that may require executives to rethink how supporting the workforce aligns
with their other top priorities.
Our 2021 IBM CEO Study, for instance, found that business leaders are focused on
accelerating their digital strategies, which they see as essential drivers of future
success. As priorities have shifted due to COVID-19, organizational barriers to techadvancement have fallen by the wayside. And two-thirds of executives say that thepandemic has allowed them to advance specific transformation initiatives that
previously had encountered resistance, according to recent IBV research.6
The opportunity to leap-frog forward is both exciting and essential—but the rapid
ramp-up is also taking its toll on employees. September 2020 research fromMicrosoft found that 30% of global information and front-line workers say thepandemic has increased their feelings of burnout at work. Data compiled fromMicrosoft Teams shows that workers have been in significantly more meetings andmanaging more incoming chats—including twice as many after-hours messages.7
This may start to explain why our survey found that, in the midst of a massive global
economic crisis, 1 in 5 employees voluntarily changed employers in 2020. Together,
Gen Z (33%) and Millennials (25%) accounted for more than half of these job-hopping
respondents, demonstrating the urgent need for employers to find ways to retain
young talent. Work location flexibility was the top reason people changed jobs (32%),
with a desire to find more purposeful and meaningful work following close behind(27%). About 1 in 4 cited a desire for better benefits and support for their wellbeing,or they were looking for a salary increase or promotion (see Figure 3).

What employees expect in 2021

Figure 3

In search of greener pastures
The pandemic didn’t stop employees fromchanging jobs in 2020.
0%

10%

20%

30%

I needed more flexibility in myschedule or work location

40%

32%

I wanted to find more purposeful,meaningful work

27%

I needed more benefits and support
for my well-being

26%

I wanted to work for a company that
better fits my values

25%

I was looking for a salary increaseor promotion

25%

I was worried about my employer
staying in business/remaining open

25%

I was burned out (i.e. lack work/life balance)

4%5%
Mymanager
was not supportive
enough of me or my career

I didn’t have good career advancement
prospects or job security
Q: What were your main reasons for changing employers?

19%
19%
19%

5

What employees expect in 2021

Looking farther into 2021, this trend seems to be intensifying. More than 1 in 4
employees are looking to make a move in 2021—and more than 60% of that group
had already changed employers in January. Gen Z and Millennials make up the largest
portion of this group.

Those poised to leave their current jobs cited many of the same reasons as those whochanged employers in 2020. However, salary increases and promotion opportunities
jumped to the top of the list for 2021, with more than a third of respondents citingthese financial motivators as the top reasons they want to make a career move. About
1 in 4 still identify support for well-being and a desire for more meaningful work as
key motivators.

Figure 4

On the hunt
A slow economic recovery hasn’t soured
employee perspectives on job prospects.

27%of employees are planning tochange employers in 2021.

With this many employees looking for new opportunities in a tight labor market,
executives should be wary of what will happen when hiring accelerates. And that may
not be as far off as US government job figures make it seem. ManpowerGroup’s latest
global employment outlook survey found that, from Q4 2020 to Q1 2021, hiring
intentions improved in 32 of the 43 countries where employers were surveyed.8
And employees are confident in their abilities to land these new roles. According toour survey, 87% of employees claim they have the necessary skills to meet theirjob/employment goals in 2021 (see Figure 4).
While this self-assessment may turn out to be a bit over-confident, organizations
should be concerned about how a mass exodus of valuable talent could impact their
future performance. Our 2021 IBM CEO Study found that outperforming CEOs see
industry-specific skills (70%) and technology skills (69%) as critical to their successover the next 2 to 3 years—which puts a premium on retaining both industry veteransand digital natives.9The key to success in 2021 likely comes down to communication. By building adialogue and offering transparency into the decision-making process, companies havea chance to build deeper, more meaningful relationships with their employees. With
the right intel, they can invest more in the initiatives their employees really want—andboost employee engagement and loyalty for the long term.

87%of employees claim they have theskills needed to meet their careergoals in 2021.

Q1: Do you plan to change occupations in 2021?
Q2: Do you have the necessary skills to meet your job/employment goals for 2021?

6

What employees expect in 2021

Action guide

The right partner for a changing worldTips for employers:
1. Proactively engage with employees to better understand what is really important tothem and their careers. Employees are more likely to be their authentic selves andopen up when employers have created a culture of belonging. Employees haveoptions. They will gravitate towards employers who are listening and taking action.

At IBM, we collaborate with our clients, bringing together business insight,
advanced research, and technology to give them a distinct advantage in today’s
rapidly changing environment.

2. Foster a culture of perpetual learning that rewards continual skills growth. Most
employees want to succeed and grow. Employers can either create learning cultures
to nurture the skills and talents of their people, or wait for the exit interview to findout which of their competitors are.

The IBM Institute for Business Value (IBV) delivers trusted, technology-based
business insights by combining expertise from industry thinkers, leading academics,
and subject matter experts with global research and performance data. The IBV
thought leadership portfolio includes research deep dives, benchmarking andperformance comparisons, and data visualizations that support business decision
making across regions, industries and technologies.

3. Don’t take people for granted. The pandemic has reminded us how fragile life is.
Everyone has been through a lot in the past year. Employers must demonstrateempathy and care for their employees holistically—by considering their physical,
mental, and financial well-being.
Tips for employees:
1. Be your own advocate. You can’t expect your employer to know what is important toyou if you don’t tell them. Be transparent and communicate your career goals clearly
to your employer.
2. Commit to continuous learning. Ultimately, we are all accountable and responsible
for our own careers and our own personal success. Skill requirements are changing
rapidly. Keeping your skills current and relevant will be critical to your future career
growth.
3. Don’t compromise on your values...or health. Most of us spend a majority of ouradult lives working. We should all feel comfortable bringing our full selves to work
every day without fear of judgment or retaliation. Research shows that people wholive more authentically are prone to greater mental health—which generally equatesto greater physical health.10 Many leading organizations and companies are working tocreate cultures of belonging to enable employees to be their authentic selves.

IBM Institute for Business Value

For more information
Follow @IBMIBV on Twitter, and to receive the latest insights by email,visit: ibm.com/ibv

Notes and sources© Copyright IBM Corporation 2021

1

“ILO Monitor: COVID-19 and the world of work. Seventh edition.” International LabourAssociation. https://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/documents/briefingnote/wcms_767028.pdf

2Kurtz, Annalyn. “The US economy lost 140,000 jobs in December. All of them were held bywomen.” CNN Business. January 8, 2021. https://www.cnn.com/2021/01/08/economy/women-job-losses-pandemic/index.html

IBM Corporation
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Produced in the United States of America
February 2021

3Mayer, Kathryn. “Why Target is extending COVID benefits, handing out another bonus.”
Human Resource Executive. January 26, 2021. https://hrexecutive.com/
why-target-is-extending-covid-benefits-handing-out-another-bonus/?eml=20210126&oly_
enc_id=6911D1584989B2Z

4“Find your essential.” IBM Institute for Business Value. Accessed February 3, 2021. https://www.ibm.com/thought-leadership/institute-business-value/c-suite-study/ceo5Anderson, Cindy, Anthony Marshall, Dave Zaharchuk. “Closing the chasm.” IBM Institute forBusiness Value. Accessed February 3, 2021. https://www.ibm.com/thought-leadership/
institute-business-value/report/closing-chasm

6

Anderson, Cindy, Anthony Marshall. “COVID-19 and the future of business.” IBM Institute for
Business Value. Accessed February 3, 2021. https://www.ibm.com/thought-leadership/
institute-business-value/report/covid-19-future-business7

Spataro, Jared. “A pulse on employees’ wellbeing, six months into the pandemic.” Microsoft.
September 22, 2020. https://www.microsoft.com/en-us/microsoft-365/blog/2020/09/22/
pulse-employees-wellbeing-six-months-pandemic/#:~:text=The%20pandemic%20
increased%20burnout%20at%20work%E2%80%94in%20some%20countries%20
more,feelings%20of%20burnout%20at%20work.

8“ManpowerGroup Employment Outlook Survey.” ManpowerGroup. Accessed February 3,2021. https://www.manpowergroup.com/workforce-insights/data-driven-workforce-insights/manpowergroup-employment-outlook-survey-results#%20

9“Find your essential.” IBM Institute for Business Value. Accessed February 3, 2021.
https:// www.ibm.com/thought-leadership/institute-business-value/c-suite-study/ceo

10 “Authenticity as a predictor of mental health.” Klinička psihologija. December, 2017.
https://www.researchgate.net/publication/324215160_Authenticity_as_a_
Predictor_of_Mental_Health

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