The global talent shortage already facing employers may seem to have worsened since the pandemic, as news reports of employees quitting en masse strike fear into CEOs. But is the labor market really facing a “Great Resignation” or simply a “Great Renegotiation” of the employee-employer contract?
Headlines bemoaning the Great Resignation of employees during the pandemic don’t tell the whole story. More nuanced data reveals that rather than leaving the workforce altogether, many employees are simply demanding better jobs. What does today’s workforce really want, and what opportunities does that open up for employers willing to renegotiate the employer-employee relationship?
Workplace Wellness
COVID-19 brought physical wellness concerns to the fore by making employers responsible for protecting employees’ health as never before. There’s also growing awareness of the importance of mental health in the workplace. According to Mind Share Partners, 53% of workers say their workplace negatively affects their psychological state, with three-fourths having experienced emotional wellness issues in the past year.
“Change before you have to.”
Jack Welch
Employees want to feel cared about and seek a workplace where they can be open about their personal circumstances. Thirty-nine percent of workers Microsoft surveyed say they feel more comfortable being their authentic selves at work than they did before the pandemic. Benefits tailored to individual circumstances, such as eldercare or childcare, access to financial or legal advisers, or exercise and emotional wellness programs, can help employees feel understood by employers.
Employers can take a step further by incorporating well-being practices into the actual workplace itself, such as integrating micro-breaks into the workday, designing workspaces around employee preferences, and limiting the duration and frequency of meetings. They can also, as Gartner recommends, make the chief mental health or chief wellbeing officer a C-suite role.
Flexibility in Time and Place
The pandemic proved remote work was a viable option, unleashing a hunger for greater flexibility in when and where employees do their jobs. Seventy-one percent of knowledge workers who are dissatisfied with their job’s flexibility are open to new employment, according to the World Economic Forum.
Meeting the demand for remote work, the number of LinkedIn job listings allowing employees to work from home has soared fivefold since March of 2020, a Microsoft survey discovered. Even post-pandemic, Gartner predicts almost half of employees will work remotely at least part time.
“The greatest danger in times of turbulence is not the turbulence — it is to act with yesterday’s logic.”
Peter Drucker
Employees not only want the option to work from home, but also seek flexibility in work hours. A growing number of employers, including Kickstarter, Buffer, and Unilever, have experimented with a four-day work week—something 80% of employees in a Deloitte poll said they’d choose if offered.
Lifelong Learning Opportunities
As digital transformation and automation continue to accelerate, two-thirds of employees believe they’ll need new skills to remain relevant in the coming years, Adecco Group reports. However, this same study indicates that just 3% of non-managers believe their employer is adequately investing in their career development.
Upskilling and reskilling existing workers can help businesses overcome the talent shortage, improve employee retention, and benefit the bottom line. High-performing companies are 6.7 times more likely to help their employees gain new competencies and skills, according to Deloitte. For example, these companies consistently define necessary skills and capabilities across the organization and suggest work opportunities that will help them develop those abilities.
Customized Work Experience
In recent years, organizations have embraced digitization to enhance the customer experience. Now, individuals expect the same level of choice, ease, and personalization at work that they enjoy as consumers. Savvy employers will treat employees as internal customers, allowing them to tailor their work experience to their preferences.
The employee experience should start with the job application and become increasingly personalized as employers learn more about both candidates and workers. The option to choose the hardware and software they use, the communication channels they prefer, or the types of spaces in which they work can all boost employee satisfaction.
Going Green and Going Social
COVID-19 spurred workers to re-examine their values and ask whether their jobs were meaningful enough to literally risk their lives for. Employers are discovering that environmental, social, and governance (ESG) initiatives have gone from “nice to have” to “must have.” Employees want to feel that their work has meaning and purpose and that their employer’s values align with their own.
“What’s dangerous is not to evolve.”
Jeff Bezos
A whopping 88% of employees polled believe it’s not enough for businesses to make money — they must also positively impact society. Sixty percent of workers would take a pay cut to be employed by an organization that puts people ahead of profit and creates programs and policies to help workers, the community, and the environment. Lip service is no longer enough: Employers must deliver on ESG goals with transparency and a willingness to be held accountable.
Embracing DE&I
Two-thirds of workers want their employers to give greater priority to diversity, equity, and inclusion (DE&I) and 80% want to know what their company is doing to make work more inclusive, the Porter Novelli survey found. However, North American (DE&I) initiatives tend to focus on ethnicity and gender, while European companies primarily focus on people with disabilities, a Manpower Group study found. The study recommends organizations consider how other aspects of diversity, such as age, neurodiversity, LGBTQ identity, and military experience should factor into DE&I goals and policies.
Done right, DE&I makes the workplace more appealing to employees and helps close the talent gap by expanding the candidate pool. It can even drive profitability: In organizations with greater than average workforce diversity, the proportion of revenue from innovation is 19% higher, BCG research shows.
A Defining Moment
Although the talent wars are still raging, larger organizations have a distinct edge. According to data published by the National Bureau of Economic Research, job seekers flocked to big, established companies rather than startups during the pandemic-related economic slump. Highly skilled workers were even more likely to focus their job search on large organizations.
The “Great Renegotiation” offers an opportunity for organizations to redefine their values, their brand, and their relationship with workers. The promise of stability and job security has long attracted workers to big companies — but to remain employers of choice in the coming years, large entities must now offer much more.
