By: Ron Guest, Senior Partner, TwoGreySuits
The new normal is not distant on the horizon, it is here now.
We are very clearly in an employee driven market. Employees have the power now to demand workplace flexibility in ways never seen before, and they are getting their way!
If, as an employer you haven’t experienced the significant post-covid return to work challenges, believe me, it is coming. Employers I have talked with speak of a vastly different employee relations landscape than 2 years ago. The Pandemic has forced companies to do things they previously discouraged – working from home. Pre-pandemic, this option was utilized by around 15% of employees, now it is almost 80%. (Mercers 2021 Spring Flexible Working Policies and Practices Survey) Some companies are treating pandemic required work related changes as a blip or one time anomaly in the employer-employee relationship, while others have learned from this in a way that will hinder those other companies that are seeking a near full or full return to work scenario for their staff.
Many companies are trying their best now to keep these policies of return to work simple, such as minimum 1,2,3 or 4 days/week in the office. They rightfully in some ways argue that this is required for culture building, in person collaboration and all the informal communication that occurs when human beings work in the same space. In fact there are very powerful arguments for this, some even backed up with research.
There is only one major problem with this approach – it doesn’t work! There is simply too much evidence now that suggests strongly that employees are leaving and at a record pace.
There are many reasons why, but the 2 main ones I am seeing are employee demands for flexibility as #1 and compensation as #2.
Employees have learned the value now of flexibility – less time at work or commuting and better flexibility to get all their work done while at the same time having a better balance of their work and home life. Physical moves away from the workplace have offered employees affordable housing options during the pandemic. In these cases the much longer commute by having to return to the office now is itself a good enough reason for them to leave and seek employment with more flexibility. As the demand for skilled workers increases, the compensation is also going up, simple supply and demand. When workers can attain current or better than current flexibility and even better compensation with a new employer, the data tells us they are leaving and in very large numbers.
Let me add a third factor into the mix. Research over the years has completely supported the number 1 reason (by a wide margin) for employees leaving an employer was the quality of the relationship with their direct manager. So, post pandemic there are really 3 monumental factors why an employee will leave. If an employer is short on any 1 of these 3, then get ready to start recruiting for the staff who just left.
If we know all this because we are seeing it play out in the workplace what can we do about it, to be on the right side of this equation?
Looking at flexibility first; a one size fits all return to work policy approach will not work. Why?, because employees are all different with different circumstances, needs, wants, etc. Flexibility should be decided on a person by person and a role by role basis. Work that was done during the pandemic fully remotely at a satisfactory level must be considered for full remote opportunity. – in my view. In situations where certain jobs are seasonally busy, why not adopt an approach that says the person works in office full time but during the non peak times can be remote? And letting the employee decide this is key. Even jobs like HR or IT should be considered for remote work, again driven by employee needs and wants. For times when an employer asks for all employee attendance, such as major announcements or town halls or year end results, etc., the employer has to think hard about the implications of requiring all employees to be in the office at once. The main point in all of this is to be less concerned about treating everyone equally and more concerned about listening to employee needs on a one to one basis and acting accordingly.
Employers have various ways to determine how they think their staff compensation is competitive. Some simply use the fact they are able to hire key staff with their current offerings. Good, but this also does not mean they will stay. Others embark on competitive compensation surveys, (good) others look on-line (not recommended) and still others seem to think a certain level of turnover means the compensation must be competitive. (usually not true) All this to say, the compensation landscape is changing at a pace never seen before and I have seen it personally now several times with different situations. We also must remember that no matter what we say as employers, employees will talk about compensation, so if you are making changes to compensation based on compensation surveys as an example, be sure to look at your existing staff first. Additionally, I would recommend using a professional compensation consultant. (I can recommend) Probably the worst thing you can do here is – doing nothing, as the costs of unwanted turnover outweigh any compensation changes in my experience.
RELATIONSHIP WITH DIRECT MANAGER
As mentioned, pre-pandemic the number one reason by far of why people leave an organization is because of the relationship they have with their direct manager. It isn’t aways known who the problem managers are, this is often well hidden because people don’t want to speak up for fear of retribution and in small offices or companies, saying anything at all may in fact backfire on the employee. In many cases though, this is known but the management team or owner does not know how to deal with it , so it goes unchecked.
There is however one person who knows who these managers are – the person that reports to them. My point here is – as an employer you may not ever know that the reason for a resignation is because of the relationship with the direct manager. Employees often need this person for future references and want to leave on good terms. In my view there IS a way to know who these managers are that are causing people to leave. It is in knowing how well they know their direct reports. You can find this out in a simple conversation by asking a Manager. Managers will typically say they know their direct report’s spouse’s name or their children’s names of their favourite sports team or what kind of car they drive or where they go on vacations, what foods they like, etc. They may recite their work strengths and weaknesses too.
RED FLAG – this is not what we mean by really knowing your staff. Other than the decisions individuals make on their own about liking work, a Manager’s people management skills are the most powerful factor in employee motivation, morale and ultimately their own decision to stay or leave. Good managers really know their staff – especially their goals, their stressors, what excites/drives them, how they define success, what is truly meaningful to them, what their dreams are, their fears, motivators, and what activities build or drain their energy. Effective managers know their staff’s perspectives and their hopes and dreams and they present them with challenges that lead them in the direction they want to be moving anyways.
Motivated staff is a key piece of company culture and we can start by knowing the skill sets of the managers in this regard.
In summary, there are specific things you can do to attract and retain staff and I have mentioned 3 key ones here. Again, doing nothing here is inviting inevitable problems.
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