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Positive Employee Relations
The year 2021 was called The Great Resignation, with approximately 47.4 million people voluntarily quitting their jobs, per the U.S. Bureau of Labor Statistics. Americans are quitting their jobs at record rates, and the trend shows no signs of letting up. For example, BLS statistics report 3.4 million people quit their jobs in December 2020 compared to 4.3 million in December 2021. The industries experiencing the highest quit rates in December 2021 were retail trade, professional and business services, education and health services, and leisure and hospitality.
At the same time, there are 10.9 million job openings. What do these numbers signify for business continuity and union-free by becoming an employer of choice? It's all about employee engagement; the path to high engagement has shifted as millennials and Gen Z change employee-employer relationship principles.
Employee expectations about work have changed during the pandemic, the underlying reason there are massive numbers of voluntary quits across industries. The voluntary quits are impacting more than just recruitment and retention policies. They are leading to a renegotiation of the meaning and purpose of work itself and the relationship between employees and employers. Standard business practices in Human Resources and talent management need to adapt to the new reality in the Resignation Nation to remain an employer of choice and to thrive as a company going forward.
There is general agreement the COVID-19 pandemic prompted a rewrite of the employment contract between workers and employers. It's not only the written legal contract stating the role, responsibilities, and terms of employment under scrutiny. There is also a psychological contract between an employee and employer that is not formally written but exists as a set of unwritten expectations about the employment relationship.
The legal employment contract and the psychological contract are integrated, but the psychological contract took center stage during the pandemic. The most basic expectation is that the employer's communication about things like work schedules, pay increases, and health and safety are not false promises. When the psychological contract is breached or perceived as breached, employee engagement and productivity are harmed.
There is a deep psychological aspect to work. People want to feel good about going to work and have a sense of belonging and contribution once there. Post-pandemic, people aren't willing to continue business as usual. They feel empowered to look for work that brings satisfaction and better utilizes their skills and capabilities. Those who stay and experience a broken psychological contract are most likely to participate in a work stoppage or initiate a union organizing campaign.
What do employees want? The younger generations have made it clear they specifically like remote work and schedule flexibility, as long as they get the work done. For service workers who can't work remotely or on flex schedules, they want employers to keep promises about protecting their health and safety and pay increases. Employees don't want to be micro-managed, and they want to work for employers who care about the well-being of employees and their families and society in general.
One of the consequences of the new employee perspective on work is that job candidates are looking for something different in work than they have in the past. Many workers are walking off the job because they believe they can find more interesting work, work that better utilizes their skills, has accommodating work schedules, higher pay, and a minimum amount of remote work. Many employees are experiencing burnout, an epidemic in itself, and a tight labor market leads them to look for new jobs. For some employees, the pandemic made them realize they want more in the way of career development with interesting and fulfilling work.
What are the implications for employers trying to compete in a highly competitive labor market? The change in employment and psychological contract expectations means that recruiting and retention practices must adapt. For example, career progression or career development opportunities need to speed up for high potential job candidates. Employers need to offer remote work, flexible work schedules, fair pay, benefits that support families, and proof that the company sincerely cares about people and their communities.
It's important, though, to understand that this is about more than just adjusting work schedules or paying higher wages. High-paid employees are walking off their jobs, along with the lower-paid workers. People want a new psychological contract that recognizes work should offer more than pay and benefits. Work should also deliver purpose and meaning as employees carry out their responsibilities. This is the greatest leadership challenge of the employee-employer relationship going forward. Employers are discovering that post-pandemic people in the job market and current employees came to believe that the concept of the social enterprise was not working as it should, and they want change.
Deloitte addressed the social enterprise and found in its research that workers questioned whether employers were doing enough as a social enterprise and believed employers were concentrating more on the company's agenda. This is a major perspective shift. In the Deloitte 2021 Millennial and Gen Z Survey, only 47 percent of millennials believed businesses positively impacted society. Add up the employee's desire to find purpose and meaning in work, a desire to be treated like a productive adult who has autonomy over their work, and a desire to work for a sincere social enterprise, and employers know how to outsmart The Great Resignation.
Deloitte writes in its 2021 Global Human Capital Trends: Special report, "The worker-employer relationship is REACTIVE: Employers feel compelled to respond in the moment to workers' expressed preferences, and to competitor moves, without connecting those actions to a sustainable workforce strategy." Being reactive is a zero-sum strategy because it deals with one issue among many and isn't forward-thinking.
Deloitte proposed four possible scenarios that could develop going forward, and that was one of them – employers are reactive. It's what is occurring now as a result of the pandemic. Two more suggested scenarios are the job market is no longer tight, the worker-employer relationship remains impersonal, or the relationship is strictly professional, and purpose and meaning are found mostly outside work. It's not likely either of these scenarios would materialize anytime soon, given the perspectives of millennials and Gen Z about work.
Becoming an employer of choice is more likely to depend on the fourth scenario in which the worker-employer relationship is communal and based on a shared purpose. Employers are proactive in developing a workforce strategy for recruitment and retention that is built on a shared purpose and incorporates the needs of the younger workforce. The organization has values that drive decision-making and guide efforts to manage workers around common and meaningful goals.
Purpose becomes embedded in everything your organization does, especially in the talent arena. Recruitment and hiring practices, job descriptions, decision-making, employee engagement, leadership training, and performance metrics, to name a few areas. Interestingly, Deloitte discusses the fact that the way purpose is communicated to potential or current employees matters. This harkens back to the psychological contract. Overstate your purpose, and it may seem insincere. Labor unions frequently hone in on employer promises not kept to prove employer insincerity and lack of concern for people.
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Employers can take a proactive approach to develop employee-employer relationships by gaining an understanding of the employee perspective. Employees want to be treated like adults. The trend towards the 4-day workweek is a good example. Andrew Barnes started the non-profit 4 Day Week Global platform, which supports the 4-day work week as the future of work. What is important about the new concept is that it's not just a matter of shortening the workweek or expecting less work productivity—quite the opposite.
Barnes started the platform after implementing a trial 100-80-100 work schedule in 2018 at his company Perpetual Guardian. He explains in the Projections podcast that people are paid 100 percent of their pay for working 80 percent of their regular schedule while maintaining 100 percent of their productivity experienced during a 5-day workweek. Employee engagement rose 40 percent, stress levels dropped, and productivity increased by 25 percent. The 4-day workweek enabled more work-life balance. Employees now have a choice of work schedules because the company wants people to select the schedule that fits their life.
Treating employees like adults means trusting them to get the work done and done well while not working a traditional 9-to-5 schedule. Some companies that have adopted the 4-day workweek include Panasonic, Elephant Ventures, and Bolt. The idea is that people work more productively, eliminating much of the wasted time that takes up the equivalent of a whole day of work in most organizations, and are more energized after a 3-day weekend. The government is getting into the picture too. A bill was introduced in Congress to reduce the standard workweek hours from 40 hours to 32 hours. With such a change, overtime would be paid after 32 hours. Other countries have successfully tried the 4-day workweek, including Iceland, New Zealand, and Japan, and all have found that productivity remained stable or increased.
Remote work existed before the pandemic but not anywhere near the level it reached during the pandemic. Now, full and part-time remote work is likely here to stay. Gallup's research found that during September 2021, 45 percent of employees worked full-time from home, and 20 percent worked part-time. Two-thirds of white-collar employees worked from home, with 41 percent working exclusively and 26 percent working part-time. Of note is that Gallup respondents said:
The pandemic also led to more deskless workers. These are workers who don't have a specific work location, like the office or home. They have work assignments but no set schedule and can fit work into their life. There are 2.7 billion deskless workers globally, and they were essential workers during the pandemic – healthcare workers, grocery store employees, factory workers, etc. Providing these workers with the right level of support is critical to retaining them.
Mike Morini, CEO of WorkForce Software, recommends employers help deskless workers feel connected with regular communications by scheduling shifts effectively to reduce overtime, mitigating burnout, and supporting on-the-job learning. Successfully recruiting and retaining deskless workers will depend on providing them with the right support.
Offering things like remote work, deskless work, and flexible schedules are recruiting and retention strategies, but they must accompany more. What does it mean to work today? Many people have decided they are unwilling to work for a company that does not offer meaningful work, and they aren't willing to endure a toxic workplace culture. The pandemic lockdowns lead to people asking themselves if the work they're doing and the work-life they are leading are bringing a sense of well-being and a healthy work-life balance.
If the answer is "no," they quit. Well-being doesn't just involve the employee either. Employees have families, and they want their well-being protected also. Laszlo Bock was a human resources executive at Google but left to co-found the HR consulting firm Humu. He said the most important consideration is this: "Make humans actually feel like human beings." He went on to say, "In the pandemic, people have talked a lot about essential workers, but we actually treat them as essential jobs. We treat the workers as quite replaceable."
Some of his suggestions are simple. They include health benefits on day one, like Amazon offers, assisting with the commute or schedule to reduce the need to commute so frequently, avoiding scheduling closing and opening shifts back-to-back, and steps like that. He has also done extensive research on the ideal balance between office work and remote work. What he found was that three days at home and 1.5-2 days in the office is the best schedule.
Also included in Bock's recommendations is for leaders to prioritize the emotional support they can give. It's up to leadership to create an environment that is empowering and meaningful in which employees feel included and trusted.
Some other interesting ideas companies are using to attract and retain workers include offering benefits that enable personal as well as professional development and giving employees experiencing burnout a sabbatical. Nathan Christensen, CEO of the HR compliance company Mineral, makes five recommendations to re-engage employees.
If you work for a big company, don't be afraid to propose these and other solutions and feed the idea up the food chain, you never know what engagement you might spark! You get triple benefits, too, because all of these ideas will also help your company stay union-free and competitive in the labor market.
Walter is IRI's Director of Digital Solutions and founder of UnionProof & A Better Leader. As the creator of Union Proof Certification, Walter provides expert advice, highly effective employee communication resources and ongoing learning opportunities for Human Resources and Labor Relations professionals.