The Changing Workplace and Employee Engagement
The workplace is changing, but that isn’t news. Industry is constantly evolving to absorb new technologies, address new competitive threats, and deal with a changing marketplace. While recent headlines blaming the pandemic for ushering in entirely new ways to work are probably overstated, there is no denying we are facing a tidal wave of human capital changes happening simultaneously. Organizations unprepared to deal with this shifting environment will likely fall prey to competitors able to strip them of their best workers — and ultimately their best customers.
By: Ric Neeley
The new year may offer even more challenges than the last two as industry wrestles with global supply chain issues and contends with even more variants of the virus. As the labor market tightens, employees will demand more input and greater flexibility to stay with a company. Those institutions who had shrugged off the need for retention strategies will be clamoring to launch employee engagement programs in hopes of stemming turnover and slowing resignations. But before we start looking at solutions, let’s step back and see where we are exactly and how we got here.
We’ve all seen those ominous headlines on the stress caused by working at home, the huge risks of hybrid workplaces, and more recently the great resignation epidemic infecting the workforce. But the facts may offer us some very different insights.
- Remote work has been steadily increasing for the last twenty years.
- In 2000 about 1% of US employees or 1.6 million worked remotely full-time.
- By 2019 that number had grown to around 4% or about 6 million workers.
- In 2019, the year before the pandemic outbreak, nearly one-third of US employees spent a portion of their time telecommuting from home.
- In 2014 the Pew Research Center first reported on the link between the growing number of stay-at-home parents and the rising costs of childcare.
So, the pandemic didn’t create remote work, hybrid workplaces or employees choosing to leave the workforce, at least based on a childcare cost-benefit analysis. It did, however, dramatically accelerate these changes.
- An estimated 26% of US employees will be working remotely at the end of 2021. That’s around 41 million people, nearly seven times the 2019 number of fully remote workers.
- A FlexJobs Survey reveals:
- 81% of employees would be more loyal to a company with flexible work options
- 51% stated they are more productive working remotely
- In September 2021, 4.4 million US workers quit their jobs. This represents 3% of the workforce and the highest number of quits and quit rate the US Bureau of Labor has seen since it began reporting on this figure in 2000. Yet, the employment rate fell to 4.8% that same month.
Remote work and telecommuting began climbing when laptop computers and in-home high-speed internet service became less costly and more available. Many employers resisted this trend for fear their people would simply not work at home. Stay-at-home orders put in place to mitigate the spread of COVID demonstrated that people were productive working from home. Employers learned a lesson most remote workers already knew: Remote employees tend to work through what would normally be commuting times, adding to their productivity.
Workers are quitting for better options
While the number and percentage of people quitting their jobs in 2021 has reached higher levels than we have ever seen, it probably indicates a strong jobs market and optimistic job seekers. Historically, the quit rate plummets during economic uncertainty. During the Great Recession, for example, the quit rate dropped to as a low as 1.2%. As the US economy has recovered rapidly in 2021, workers found themselves with more job options.
Industries hard hit by the virus shutdowns like leisure & hospitality and foodservice are facing quit rates over 6% today. Hotels and restaurants have been forced to raise wages and offer hiring bonuses as they compete for workers with companies who experienced dramatic growth during the pandemic. Ecommerce and delivery companies saw COVID as a boom. Their rapid expansion created a demand for drivers, grocery shoppers, and even customer service reps.
Warehouse operations and fulfillment centers are seeing growth and a renewed need for workers as well. A shortage of truck drivers has been leaving many shelves empty nationwide. But all these are just symptoms exacerbated by the pandemic of an even bigger problem — we simply do not have enough blue-collar laborers to fill demand.
A recent Labor Shortages Solutions Survey found 85% of companies in “mostly blue-collar industries” report recruiting problems compared to 64% in “mostly white-collar industries”. The massive number of baby-boomers retiring has halted growth in the working-age population — a trend expected to continue through 2030. We are also seeing a large drop in the labor force participation rate among 16 – 24 year-olds who are opting for higher education. This is probably good from a societal perspective, but it means a shortage of workers in occupations that typically hire young and less academically educated employees like trucking.
What does this labor situation mean?
Simple, right now, we have 10.44 million job openings available in the US, but we only have 7.4 million people looking for work. That’s about 1.4 jobs for every person looking. Obviously, not everyone looking for work is qualified to fill these current openings. That means the recruiting challenges are that much harder for every employer looking for help. In a labor market this tight, competitors must recruit from your ranks to get the workers they need to survive and grow. Recruiting costs will increase as will worker hourly rates and salaries. It may also require signing bonuses to add new workers. But watch out, that could mean a new wage gap between your new workers and your experienced employees, putting those people at risk of defection.
Each time an employee quits to go to work for a competitor or to start working in an entirely different industry you will short-handed, making it more and more difficult to care for your customers. Factor in a labor-shortage backdrop that could absorb more and more resources and you’re at risk of losing customers either because you can’t service them or because you no longer have time to be innovative. In this world, connecting with and retaining your existing customers is mission critical.
Remote and hybrid work models are about to become the new norm. Employees are becoming harder and harder to find. Competitors are singing siren songs to lure your workers away. If you aren’t engaging your employees, someone else will. That leaves you high and dry when one of your people takes that next job. Now is the time to get serious about engagement initiatives to create loyalty by showing employees their value and demonstrating your commitment to them.
Here’s a few pointers to help you start…
- Begin by implementing an engagement platform to communicate, highlight accomplishments, and allow employees to recognize one another.
- Make sure your platform offers tools to allow managers and team members to call out accomplishments quickly and easily.
- Look for a platform with a social tool that helps you recognize and model behaviors to other company employees. This will both amplify the recognition and demonstrate model behaviors for others to emulate.
- Educate managers on best practices and measure their effectiveness at inspiring performance.
At one time, these human capital investments were considered nice-to-haves. These were things that only top companies offered to their people. Today, investing in employee engagement tools is a defensive strategy to retain employees. They are must haves to create loyalty and reduce costly defections. Remember, employees are your greatest asset to bring innovative ideas that draw and retain customers. Creating loyal employees protects your customers and your bottom line.
Ric Neeley is a Director of Marketing for Hinda Loyalty Group, a US-based loyalty solutions provider that helps engage, inspire, and reward the people most important to your business.