Management Essentials For Businesses In An Unpredictable Economy
Why Managing Employees Post-Pandemic is Changing
The COVID-19 pandemic drove significant disruptions in the workplace. First, there was a major shift toward remote and flexible work. Many companies introduced initiatives for remote workers that enhanced wellbeing, such as supportive counseling, enhanced health programs, training and development programs. Meanwhile, employees were saving on commuting, child care and pet sitting costs, while enjoying schedule flexibility.
After business returned to somewhat normal operations in 2022, a study by ADP Research Institute found 64% of workers said they’d rather quit than go back to the office. Now, with growing concerns over an impending recession and a shaky labor force, company leaders are challenged with cutting costs while maintaining productivity with fewer workers.
Understanding the “Why” of Employee Angst
It is important to acknowledge that employee dissatisfaction began well before the pandemic, or the “Big Resignation” of 2021. Even though quitting dropped off sharply in 2020 when businesses were shuttered causing a jobs shortage, data from the US Bureau of Labor Statistics show an upward trend in quitting started in 2009. Note that the data represents non-farm labor, but the statistics are even more dire in that arena. Most young people in the US don’t want to go into farming due to a perception it is not profitable, or for those that do, they are not able to acquire affordable land to farm.
So why is there so much worker dissatisfaction? Surveys by Pew Research show, “low pay (63%), no opportunities for advancement (63%), and feeling disrespected at work (57%)” as the top three reasons people are leaving their non-farm jobs today. It follows that younger to mid-career adults are quitting at a much greater pace than older adults are making higher wages.
ADP’s research also revealed some new employee expectations for employers. In addition to remote options and schedule flexibility, pay equity is important to those surveyed. If a company has pay discrepancies between genders or no diversity and inclusion policy, 76% would look for work elsewhere.
Disconnect Between Employers and Employees
While telecommuting was not mainstream before, during the pandemic, a good chunk of the population got a taste of the freedom and work/life balance made possible by working from home.
Then, companies began to shift their focus back to the office, calling in remote workers and eliminating some of the pandemic-era benefits. LinkedIn recently surveyed more than 2,900 C-level executives across the globe. They found that many business leaders are concerned that they will have to wind back progress made during the pandemic on crucial areas of working life, such as flexibility (68%), skills development (74%), and employee wellbeing (75%). A new analysis of remote job postings on LinkedIn also shows that remote roles are in decline, indicating that remote work may have peaked.
Faced with this less-than-ideal reality, many employees just refused to return to the office. Some had already used the time at home and extra income from stimulus payments to make a career change. Some are becoming self-employed or starting new businesses. What’s left behind is a chasm between what employees want and what employers are offering. This conclusion is supported by the latest Bureau of Labor Statistics report (March, 2023) showing employees quitting outnumber those being laid off, with 1.7 job openings for every unemployed person.
An Unusual Bright Spot
People working in essential positions during COVID-19, and those sent home, faced health risks, stress and burnout, spurring a mental health crisis. Communities and work groups began talking more openly about wellness needs. They put new initiatives in place that remain today, including expansion of telehealth, improving access and treatment for opioid use disorders, expansion of school-based mental health care, and the rollout of the 988 crisis line.
Even with mental health needs brought to the forefront, companies are wise to put employee mental wellness as a priority, especially as federal public health funds supporting mental health services draw to a close in May, 2023. Improved workplace wellness has been shown to improve a company’s bottom line and increase employee retention.
How Business Leaders Can Navigate Uncertain Times
Clearly old ways of management and employee engagement are not working. Businesses that will succeed are those that can embrace change, adapt and communicate effectively. This new frontier may take some time to explore, but as new ways of working emerge, nimble companies have an opportunity to outperform competitors in the long term.
Research firm McKinsey studied top successful companies across ten industries in the U.S. to determine the nine keys to becoming a future ready company. These include:
- What the company stands for: Purpose, values and culture.
- How the company operates: Structure, decision making and talent.
- How the company grows: The ecosystem, tech platforms and learning.
A 2023 RedThread research study recommends adaptation occur in both operational practices and by leaders supporting manager effectiveness. The following pulls out key elements from both research studies, and focuses on steps businesses must take for future-thinking leadership in unpredictable times.
1. Organizational practices driving manager effectiveness. To start with, if your company does not have a pay equity, personnel diversification and inclusion policy, add one. Explore flattening your operational structure by decentralizing decision making processes into smaller teams, minimizing hierarchy that can slow down decision making. Well trained workers are more productive when they are directly involved in the decision-making process rather than closely supervised by layers of management. The company should also ensure:
- Organizational goals are clear, and managers are able to communicate goals well to teams.
- Provide multiple resources that managers can deploy to employees to do their jobs more effectively, such as outside coaching, additional resources to do their work more effectively, or information that enables them to understand their purpose.
- Be flexible to reassign top talent and financial resources to lines of business, creating the most value.
2. Effective management practices. Our brains do not all work alike, and some employees need a more specific roadmap that helps them identify how they can succeed. An organization should provide examples of what “good” looks like for each role. When teams are smaller, management takes on the role of coach, understanding, and supporting individual team member strengths. Approaches to deploy management practices include:
- Clearly define steps and supportive resources that will help employees understand how to get there.
- Be transparent in providing data on team progress. Providing feedback along the way allows for course corrections, making adjustments for better outcomes as a team.
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3. Management adaptation. Core skills that business leaders and managers need in these uncertain times include enhanced communication, transparency, and empathy. Increase the value proposition for people not only to be present at work, but to be collaborative and productive team members.
- Share and Be Open to Change. Especially in uncertain times, those in leadership positions need to take employees along on the turbulent journey. This doesn’t mean sharing doom and gloom, but certainly being transparent about challenges, how that translates to business priorities, and the team’s role in the successful outcome. Flexibility is the key here–we are making our best guess about the future in times of uncertainty, so now is an opportunity to embrace change and practice adaptive leadership.
- Have clear and Consistent Communication. Managers should build a plan for the team to meet challenges and provide clear and consistent communication. As turns in the road approach, it is crucial to keep teams informed and help them adapt. Repeat plan goals. Ask team members to state their part. Regular communication, especially through uncertain times, will help keep employees motivated and engaged, leading to greater productivity.
- Maintain Trust with Empathy. During the pandemic, employees worked more independently. To bridge the disconnect between employee and employer wants and needs today, leadership needs to build a culture of trust and avoid micromanaging. What’s important is that the job, project or task is done well within the needed time frame. Besides a flatter organizational structure and smaller teams, employers should prioritize worker well-being. This can be done through respectful communication and flexible work approaches within assigned goals, resulting in a greater return on business performance.
4. Attract top talent. Labor shortages persist across the country. However, after a company has done some ground work to be future-ready, they will more competitively recruit the best employees with these offerings:
- Strong company culture: A positive and inclusive company culture can attract top talent who are looking for a workplace where they can thrive and feel valued.
- Competitive compensation and benefits: Offering competitive salaries, bonuses, and comprehensive benefits packages can demonstrate that a company values its employees and is committed to their well-being.
- Opportunities for growth and development: Top talent wants to work for companies that offer opportunities for growth and development, including training programs, mentorship, and career advancement paths.
- Innovation and technology: Future-ready companies are those that embrace innovation and technology, which can be a major draw for top talent who want to work with cutting-edge tools and techniques.
- Sustainability and social responsibility: A commitment to sustainability and social responsibility can also attract top talent who are looking for employers that align with their personal values.
- Work-life balance: Offering flexible work arrangements, such as remote work, hybrid work or flexible schedules, can be a major selling point for top talent who prioritize work-life balance.
Business leaders would be wise to accept that the old way of doing things may not fly with today’s workers. Being open to change and adopting new strategies will not only help future-proof an organization, it will also help employers attract and retain top talent that is engaged, motivated, and invested in the company’s future success. The businesses that emerge strongest will be those that are forward-thinking, invest in their people, and embrace new ways of working.