Employees in 2025 are driven by three core psychological needs
You can build rocket engines and write flawless code, but if you don’t secure the basic human needs of your workforce, your company won’t go far. In 2025, we’re seeing with clarity that the fundamentals of motivation at work haven’t changed, but the expectations around how they’re delivered have.
Employees tell you what they want directly: they want job and financial security, meaningful work, and clear paths for growth. And they expect companies to take those seriously, as non-negotiable parts of the employee value proposition.
According to Fractional Insights data, 95% of employees identify “security” as a core driver, and 63% rate it as “extremely important.” It’s about confidence that your financial future is safe, that your role won’t vanish without warning, and that performance is rewarded predictably.
Significance also ranks high, with 92% of employees valuing it and 52% calling it essential. What this means is straightforward: People want to see that they matter in real contributions to progress that leadership acknowledges.
Growth rounds out the big three. Around 90% of employees say it’s important, and 41% demand it as a top priority. They’re looking for skill development, career advancement, and the tools to be better tomorrow than they are today.
“Retention-tension” redefines workforce loyalty by masking underlying flight risks
Think your team’s loyal just because no one’s handing in resignation letters? That’s not a reliable signal anymore. We’re in the middle of a shift where traditional retention metrics are outdated. They paint a picture that’s far too comfortable, and wrong.
This is what researchers are calling “retention-tension.” On the surface, employees seem committed to their companies. But beneath that, a significant portion is quietly open to leaving if a better opportunity shows up. According to Fractional Insights, for every 100 employees not actively saying they want to leave, 23 would still walk out tomorrow if the right offer came along. That’s a 58% gap, completely missed if you’re only looking at declared intent to stay.
Why does this matter? Because the cost of talent loss is high, in time, in output, and in competitive edge. Losing skilled people directly hits how fast your teams move, how well you build, and how far you innovate.
And this latent risk is growing precisely because those core needs, security, significance, growth, aren’t always being met. When you underdeliver on those consistently, your people start scanning the horizon.
You can’t afford to misread this. Don’t wait until your top performer is halfway out the door before you realize you missed the signs.
The fix? Start treating retention like strategy. Put effort into understanding unspoken sentiment, and design employee experiences that actually anticipate what people value. You don’t build loyalty by default. You engineer it.
The great resignation was a profound, values-based reassessment of work
The headlines misread it. What we called “The Great Resignation” was never about people quitting on work. It was about people choosing to engage on their own terms, reassessing the return on their time and talent. From 2020 through 2022, this shift became visible across industries as millions left jobs after deciding that the value exchange no longer made sense.
The real story is in the reassessment. Remote work proved what many suspected: productivity doesn’t require a physical office. Once that belief was broken, people began questioning more, what is work for, what am I getting from it, and does this organization reflect what matters to me?
That period redefined the psychological contract between employers and employees. It wasn’t about rejection. It was about realignment. Workers realized that time is finite, and they demanded more than task completion and compensation. They wanted meaning, autonomy, and stability from systems that weren’t built to provide them.
This shift carries through to 2025. Employees now evaluate employers through a different lens, one focused on human needs, not just wages or brand names. If your company still operates with outdated assumptions about why people show up, you’re based on a model that’s no longer working.
Executives and founders should understand that this is a structural, ongoing redefinition of how people engage with work. Ignoring it or minimizing it means missing the most important trend in workforce behavior in the last two decades.
Stability has emerged as a foundational criterion in modern hiring conversations
The conversation around benefits, perks, and flashy culture elements has shifted. Today, talent wants to know: is this organization stable? Can I rely on my role and income? What used to be nice-to-have metrics are now the priority filter during interviews and negotiations.
This is driven by the economic and operational realities of this decade. People have seen layoffs, market corrections, and unpredictable restructurings. As a result, job applicants now ask questions that used to be unsaid: How secure is this team? What’s the outlook for this product line? Is this compensation model protected against sudden volatility?
According to Fractional Insights, 63% of employees rate security as “extremely important.” That’s a clear signal that safety outweighs perks. Candidates are making long-term judgments on corporate resilience.
This shift is especially visible in tech. Ann Kuss, CEO of Outsource Your Team, notes that questions about role stability are now standard in recruitment discussions. Three years ago, they weren’t part of the script.
Executives must recognize that narrative materials like culture decks or flexible hours won’t move the needle if organizational stability doesn’t check out. It’s time to be transparent about business health, growth strategy, and how roles align with strategic priorities.
And if your business genuinely can’t offer long-term certainty? Then shift focus to honesty, clarity on compensation models, and tangible growth pathways. Stability doesn’t always mean permanence, but it does mean predictability. That’s what today’s workforce values, and what leadership should deliver if talent retention is a goal.
The quest for meaning and alignment is increasingly overtaking compensation as a primary motivator
Compensation still matters, but it’s not enough. In 2025, employees are sorting companies by values and purpose as much as by salary bands. If you’re offering a paycheck but not a reason to care, you’re not building long-term loyalty. People want to work in places that reflect who they are and what they believe in.
This shift shows up in hiring data, retention trends, and exit interviews. Workers evaluate leadership behavior, company values, and whether they’ll be treated with respect. They’re not waiting for long-term tenure to feel seen, they expect connection and purpose immediately.
Jen Paterno, Senior Behavioral Scientist at CoachHub, put it clearly: “Today’s workforce is seeking more than just a paycheck or perks. They want purpose, alignment with personal values, and authentic connection.” When people don’t get that alignment, they disengage or exit.
This has serious structural implications for leadership. You cannot bolt on purpose through a campaign or internal email. It needs to be integrated at every level, from how you onboard to how you promote. Trying to retain employees with compensation alone, while ignoring their identity and values, creates diminishing returns.
Executives should look critically at whether their teams understand what the company stands for. If that answer isn’t obvious to employees without explanation, you’re likely operating with an invisible engagement ceiling.
Generational shifts, spearheaded by gen z, are reshaping workplace expectations and organizational culture
The incoming generation isn’t playing by old rules. Gen Z employees are direct, values-driven, and unafraid to challenge outdated systems. They grew up with global visibility, digital fluency, and constant access to information. They expect corporate environments that reflect that context, transparent, inclusive, and purpose-led.
This shift is already visible across sectors. Gen Z isn’t interested in pleasing outdated power structures or quietly moving up a hierarchy. They value roles where authenticity is encouraged, performance feedback is honest, and leadership is approachable. Titles and compensation are only relevant if the work has meaning and the environment supports transparency.
Jen Paterno captures this well: “Gen Z is the current primary driver. They’ve grown up questioning institutions, advocating for inclusion, and expecting transparency… demanding a new kind of currency, authenticity, flexibility, and purpose.”
Organizations that ignore this shift are already feeling the impact. High turnover, slow cultural engagement, and internal friction often point back to a misalignment between generational expectations and leadership assumptions.
The implication for C-suite leaders is simple. Culture isn’t fixed. If Gen Z sees gaps in inclusion, flexibility, or purpose, they’ll move elsewhere, or they’ll disengage in place. To stay relevant and competitive, executives should listen deeper, rethink outdated workplace assumptions, and allow culture to be led from where the momentum is already growing.
The concept of work-life “fit” is replacing the outdated notion of work-life balance
The phrase “work-life balance” no longer matches how people think about time. In 2025, most employees want flexibility that reflects reality, as it changes. They aren’t aiming to split life and work into fixed compartments; they’re looking for a model where their work fits around their individual schedules, phases of life, and energy patterns.
This change has been accelerated by the normalization of remote and hybrid models. With rigid schedules increasingly seen as unnecessary or inefficient, employees now expect autonomy to manage when and how they work. Personalized work structures are becoming a core recruiting and retention factor, especially for experienced and high-demand talent.
Ann Kuss, CEO at Outsource Your Team, observes that “we now hear more about work-life fit and people want personalized benefits.” She makes it clear that organizations are lagging behind: “Companies are not ready to shift to fully remote working in many cases even though that’s what candidates want.”
If you’re forcing people into outdated working models, you’re cutting into productivity and engagement. The change in terminology, from balance to fit, is a real signal that expectations have evolved, and that one-size-fits-all benefits no longer resonate.
For leadership teams, this means rethinking design at the structural level. Make benefits and time policies adaptive. Break open legacy constraints. Ensure autonomy isn’t just promised, but supported at scale. The cost of ignoring flexibility is missed performance and lost talent.
A growing disconnect between executive visions and employees’ day-to-day experiences
There’s often a gap between what leadership believes their culture looks like and how employees actually experience it. In 2025, that gap is widening. Return-to-office mandates, rigid structures, and shallow engagement programs are clashing with what employees value: transparency, relevance, and trust in leadership.
Executives may outline broad cultural principles, collaboration, innovation, inclusion, but if those don’t show up in people’s daily interactions, they’re just words. Today’s employees measure culture based on observation, how decisions are made, how leaders behave, how feedback is handled.
Jen Paterno, Senior Behavioral Scientist at CoachHub, makes this distinction clear: “There’s a growing disconnect between the culture executives envision and the reality employees experience.” She points to a structural factor, shrinking middle management, which has made Gen Z and other frontline employees responsible for managing tone and expectations in real time.
When mid-level leadership thins out, your organizational clarity becomes uneven. Culture becomes fragmented. It’s shaped by the people closest to daily project execution. This presents a challenge and an opportunity. Organizations that accept top-down control of culture is weakening can redesign systems to support cultural emergence from within.
For the C-suite, this is now a risk area that needs serious attention. If your internal engagement data feels out of step with performance metrics or turnover, investigate how communication flows and values are demonstrated, daily. Trust and alignment don’t happen automatically.
AI is introducing a dual challenge of balancing job security and human contribution
AI is already reorganizing teams, roles, and business models. As employers increase AI-driven restructuring efforts, many employees are left asking two direct questions: Will I still have a job? And if so, will it still matter?
According to data, 40% of employers plan workforce restructuring tied to AI. At the same time, only 31% of employees are engaged, a decade low. When automation increases and leadership fails to provide clarity, engagement drops. People need to understand what AI means for them specifically.
This becomes a leadership responsibility. When employees feel their security is uncertain and their value is unclear, performance and retention both degrade. It’s about defining the role of human intelligence inside a business increasingly shaped by artificial intelligence.
Dr. Shonna Waters, CEO of Fractional Insights, explains this well: “Organizations face a significant challenge from employees who simultaneously seek greater security about how their roles will evolve while needing assurance that their work still matters.” That dual need, security and significance, must be acknowledged and addressed.
Business leaders should integrate AI with intentional design. Don’t hide behind vague announcements. Deliver clarity on which roles are impacted, how decisions are made, and where human skills provide irreplaceable value. Building trust during transformation is what sets enduring organizations apart from disrupted ones.
The skill revolution is intensifying pressure on employees, driving anxiety and the urgent need for upskilling
By 2030, 39% of the core skills required in the workforce are expected to change. This pace of evolution is already creating visible anxiety in employees across functions. Most know they need to adapt, but few feel supported to move fast enough.
Recent findings show that around 75% of employees feel the urgent need to upskill. And while 90% value growth opportunities, many also fear being left behind as job requirements evolve faster than they can keep up. That’s real pressure, on confidence, performance, and retention.
Ann Kuss, CEO at Outsource Your Team, notes that in the tech sector, candidates are prioritizing learning and career development programs. Companies that lead in this space are winning talent, while others lose out for being slow or vague in their approach.
Upskilling isn’t just a perk anymore. From a leadership perspective, it’s now a core part of organizational resilience. If your employees don’t believe they can grow with you, they’ll look for places where they can. And if your systems don’t support rapid, accessible skill progression, your risk of obsolescence increases, internally and competitively.
Executives should approach this as infrastructure. Skill development platforms. Clear paths for advancement. Access to mentorship. These are essential tools for staying competitive in a labor market where relevance moves faster than ever.
The “power distance effect”
Most engagement strategies fail because they assume all employees experience the organization the same way. They don’t. What matters more than age, gender, or even role type is how close or far someone is from decision-making power. The further away they are, the more frustration and anxiety they tend to report.
This is what’s referred to as the “power distance effect.” It’s a dynamic where access to influence and clarity correlates directly with satisfaction. Individuals closer to leadership and decision flows feel more informed, respected, and in control of their trajectory. Employees further down the hierarchy often feel left out of critical conversations, uncertain about priorities, and disconnected from company direction.
The data supports this: employees operating further from decision-making authority experience up to twice the amount of workplace angst as managers or executives.
Leaders should recognize that culture, engagement, and clarity don’t travel equally across layers. Too many companies rely on onboarding and org charts to communicate direction, ignoring the need for continuous access to influence, information, and voice for those further down the organization.
Solving this doesn’t mean forcing flat teams or promising every employee a seat in executive decisions. It means building systems where communication is two-way, context is available, and feedback loops are consistent, especially for those least connected to power centers. When clarity and autonomy increase, anxiety decreases.
Economic volatility limits the ability of organizations to provide stability
The pressure for stability is high, but as leaders know, the ability to guarantee it is limited. In 2025, market uncertainty, cost-cutting cycles, global unrest, and automation-driven change are reducing how much financial and operational predictability companies can offer.
And yet, employees continue to rank stability as a top priority. According to research from Fractional Insights, 63% say it is extremely important to them. The need is clear. But meeting it is complicated. For executives, this creates tension between what employees want and what current business conditions allow.
Ann Kuss, CEO at Outsource Your Team, puts this into perspective: “The stability part is the hardest to provide… companies having to cut cost in the next few quarters… impacts how much they want to hire, where they want to hire, what they’re willing to invest in talent.” Even in tech, a typically resilient sector, the weight of this challenge is evident.
This challenge is about managing expectation and increasing transparency. Employees don’t demand permanence. They want predictability, trust, and visibility into what happens when change occurs. They want to know how decisions are made and whether their roles are viewed as strategic or expendable.
For leadership, that means investing in honest conversations. Don’t overpromise. Detail risk exposure. Communicate strategy clearly and often. And where long-term guarantees can’t be given, compensate with clarity, better support tools, and consistent policy frameworks. Stability doesn’t always come from the environment, it often comes from how leadership navigates it.
Distinct employee psychological profiles are emerging
Most organizations still operate as though the workforce is a single unit that responds to uniform policies and messaging. That no longer works. The data shows that employees cluster around three distinct psychological profiles, each with different expectations, motivations, and definitions of a good workplace experience.
According to Fractional Insights, 35% of workers are “Universalists.” They expect their jobs to fulfill all three core needs: security, significance, and growth. These employees look for companies that invest in their full development and provide long-term alignment. Another 10.5% are “Stewards.” They prioritize security and purpose, but are self-directed when it comes to learning and development. They want stability and meaningful contribution, but prefer to manage their own growth.
The largest group, (54.5%) are “Transactionalists.” These employees are focused on fair compensation and job reliability. They don’t expect work to deliver identity or personal transformation. They want clarity, structure, and competitive pay for honest, well-defined work.
The mistake most employers make is designing systems based on only one of these profiles. They build engagement models around high-ambition growth seekers while ignoring those whose motivations are grounded in straightforward exchange or personal mission.
Executives need to build people systems that are flexible by design. This is about structuring your leadership, communication, and reward systems to ensure that each type of worker can succeed without feeling like they’re outside the dominant framework. Retention improves when employees don’t feel pressure to conform to workplace cultures that ignore their own drivers.
Future trends necessitate greater investments in empathy, leadership, and emotional connection
The next frontier of leadership is emotional precision. As AI takes on more of the repetitive and technical tasks, demand for human skill sets, empathy, adaptability, active listening, increases. These are critical skills tied to engagement, retention, and productivity.
Right now, 44% of employees show signs of measurable disengagement and stress, what researchers are now calling the “Angst Index.” That’s not just a red flag, it’s a performance and risk signal. When stress is high and trust in leadership is low, output drops and attrition climbs. You will lose velocity.
Jen Paterno, Senior Behavioral Scientist at CoachHub, makes it clear: “As AI handles more technical and repetitive work, the demand for human skills like empathy, adaptability, and coaching will rise.” She also emphasizes that coaching, once seen as optional, will become a standard leadership tool to foster connection and cohesion.
Executives can’t rely solely on system upgrades or tech rollouts to future-proof their organizations. You have to build people infrastructure. That means equipping leaders at every level with the tools and time to listen, respond, and support. Psychological safety, honest communication, and coaching must be embedded.
A company’s ability to adapt isn’t just about its tools. It’s about how well its leaders understand their people. That’s now a defining capability. If you scale it, your teams move faster with stronger alignment. If you don’t, your culture weakens just as pressure increases.
Recap
Stability, loyalty, and engagement are no longer guaranteed by tenure, title, or compensation alone. In 2025, employees are guided by sharper expectations, security that’s tangible, purpose that’s visible, and growth that’s real. If those needs aren’t met, they’ll leave. Sometimes quietly. Sometimes all at once.
As a decision-maker, your edge doesn’t come from reacting faster. It comes from designing systems that make people want to stay, even when options are everywhere. That starts with understanding psychological drivers, respecting generational shifts, and making clarity a core leadership function.
AI, economic shifts, and organizational change will keep moving. But the companies that will outperform are those that build environments where human contribution is valued without question. Where trust built and reinforced daily.
