In today’s workplace, the pressure to attract and retain top talent is more intense than ever. Organizations are navigating a landscape shaped by shifting employee expectations, evolving skill demands and a growing disconnect between leadership perception and employee reality.
Yet many companies are still relying on outdated playbooks, investing heavily in recruitment strategies, compensation packages and workplace perks. Unknowingly, they are overlooking the deeper drivers of long-term engagement.
This is one of many critical insights from the first global report in Right Management’s 2025 The State of Careers series: “The Career Equation: What Attracts Talent Isn’t What Keeps Them.”
As a global talent development leader for over 45 years, Right Management partnered with Reputation Leaders to conduct independently commissioned, proprietary research across eight countries and four major regions, including North America, Latin America, Europe and Asia-Pacific. The study gathered insights from 2,402 white-collar employees and 1,029 business leaders, revealing a critical misalignment in how engagement is understood and acted upon. This, in turn, necessitates new engagement strategies across North America and the world.
The Engagement Illusion: A Global Disconnect
One of the most striking findings from the report is what Right Management calls the Engagement Illusion: a significant gap between how leaders perceive employee engagement and how employees actually feel.
- 53% of leaders believe their teams are fully engaged.
- In reality, only 37% of employees are fully engaged.
- Even more concerning, 41% of employees are disengaged, and 22% are only somewhat engaged — a group shown to be at the highest risk of leaving.
This illusion isn’t just a matter of differing opinions. It’s a strategic blind spot that leads organizations to prioritize the wrong initiatives, invest in ineffective solutions and ultimately lose the very talent they worked so hard to attract.
The consequences are real. According to Gallup, only 31% of U.S. employees are engaged — the lowest level in over a decade — costing companies billions in lost productivity. This external data reinforces the urgency of the issue: engagement is not just a soft metric; it’s a business-critical one.
Attraction vs. Engagement: A Misguided Strategy
So where does the disconnect begin? Often, it starts with a fundamental misunderstanding: what attracts talent is not what keeps them. This is what we call the Talent Paradox.
When considering new job opportunities, employees prioritize pay and benefits (36%) and job logistics (19%). These are tangible, immediate incentives that help lure candidates in. But once inside the organization, these factors play a much smaller role in long-term engagement.
Instead, employees stay when they feel aligned with leadership and the culture, see a future for themselves and have opportunities to grow. The report shows that fit and career development are far more influential in driving engagement than compensation or perks.
Yet many leaders continue to rely on attraction levers — competitive salaries, flashy benefits and brand reputation — assuming they’ll translate into retention. This flawed assumption leads to short-term wins but long-term losses.
What Really Drives Employee Engagement: Fit and Career Development
To build a truly engaged workforce, organizations must understand the deeper, more intrinsic drivers of employee engagement. The report identifies two key factors:
- Fit — alignment with leadership, team, values and organizational culture.
- Fit accounts for 37% of engagement variance among employees.
- Leaders, however, attribute only 23% of engagement to fit.
- Career Development and Support — the ability to grow and see a future within the organization.
- Career support and development drive 27% of employee engagement.
- Leaders rate it much lower, at around 20%.
Meanwhile, leaders overemphasize compensation (21%) and job logistics (17%), which have far less impact on actual engagement.
This misalignment means organizations are investing in the wrong areas, focusing on what looks good on paper rather than what truly motivates people to stay and contribute.
Regional Nuances: Global Engagement Isn’t One-Size-Fits-All
While the Engagement Illusion is global, its manifestations vary by region. Understanding these nuances is essential for multinational companies, needing to tailor their talent strategies across continents.
- In Latin America, career advancement and development are the top engagement drivers. Employees prioritize the likelihood of success and growth opportunities.
- In North America and Asia-Pacific, fit and confidence in organizational strategy play a central role.
- In Europe, alignment with organizational values takes precedence.
Despite these differences, one theme remains consistent: employees want to feel connected to their organization’s purpose and confident in their ability to grow within it.
Good Reasons to Make a Change: The Costs of Misalignment
When leaders focus on the wrong engagement and retention levers, they risk:
- High turnover among top performers
- Widening skills gaps due to reactive hiring cycles
- Reduced productivity and morale
- Missed opportunities to build a future-ready workforce
This isn’t just a retention issue — it’s a business continuity challenge. Organizations that fail to address the Engagement Illusion are making decisions based on flawed assumptions, undermining their ability to evolve and compete.
From Illusion to Insight: Retention and Engagement Strategies That Work
The good news? These challenges are far from unfixable. The report offers a clear path forward for organizations willing to listen, learn, and lead differently.
To close the gap between perception and reality, leaders must:
- Hardwire culture into talent strategy
Assess values and motivations during hiring. Coach leaders to role-model purpose and conduct meaningful career conversations. - Prioritize potential over performance
Use tools like 360 reviews and psychometric assessments to identify growth traits. Track internal mobility and retention trends to inform development decisions. - Build meaningful careers
Offer coaching, self-awareness assessments and visible career paths. Upskill managers to support career ownership and flexibility.
These strategies aren’t just about improving engagement and retention — they’re about building a resilient, adaptable workforce that’s ready for the future.
Conclusion: Employee Engagement Is a Journey, Not a Perk
As the “The Career Equation” makes clear, engagement isn’t a one-time fix or a line item in a budget. It’s a continuous journey rooted in connection, purpose and growth. Leaders who embrace this reality will build more loyal, productive teams and position their organizations for long-term success.
The Engagement Illusion is a turning point. New engagement strategies are essential to meet the needs of today’s evolving workforce. By shifting from assumptions to understanding, organizations can move from insight to impact — and from retention risk to workforce resilience.
Now is the time to gain all the insights from our all-new, groundbreaking report. Download it today, and if you like what you see, please send us a note. With the latest data-driven research, Right Management can ensure your employees grow — and your organization thrives.
