Although 43% of employers responding to a survey said they support workers’ career paths, few said they offer interesting and challenging work.

Career development opportunities can highly influence both employee engagement and retention — and more employers are taking notice, according to a Sept. 5 report from Gallagher.

In a survey, about 43% of employers said they support career development to improve engagement, and 35% said they increased the importance of career well-being in 2024.

“Hiring and retaining talent is one thing, but driving better organizational outcomes requires effective engagement solutions,” William Ziebell, CEO of Gallagher’s benefits and HR consulting division, said in a statement. “If employees are given more opportunities to develop and advance their knowledge and skills from their employer, they’re more likely to gain a sense of purpose in their work, leading to increased motivation, engagement and buy-in.”

In a survey of 3,500 U.S. organizations across 22 industries, 57% said they have a formal strategy for improving employee engagement, marking an increase of 9 points since 2022. Career development, growth and mobility continue to top the list of key drivers of engagement and retention, they said.

Although 43% said they support their workers in developing and pursuing a career path, only 19% said they strive to offer interesting and challenging work, according to the survey. To boost engagement, companies can consider ways to challenge their employees with new goals, increased responsibility and promotions, Gallagher said.

Other reports have similarly indicated the importance of development, especially regarding employee engagement. For example, businesses may need to invest in employee development and adopt cross-functional career pathways to adapt to a “post-industrial economy,” according to a report from The Josh Bersin Co, a human capital advisory firm. A focus on reskilling and retaining workers will ultimately fuel productivity and growth, the firm said.

Unfortunately, most leaders tend to overestimate employee engagement and believe their workers are more loyal than they actually are, according to a report from Right Management, a talent brand under ManpowerGroup. However, investing in employee development can improve engagement and retention, particularly among mid-career and middle-layer workers who feel less engaged and need additional support from leaders right now, the report found.

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