Is the Era of Employee Empowerment Over?
Labor market dynamics shifted with the COVID-19 pandemic, with employees gaining more leverage than ever before and employers struggling to retain workers without giving in to various demands, from flexible work policies to higher pay and better benefits.
But as a recession looms over the U.S. economy, signs are suggesting the scales are tipping back into the employer's favor.
Over 70% of workers now regret having quit their jobs as part of the Great Resignation, according to a survey by job search company The Muse, and many are returning to their previous employer — a trend referred to as boomerang employees.
The main reason for this, according to the survey, is that the new job didn't turn out to be exactly as advertised. In an attempt to boost hiring, some employers may have painted a much rosier picture to candidates, taunting the allure of remote work when remote wasn't really on the table. Others implemented policies they had no intent on keeping — and are now calling employees back into the office for good.
Does all this signal that the era of employer empathy and worker flexibility is coming to an end?
Employees Are Still in Power
During the Great Resignation, it became clear that employers who didn't show empathy through their workplace policies or offer some of the most popular benefits struggled with employee retention and productivity. But employees, at the time, had significant leverage. In 2023, the story looks different, as an increasing number of companies are expected to return to the office.
While the return-to-the-office trend may be an indication that employees have diminished power in labor negotiations, a BBC News article argues the standoff is far from over. "The pivot to go back to an office is occurring at a time of a tight labour market," wrote Ian Rose.
Job openings remain high in the U.S., with the latest employment data showing little change since November. Companies that are too quick to demand a return to the office may find themselves in a difficult turnover situation. According to the BBC article, some workers are choosing to quit instead of complying with the demand — and many are finding a new job in a matter of days.
Until there is a complete reversal of labor trends, it is unlikely that employees will lose their negotiating power, and companies that put an end to flexible work risk seeing their best talent walk out the door. And even with rising unemployment rates, it's unlikely we will see a return to pre-pandemic practices. The problem for business leaders is that there are many ways that employees can rebel against a poor workplace experience, other than leaving. The quiet quitting trend proved that to be true in 2022.
Well beyond that, the labor market has changed. We now have new generations seeking new experiences, and employers are in a better position, thanks to technology, to accommodate various ways of working to ensure long-term success.
Arno Markus, founder and CEO of iCareersSolutions, said no matter the economic environment, companies should always prioritize the retention of top talent because it is through those skills and attitudes that the business can grow. Companies that empower employees, he said, can benefit from improved productivity, greater innovation, more efficient problem-solving and reduced recruitment costs, just to name a few.
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Let's consider for a moment that the power does shift back into the hands of employers. Keeping in mind that the behavior of leaders set the tone for the entire organization, if leaders reclaim power, they, by that logic, would only stand to benefit from passing it down to their employees. It's a win-win, where employees are happy and high performing, while leadership remains in control.
Markus argues that leaders who empower their employees are seen as more credible and trustworthy. They are seen more as equals than rulers, which helps instill a healthy employer-employee relationship through which new skills are honed and job performance is improved.
A report by The Comms Guru shows a trust gap between employers and employees. While on average workers place a high level of trust in their CEO, they nevertheless say they trust their co-workers more. There is a great opportunity for leadership teams to fill that gap by adopting new behaviors that promote trust, and this includes putting the well-being of employees at the top of the list of priorities.
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Remote Work for a Positive Employee Experience
Employees around the world have gotten used to remote working, and most continue to seek flexible arrangements wherever possible. Research conducted by GoodHire has found that 45% of employees would take a pay cut to work remotely, and 89% of Americans prefer remote work over other work models.
Yet, some companies continue to drive a different scenario, showing little to no trust in their employees working out of sight from managers. This forced return to the office will end up costing companies significant resources. For instance, when Elon Musk forced Twitter and Tesla employees to return to the office, many decided to look for employment elsewhere. The result: both companies lost a lot of key talent.
Lucia Ursic, employer branding manager at Async Labs, said this illustrates the idea that employers and employees in reality have an equal balance of power. Organizations can set the rules they want, but employees can choose to take them or leave them. Communication between the two parties will offer far more benefits than fighting for control, she said.
Part of resolving this includes setting clear policies, establishing controls, promoting honest and transparent communications, and focusing on the bigger picture that ultimately satisfies both employees and employers.