Employee well-being is becoming an increasing factor impacting their engagement in the workplace, according to Gallagher’s 2023 Career Wellbeing Report.

The report is the third installment of the larger Workforce Trends Report Series, providing insights from a total of 4,030 organizations across the U.S.

Nearly 4 in 10 employers (38 percent) increased the importance of career well-being in 2023, a 5-point year-over-year increase. Even so, the report found that career well-being still fell behind other factors such as employees’ emotional (74 percent), financial (49 percent) and physical (47 percent) well-being.

“When employers provide their employees with clearly defined career trajectories, their workforces are more engaged, retention rates climb and, most importantly, business outcomes improve,” said William F. Ziebell, CEO of Gallagher’s Employee Benefits & HR Consulting Division. “While this is common knowledge for decision-makers, just 4 in 10 (43 percent) provide their employees with support in developing and pursuing a career path. That means there’s significant room for improvement. The purpose of this study is to help employers optimize their investment in career well-being through employee engagement and communication strategies.

More than half of employers surveyed agreed (49 percent) or strongly agreed (9 percent) their employees were highly engaged, according to the Gallagher study, which was conducted between December 2022 to March 2023.

Presently, employers may rely on incomplete data to measure employee engagement, the Gallagher report stated, because just half of employers (51 percent) have conducted an in-depth employee engagement survey over the past two years.

“This shift away from more detailed research began during the pandemic because employee needs, wants and concerns evolved at such a rapid rate,” the report stated. “To capture changes, pulse surveys — abbreviated questionnaires requiring minimal time investment for participants or data analysis — became one of employers’ go-to tactics. The insights gathered were so useful that many employers continue to rely on pulse surveys to formulate their engagement strategies.”

With complex variables, such as employee engagement, pulse surveys are insufficient. Gallagher recommended employers transition back to annual surveys to guide decision-makers in determining an “organization’s strengths and areas for improvement.”

This will lead to significant cost savings compared to the cost of filling vacancies, the report added.

Another area that could use improvement involves communicating benefits that are available to employees.

“Familiar Human Resources priorities are repeating their well-established role as focal areas for effective talent management, including retention (66 percent), attraction (49 percent), training and development (35 percent), strengthening work culture (33 percent), and increasing engagement and productivity (27 percent),” the report stated, adding that achieving these outcomes relies on effective communication.

Half of employers (53 percent) rate their employees’ understanding of compensation and benefits as excellent or good, the research found.

In response to the current economy, nearly three-quarters of employers (74 percent) increased their emphasis on communicating about compensation and benefits in 2023.

Employers’ communication about business strategies, people priorities and work approaches is vital in influencing workplace attitudes and perceptions. Nearly every employer surveyed (93 percent) said they take a deliberate approach when it comes to internal communication. But of those, the research found that less than 1 in 4 (23 percent) claimed to have implemented a comprehensive internal communications strategy.

Employers remain skeptical on whether communications can drive change.

A little over one-third of employers (37 percent) believe their communications create tangible results or a desired change in behavior, the report found.

Gallagher recommended employers develop messaging through a marketing lens to improve outcomes. “This involves creating and leveraging communications that elicit an emotional response while reinforcing shared values,” the report stated.

Strategic planning and delivery can help ensure the workforce understands the organization’s priorities and direction, with the ultimate goal of improving the employee experience, the company stated.

“Employers that commit to employee engagement and communication strategies, measure their effectiveness, and adjust accordingly earn an advantage over the competition,” Ziebell said. “That’s because employees tend to give as much as they get. And we developed the Gallagher Career Wellbeing Report to help employers uncover the best practices to unlock their employees and the organization’s potential.”