A new report from The Predictive Index (PI), based on Dynata’s 2025 Workplace Perception Gap Survey, uncovers a critical challenge: employees don’t feel seen or understood by their leaders. This disconnect—affecting nearly half of the workforce—is damaging more than morale. It’s threatening business outcomes like retention, performance, and innovation.
As burnout grabs headlines, a deeper, more subtle crisis is emerging: perception gaps between employees and leadership. According to Matt Poepsel, PI’s Vice President and “Godfather of Talent Optimization,” this issue goes beyond feelings—it’s a measurable business risk.
Survey Insights on the Perception Gap
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46% of employees say their boss only somewhat or rarely understands their contributions.
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48% feel consistently undervalued by leadership.
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44% report being overlooked for raises, promotions, or key projects due to misperceptions.
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43% receive misaligned feedback that doesn’t match their self-perception.
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18% believe they are more capable than they appear at work.
Gen Z Is Feeling It the Most
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62% of Gen Z feel overlooked due to inaccurate perceptions—18 points higher than the overall average.
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54% of Gen Z say manager feedback misrepresents who they are.
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Gen Z is increasingly disengaged—job board signups from this generation jumped 42% in one year.
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With Gen Z expected to make up 30% of the workforce by 2030, this issue is escalating fast.
The Impact on Business Performance
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Perception gaps erode trust and engagement.
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Undervalued or misunderstood employees are more likely to:
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Quiet quit or disengage.
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Seek outside opportunities.
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Deliver lower levels of innovation and productivity.
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Retention risks grow especially in critical talent segments like early-career professionals.
Solutions: How to Close the Workplace Perception Gap
The data offers a clear roadmap for HR and leadership teams:
1. Prioritize Leadership Development
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44% of employees say better leadership training would improve understanding.
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Effective managers must learn to read behavioral cues and work styles—not just performance metrics.
2. Increase Meaningful Feedback
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45% want more frequent and personalized feedback.
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Feedback must be timely, aligned with strengths, and rooted in real observations—not assumptions.
3. Use Behavioral Assessments
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80% of Gen Z support behavioral assessments to better understand their and their teammates’ strengths.
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Behavioral data:
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Offers objective insights into work styles and preferences.
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Helps managers coach effectively based on individual needs.
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Encourages team collaboration through mutual understanding.
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Why This Matters for the Future of Work
As organizations race to retain top talent and navigate generational shifts, understanding employee perceptions is not optional—it’s strategic. Misunderstandings aren’t just internal HR issues; they limit productivity, stifle potential, and increase turnover costs.
Behavioral assessments and leadership development programs are no longer “nice to have.” They are critical tools to close perception gaps and unlock the full potential of diverse teams.
In a world where workplace experience directly impacts performance, businesses can’t afford for their people to feel unseen. The perception gap, especially among Gen Z, is a growing risk—but it’s also an opportunity. By using behavioral data, enhancing feedback, and training leaders to better understand their teams, organizations can drive loyalty, boost innovation, and retain their best talent.
