Employee experience
still matters: Talent
retention at GCCs
With five focused actions, global capability centers could cut their
attrition rates in half.
by Indraneel Banerjee, Avinash Chandra Das, Jatin Pant, and Shikha Sharma
October 2023
Global capability centers (GCCs)1 face an enduring
and worrisome challenge: how to keep good talent
from walking out the door. In our conversations
with GCCs, executives report that attrition rates
are high. The combination of departures and the
current volatility in the talent market have disrupted
and destabilized company culture; increased
recruitment costs; and resulted in lost institutional
knowledge, additional time spent on training new
employees, and lower productivity and work quality.
While some of the worker retention pressures
are abating in the current economic climate, the
underlying issues persist. Forward-thinking
businesses now have a golden opportunity to
address them.
Most leaders understand the importance of solving
the retention issue. The problem is that they tend to
have a limited understanding of what their employees
actually value. And they too often opt for quick fixes
rather than addressing the underlying issues. This
approach leads to reliance on a set of blunt tools,
such as increasing compensation and benefits or
providing basic work-from-home flexibility, with
predictably little change in retention rates.
There is a better way. Our research has been clear
that the best way to resolve the issue is by improving
employee experience (EX),2 which strengthens
employee loyalty and, as a result, resilience and
continuity. 3 Executives should treat EX as seriously
as CX (customer experience) by being more
scientific and more tailored in their approach.
Our research and analysis reveal that while
compen­sation and benefits are important, they
have essentially become table stakes. Top talent
are looking for additional benefits, such as a
positive and supportive culture and the flexibility
to stay in the current organization or look for a new
job. By taking five focused actions, companies can
1
not only keep their people but also help them to be
more productive.
Five actions to improve EX
To understand what employees want from their
organizations, we researched the EX practices of
organizations around the world. 4 These insights
highlighted five actions that executives could take
to create a work environment that better supports
employees.
1. Use personas and journeys to customize EX
Our analysis defined nine primary employee jour­
neys and found that six have an outsize influence on
whether employees join or stay in an organization
(Exhibit 1). Four of these journeys—role change,
feedback and coaching, performance review, and
training and skill building—can have a particularly
detrimental effect when poorly executed. For
instance, our survey found that employee satisfac­
tion with these four “broken journeys” drops with
increased tenure, with women experiencing the
sharpest decrease.
A one-size-fits-all approach to EX won’t be effective.
Instead, companies should create employee per­
sonas and then tailor solutions along selected
dimensions to ensure offerings are hitting the
mark. For example, because a global bank’s GCC
identified “support on major life events” as a journey
that mattered to most employees, it redesigned its
employee-benefit policies and programs to include
reimbursement for home office setup and wellbeing support.
2. Reimagine the role of manager to emphasize
coaching and mentorship
When the workforce was going into the office on
a regular basis, managers typically spent most
of their time monitoring employee performance
and handling administrative tasks. At a global
These large facilities concentrate workers and infrastructure that handle operations (for example, back-office functions, corporate businesssupport functions, contact centers, and middle office) and IT support (such as app development and maintenance, remote IT infrastructure,
help desks, and research and analytics) to sustain productivity growth.
2
Employee experience is the full set of interactions and cultural touchpoints in an organization that have an impact on a worker’s satisfaction
levels. Metrics to gauge EX include how strongly workers would recommend their company to friends and family.
3
Jonathan Emmett, Asmus Komm, Stefan Moritz, and Friederike Schultz, “This time it’s personal: Shaping the ‘new possible’ through employee
experience,” McKinsey, September 30, 2021.
4
We conducted a survey of more than 7,000 respondents from 72 global capability centers that collectively employ more than 300,000 people.
We augmented this research with interviews of about 25 GCC leaders and findings from more than 20 focus groups with GCC employees.
2
Employee experience still matters: Talent retention at GCCs
Exhibit 1
Employees see six out of nine journeys as critical to their experience. Of these,
four journeys have relatively lower satisfaction.
Average importance of and satisfaction with journeys in employee organization
Importance of journey1
Satisfaction of journey1
0
1
2
3
4
5
6
7
8
9
10
Day-to-day work performance
Feeling supported on major life
events
Change in role
Regular feedback and coaching
Formal performance review
Training and skill building
Joining and onboarding
Exit process
Job application process
1
Average scores; scores were out of 10.
Source: McKinsey Global Capability Center Employee Experience Survey 2022
McKinsey & Company
insurance GCC, for example, one manager spent
20 percent of their time managing transport and
attendance-related issues. In an era of hybrid work,
managers need to be prepared to provide one-onone coaching and feedback to employees—both in
person and virtually.
This insight was reflected in our analysis, which found
that when a manager shows care for workers, EX
improves. While this result might not be surprising,
companies tend to undervalue its impact and fail
to adjust what they want their managers to do.
Companies instead need to fundamentally reshape
the role (Exhibit 2).5
5
To address the evolving needs of the workforce, man­
agers must be prepared to play four primary roles:
— Problem solver. Provide support on highcomplexity operational and administrative
activities (such as aiding internal processes and
escalating customer issues).
— Coach. Offer direction to help employees build
capabilities and functional expertise.
— Counselor. Understand employee career
aspirations, care for physical and mental wellbeing, and act as a trusted adviser.
“Stop wasting your most precious resource: Middle managers,” McKinsey, March 10, 2023.
Employee experience still matters: Talent retention at GCCs
3
Exhibit 2
Given that there is more autonomy in hybrid working, employees say the
manager’s role should include more coaching and mentorship.
Change in where managers should focus,1 % of respondents
Administration and meetings
Monitoring and internal solutions
Team activities
Escalation handling
Reporting
Coaching and mentorship
Improvement (of self and process)
3
8
2
13
11
14
17×
52
more coaching
29
10
1
33
14
Now
6
3
Preferred
1
7×
less monitoring,
admin, and
meetings
Note: Figures may not sum to 100%, because of rounding.
Questions: How do managers allocate their time? How should this change?
Source: McKinsey Global Capability Center Employee Experience Survey 2022
McKinsey & Company
— Cultural ambassador. Promote employee
connectivity in a hybrid work environment and
model desired behavior and values, such as
being accessible to employees and engaging in
proactive communication.
This shift will require companies to invest in additional
training and design new incentives. Training pro­
grams can help managers focus on developing new
essential skills (such as remote coaching, mentoring,
fostering interpersonal relationships, building trust,
helping manage stress, and promoting well-being)
and using new technologies. Providing mentors
from different departments and giving managers
4
Employee experience still matters: Talent retention at GCCs
dedicated time for building these skills can help them
master their new roles.
3. Find new ways to embed culture and values for
a hybrid work environment
A positive, supportive culture, characterized by
inclusion and respect, is strongly connected to the
overall well-being and experience of employees
(Exhibit 3). Often, these attributes can have a signif­
icant influence on an employee’s connection to the
organization’s purpose and brand. This pattern is
especially true for female employees: as women
move up the corporate ladder, their well-being
unfortunately tends to fall significantly.
Exhibit 3
Well-being is affected by multiple factors (such as tenure, location, and
societal support) and can differ depending on gender and family cohorts.
% of respondents reporting satisfaction with their well-being1
Positive perception of employee well-being, % of
respondents
Overall
Female
Male
Well-being of employees, by proximity to office city,
% of respondents
37%
Livinginin
Living
officecity
city
office
Living in
Living
in
hometown
hometown
or anotheror
another
town town
35
43
Difference in well-being between office
city and hometown or another town
Employee well-being, by role, % of respondents
41
Frontline
contributor
41
28
First-line
manager
37
Well-being of employees with and without dependents,
% of respondents
Series 1
41
No
dependents
Series 2
New series 1
Series 2
New series 1
33
Series 1
36
With
dependents
39
Difference in well-being between
without and with dependents
25
Leadership
+8 p.p.2
–5 p.p.2 +6 p.p.2
34
Difference in well-being between
frontline contributor and leadership
–16 p.p.2 –7 p.p.2
Question: How likely are you to recommend joining your current organization to your friends and family?
Percentage points.
Source: McKinsey Global Capability Center Employee Experience Survey 2022
1
2
McKinsey & Company
The lack of in-person interaction means companies
must devise new ways to communicate, promote,
and live their culture and values.6 Useful approaches
include recognition programs, virtual teambuilding activities, and a handbook that outlines
the organization’s mission, vision, and culture.
6
Companies will also have to invest in tech capabilities
to find new ways to engage remote employees
effectively. At a GCC for one global bank, senior
leadership became cultural role models and also
trained “cultural champions and ambassadors” to
help promote best practices on new ways of working.
Bryan Hancock and Bill Schaninger, “Workplace rituals: Recapturing the power of what we’ve lost,” McKinsey, January 25, 2023.
Employee experience still matters: Talent retention at GCCs
5
Exhibit 4
Employees want convenience, with more than 70 percent looking for a work
commute of less than 30 minutes.
Preferred commute to work,1 % of respondents
Office city travel
(< 30 minutes)
Series 1
24
18
11
Note: Figures do not sum to 100%, because of rounding.
Question: Where would you prefer to work, considering the office location?
Source: McKinsey Global Capability Center Employee Experience Survey 2022
McKinsey & Company
Series 1
Series 2
New series 1
4. Redesign the office for collaboration and
connection
Employees are looking for flexibility in where they
work. Our survey found that more than 90 percent
favor a hybrid model, with an average of one and
a half days a week in the office. Three-quarters
of employees report that working from home is a
very important factor in staying with their current
organization. More than 70 percent of employees
want their work commute to be less than 30
minutes (Exhibit 4). Therefore, it’s crucial for
companies to design and implement an effective
hybrid working model.7
Workers increasingly see the office as a space for
collaboration and connection. This sentiment hints
at the office of the future: smaller offices with flexible
workspaces and at least 50 percent of the area des­
ignated for multiple uses. To encourage people to
come into the office, companies should also explore
having satellite offices in select locations near
employees to enable smaller gatherings, with the
main office used for development, collaboration, and
hosting social activities.
7
8
6
Office city
Office city travel travel (> 60
minutes)
(30–60 minutes)
New series 1
48
1
Different city or
remote working
At one global bank’s GCC, leaders have undertaken
a radical redesign of its office. So far, the new
approach has reduced the amount of space allocated
to doing traditional work by more than half while
adding communal areas for activities such as training,
coaching, games, and events. This fit-for-purpose
office not only addressed new employee needs more
effectively but is also expected to reduce the overall
footprint by 40 percent.
5. Rethink the traditional workday
Work–life balance became a priority during the
pandemic, especially among Gen Z employees and
working parents. Having the flexibility to attend to
personal and family obligations and still work a full
day appeals to a wide swath of the workforce. 8
A global bank’s shared-service center responded
to this need by enabling increased flexibility around
scheduling (such as giving employees the option to
swap shifts with coworkers and split shifts) to align
with persona-based preferences and life events.
One employee remarked on the changes as follows:
“I love being able to spend more time with my kids at
The State of Organizations 2023: Ten shifts transforming organizations, McKinsey, April 26, 2023.
People & Organization Blog, “Returning to the office can be a choice, not a challenge,” blog entry by Phil Kirschner, Natasha Ouslis, and Julia
Sperling-Magro, McKinsey, July 11, 2022.
Employee experience still matters: Talent retention at GCCs
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Exhibit 5
For greater work–life balance, employees are looking for flexibility related to
when they work.
Preferred days and hours within a 40-hour work
week, % of respondents
Preferred shift and days, % of respondents
15
Scan • Download • Personalize
45
53
5 days for 8 hours
4 days for 10 hours
Series
1
Series
Flexible
shift, 2
flexible days
Series 3
18
Same shift,
flexible days
19
Split shift (two 4-hour
blocks), same days
48
Retain existing shift
Note: Figures may not sum to 100%, because of rounding.
Source: McKinsey Global Capability Center Employee Experience Survey 2022
McKinsey & Company
home, and I don’t need to sacrifice my performance
at work.” These adjustments have decreased
monthly attrition by 80 percent.
Companies have several options at their disposal,
including allowing tech workers to adopt flexible
day shifts (such as split days or flexible work hours).
For example, half of employees would be open to
working longer hours over fewer days (Exhibit 5). One
survey respondent remarked, “I hope the four [days a
week] for ten [hours a day] schedule is open so I can
spend more time with family.” This approach requires
companies to adapt their approach to hiring and
staffing to ensure sufficient levels of coverage.
Because EX is fundamentally personal,
organizations need to become more adept at
listening to ensure they are addressing employee
priorities. By gaining a better understanding of what
employees value and reimagining every element
of work—from roles, to the office, to scheduling—
GCCs can position themselves as an employer of
choice for years to come.
Indraneel Banerjee is a partner in McKinsey’s Bengaluru office, where Avinash Chandra Das is an associate partner;
Jatin Pant is a senior partner in the Singapore office; and Shikha Sharma is a knowledge expert in the Gurugram office.
The authors wish to thank Harshitha Mudraboiena for her contributions to this article.
Copyright © 2023 McKinsey & Company. All rights reserved.
Employee experience still matters: Talent retention at GCCs
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