The entire covenant between employee-employer has changed permanently.
I’ve heard a number of leaders predict a power shift as a result of the current economic downturn we’re witnessing today. Leaders holding on to the idea that a recession will return things to “normal” should reconsider. The standard response to a recession is that you cut costs and expect workers to stay in their current positions because they’re too afraid of moving onto something different. To that, I say not so fast.
Anticipating that workers will stay in their current positions for a longer period of time just because of economic uncertainty may have been an accurate approach a few years ago, but it is not necessarily the right approach today. Unlike past economic downturns, workers have a plethora of opportunities outside the traditional 9 to 5. Workers can gig their way through the recession or generate passive income on social media platforms like YouTube and TikTok. As a result of these options, we can’t rely on an economic downturn or recession to get people back into the workforce or make people stay in their current positions.
Leaders need to recalibrate. It is now vital to offer welcoming environments and acknowledge that both hybrid and in-person employees make contributions to a company that are equally impactful and valuable. Recognition matters, especially in today’s economy. It’s time to embrace the age of the “human workplace.”
Workhuman’s August Human Workplace Index found that one in three U.S. workers wouldn’t sacrifice anything to keep their job during an economic downturn. They’ve had a taste of what life can be like with more flexibility, and greater benefits, and they’ve proven to be just as productive and efficient with such flexibility.
If employers retrieve any of the power they had prior to the pandemic, it will manifest much differently. Especially for companies in competitive sectors, like tech, where they’re still at risk of having top talent poached by competitors or organizations that can offer them a more personalized life-work setup. Workers are going to continue placing a high value on culture, flexible work, benefits and support, and acknowledgement for the work that they do, and I urge HR and business leaders not to lose sight of the importance of these benefits to attract and retain talent.
Another driving factor of power stability is the fact that we now have a new generation entering the workforce. Much of this generation is convinced they don’t have to go the traditional route, and might especially be deterred from entering the workforce in the event of a recession. We’re in the age of the Human Workplace, an era driven by Gen Z and millennials’ expectation that if they are not recognized and appreciated for their work, they will happily move onto another company.
Making essential shifts
If employers hold on to old ways of doing things, they’re going to have a hard time holding on to talent. Business leaders should not see the recession as an immediate insulator. According to the same Workhuman report, 68.4% of U.S workers think a recession will be the root cause of employers changing existing workplace benefits. It’s clear how important existing benefits are to today’s workers, and with such a high percentage of workers concerned about being stripped of these benefits, employers should not underestimate the action this could cause workers to take.
Now, I understand there is a time for contingency planning, and the need for some leaders in impacted sectors to tighten the belt, but benefits such as flexible work and showing appreciation comes at little to no cost to you. There’s always a balance to be found in terms of where you contain costs and sustain growth, but make sure you’re not doing away with the aspects of your organization that make it possible to hold onto your employees.
For the past two years, many workers have powered through unprecedented times and remained committed to their company’s success. They’ve completely shifted their mindset around what work means to them and what they need in order to be fulfilled in the workplace. Don’t make the mistake of interrupting the lives they’ve rebuilt just to gain back a level of control.
Reimagining the employer-employee relationship
As this relationship evolves, so will the entire workplace dynamic. Instead of fighting it, we need to embrace it. The pandemic proved that people can maintain high levels of productivity while working remotely. It’s no longer fair to question the value or effectiveness of an employee’s contributions just because they’re not making those contributions from your office.
It’s time to reimagine workplace relationships, reminding ourselves that people are human beings who have life aspirations beyond work. It means creating a “human workplace,” which is fueled by the qualities that make us most human: social connection, diversity, individual empowerment, community, belonging, and a sense of meaning.
The “human workplace” promises to build resilient, high-performing teams that thrive in the hybrid world. But it requires one last shift in mindset. Employers need to focus less on getting the best out of their employees and instead on enabling and inspiring them to give their best.
Steve Pemberton is the CHRO of Workhuman.