The Hard Truths of The Changing Labor Market
If you were hoping “The Great Resignation” was just a short-lived and knee-jerk response to the pandemic, think again. The labor shortage is here to stay, and the consequences of this monumental shift are forcing employers to face some hard truths.
Employment growth in the US has significantly slowed, according to figures from the Bureau of Labor Statistics, which says that total employment will grow 0.5% annually through 2030, compared to the 1% annual growth rate seen from 2011-2021. As baby boomers and older Gen-Xers head into their retirement years, it’s becoming increasingly clear that there may not be enough new hires to plug the workforce gap. While there are some companies engaged in layoffs, such as Shopify, they are largely businesses that saw a huge uptick during the pandemic and the layoffs are due to a leveling off in demand for their particular services.
For employers grappling with hiring challenges, it’s time to face facts. The power dynamic has shifted, possibly for good, and workers now hold all the cards. If you’re not prepared to at least meet them halfway, you’ll likely find your “office” emptying over the next few years.
Focus on flexibility
Employees know that the power balance has tilted in their favor and, as such, they won’t be shy about asking for what they want. Gestures that were considered perks before the pandemic - flexible working arrangements, salary bonuses, extra vacation time, wellness initiatives - are now becoming the norm.
Flexibility, in particular, is a huge draw for jobseekers. With remote working still popular, many are finding that they can hit their deadlines and meet their KPIs without being chained to a desk from 9 to 5.
With that realization, they’re looking for the ability to better balance home and work life, wanting a more accommodating schedule so they can look after their children, spend time with partners, and reconnect with loved ones after the isolation of the pandemic.
According to a recent survey from McKinsey, 87% of employees want the ability to work flexibly, and the need for more flexible working arrangements is one of the top three reasons why employees leave their job.
The right to disconnect
The desire for more flexibility at work goes hand-in-hand with another recent trend - the right to disconnect. This is the right of employees not to do any business-related activity, such as checking emails or taking calls, outside of work hours.
A handful of countries around the world, including France, Ireland, and Portugal, have a ‘right to disconnect’ clause enshrined in their employment legislation, and many more are currently considering it.
While the US hasn’t taken that step yet, there is growing awareness of the need to draw clear boundaries between personal and professional time for the sake of employee mental health. Around 77% of US employees report experiencing burnout, and remote working is putting further pressure on these stressed-out teams, blurring the lines between home and office.
Just over 80% of employees think they should have the right to disconnect, according to a recent LinkedIn survey, and many now expect employers to have a policy in place that respects their time off the clock. Toxic workplace behavior, such as always expecting employees to be on call, is the biggest factor driving burnout and job abandonment, according to research from McKinsey.
Disconnecting during down time is important for employee wellness but equally important is a supportive, inclusive company culture that makes them feel engaged when they’re on the clock.
More than 80% of employees feel lonely at work, and almost half say they’re lonelier now than they were before the pandemic. All that isolation is having a negative impact on productivity, with lonely workers taking sick days, switching off, or simply dropping out of the workforce altogether.
Companies can combat this emerging trend by building a strong culture that goes the extra mile to make remote or hybrid employees feel connected. Adopting more inclusive tech tools, building better workplace relationships, offering perks like fun work trips - these can all help increase employee satisfaction and wellbeing.
How should managers respond?
To compete in this challenging labor market employers have to ensure that they are offering all of the above. They should also assess their tech stack to make sure they have the resources they need to do more with less if staff leave unexpectedly.
Responding to the post-pandemic headwinds may mean a shift in company culture and upgrading to new tools and processes, but businesses must pivot or risk plummeting productivity. Short-term shocks have now become long-term realities, and businesses can’t afford to ignore them.
Employee Productivity Monitoring (EPM) solution Prodoscore can help managers keep track of disconnected teams and make the most of their staff. The platform monitors activity across a company’s cloud-based tools so leaders can immediately identify any productivity gaps and monitor which employees are at risk of burnout. Contact our team today to schedule a demonstration or find out more.