The shifts in worker preferences… are permanent

Bhushan Sethi, Joint Global Leader for People and Organisation at PwC and Adjunct Professor at NYU Stern School of Business, believes the pandemic brought issues around diversity and wellbeing to the fore and made workers reassess what they want from their jobs.

What are the key concerns for employees driving the great resignation? 

Currently, there are two worker segments. There are empowered employees – in our Hopes and Fears Survey, we talk about them in terms of those that have specialised skills, are in demand and are highly mobile – for whom it’s still a seekers market. However, you also have onsite workers in areas like retail and healthcare that have less flexibility. 

For that scarce and specialised talent, some have coined the term ‘the great reassessment.’ Those workers with the choice, flexibility and agency have reassessed what they want from work, their employers and their lives. 

In our survey, the top three factors in what we call the resignation equation – what would cause you to look for another job – were job fulfilment, an inability to be your authentic self and, most visibly currently, worries about pay driven by inflation.

Employees previously left because of falling out with their bosses and becoming disengaged; that’s now only the fourth most important reason. Now, they don’t want to deal with psychologically unsafe working conditions, without flexibility or a sense of inclusion and belonging which prevents them from being their authentic selves. 

Is the great resignation purely a result of the pandemic or was Covid more like a catalyst that brought pre-existing concerns to the fore?

Covid has obviously been a catalyst for hybrid working and flexibility, but discussion on inclusion and wellbeing, which are inexorably linked to mental and physical health, have also been driven by Covid. 

Pre-Covid people didn’t feel empowered to talk about their physical or mental wellbeing in the workplace, but all aspects of DEI are really relevant now. We’ve had George Floyd; the war in Ukraine; Asian hate crimes in the US; social mobility in the UK. We are talking about various aspects of DEI. Around the world companies have had to say, “We want to hire people that are reflective of our customer base and our communities… we want to give those people a sense of belonging.” Those things were happening pre-Covid, but Covid has shone a light and driven discussion in those areas.

On pay, yes inflation has been driven by Covid stimulus packages fuelling increased consumer demand around the world, but more recently it’s been the war in Ukraine that’s increased prices. That may not be Covid related, but is an example of a geopolitical shock. This highlights the need for more robust scenario planning when re-evaluating business strategies in today’s geopolitical and macroeconomic environment.

What are key steps that employers have taken to try and mitigate the effects of the great resignation? 

Since the start of Covid, companies have been getting data from current and departing employees and potential candidates. Similar to our Hopes and Fear Survey, they’re asking, “What would cause you to look for a new job? What is more important to you in a total reward package?” Pay is table stakes, but is it sabbaticals? Healthcare? Investment in equipment for working from home? Training opportunities?

They’re doubling down on investment in leadership development, with work being done on developing inclusive leaders. In hybrid working, it’s become more important that all employees have a voice, and the interactions between senior figures and employees need to reflect that need for inclusivity.

They’re making work more fulfilling. Leaders are redesigning work to differentiate between what work needs to be done together (synchronous work) versus what can be done separately using workflows (asynchronous work), without the need for unnecessary meetings.

Simplifying that work does impact fulfilment, which in turn impacts people’s wellbeing, their feeling about their job and their relationship with their employer, which does drive retention. 

Finally, they’re clarifying their employee value proposition – why would someone work for our company versus another? Is it how we lead? Is it our talent development, additional rewards or workplace culture? 

Once organisations establish that, it requires commitment and effort to ensure it’s genuine and executable. If someone joins and feels they were sold an experience that isn’t actually genuine, you can be sure it will end up on social media, which could have a significant reputational impact.

How crucial is getting access to more real-time information about employee sentiment (compared with annual engagement surveys) in determining how employees are feeling about their work environment?

It’s important to say that annual appraisals aren’t dead; annual earnings and figuring employee rewards based on business health and cash flow require them. It needs to be supplemented by real time feedback that people can action. That’s what retains staff and builds good reputations for employees.

The ‘360’ is useful because you’re obtaining feedback from lots of people. You’ve got to make sure you account for any biases or any ‘drive-by feedback’ where people just complain and are looking for ways to criticise people. You want a development culture where you give feedback, and you actually then give people actions around things they can change. 

People will also welcome feedback from people they respect and trust. That points back to psychological safety, and for that, leaders require compassion. Our society likes to call out people that fail or make mistakes. If somebody’s not having a great quarter or not meeting their sales goals, don’t read them the riot act. Instead, be understanding: “you’re a great performer normally, is there something going on? Can I help you? Can we be doing things differently?” 

Do you anticipate the employment market will settle down to a pre-pandemic state, or is the great resignation in fact a permanent shift in the mindset of employees and how they approach work?

Those with specialist and in-demand skills and the ability to adapt and re-skill will still feel empowered in today’s talent markets. With one in five looking for a job according to our survey and one in three looking for a raise, there will be plenty of talent being externally recruited and internally retained. As talent markets inevitably loosen, with higher levels of unemployment, hiring freezes and layoffs – the outlook for specialist and scarce talent remains positive – with employers or investors from private equity seeking out good people with agile skills. 

We also need to remember that the shifts in worker preferences about flexibility, valuing their wellbeing and wanting to be their authentic self are permanent. Top talent will expect this – otherwise they’ll vote with their feet. 

The biggest challenge for employers is those employees without that flexibility, like those on factory floors. Employers need to look at digitising those jobs, then investing in reskilling for those workers. They need to bring those workers along with them, enabling them to participate in the digital economy and not create greater inequity – in the workforce and society.