Why the balance of power is shifting from employers to individuals
Today marks the start of the Chinese New Year and Year of the Tiger. In China, the tiger is regarded as the king of all beasts and people born in its year are expected to be brave, wilful and unpredictable. As it happens, 2022 has also been tagged “Year of the Worker” – the year when forces have combined to shift the balance of power away from employers to individuals – and one in which we see the “Great Resignation” set to continue. So what might this mean for employers looking to recruit and retain talent?
In the simplest terms, employers should – as a first step – find ways to actively and effectively listen to their employees. This is key: research[1] has shown that whilst employers can correctly identify the reasons employees leave that are tied to pay and conditions, they fail to appreciate the fundamental and ‘relational’ reasons that motivate them to go.
The Covid pandemic led most of us to re-evaluate our lives, careers and priorities and this was reflected in the change that took place in professional conversations; issues of mental health and well-being - formerly the preserve of thematic workplace initiatives - came to be discussed widely and publicly by those at the very top of organisations.
And whilst individuals’ personal experiences of the pandemic were inevitably unique, there was also a collective response. Coming together to applaud NHS and front-line workers each week was an example of this. This ritual was also a counter-balance to the remote and sometimes isolated lives being led at the time. As 2020 and 2021 have worn on, the value of being connected to others in a meaningful way seems to be having an on-going impact on individuals’ approach to work and to their employers.
‘Connectivity’ in this sense is about more than physical proximity and the affinity that can come from that. It is about wider compatibility based upon values, aims and outlook. McKinsey’s report, cited below, found that employees’ reasons for leaving employment included a lack of a sense of belonging and not feeling valued by their organisations and/or managers.
These findings tie in with the prevalence of employee burn-out. Since the start of the year, this issue has repeatedly featured in the media. Last month, the FT reported[2] on junior lawyers leaving big law firms in their droves and the firms’ (somewhat predictable) responses: ‘supercharged bonuses’ principally based upon excessive hours. Yet, research suggests that this one-dimensional approach is short-term and unsustainable; all it does is signal a transactional relationship with the employee. The individual is regarded and treated as a cost-unit. This approach is plainly not conducive to building loyalty, connectivity or shared purpose. And whilst this may not have mattered to firms when they had a steady stream of junior lawyers lining up to fill vacancies, in the Year of the Worker, such an approach may well prove ineffective: a pay cheque is unlikely to be enough to hold onto, or attract, the brightest and best over the longer term.
As we approach the 2-year anniversary of the UK’s first lockdown, perhaps we should consider – against this background - lessons from the pandemic. For years, wholesale remote working was unthinkable; anything other than the one size fits all office-based model was inconceivable. Yet, in the space of a few weeks in March 2020, this model was eradicated forever. Necessity was the catalyst for change but perhaps we need to make similar imaginative leaps to explore how business can be done differently.
The new workplace dynamics give employees a potential voice and employers an opportunity to listen. Listening to the widest range of voices in order to properly understand the issues that matter to your employees – for example, fairness, social and environmental impact, well-being – represents an opportunity to revisit core purpose and to re-imagine ways of operating. An organisation with a strong central purpose and engaged employees at its core is far more likely to prove resilient in the face of record rates of attrition.
Listening to your critical stakeholders in this way helps to build a culture of trust, transparency and accountability and further, one in which purpose, performance and profit can successfully combine.
The alternative - a failure to listen, reflect and respond – may well lead to the best employees voting with their feet.
[1] ‘Great Attrition’ or ‘Great Attraction’? The Choice is Yours, McKinsey & Company, September 21