How Can A Rebalance Of Power Help Re-energize Your Workforce?
From our Thought Leader Contributor, EY
EY Global People Advisory Services Deputy Leader and Workforce Advisory Leader
Principal, People Advisory Services, Ernst & Young LLP
Three questions to ask:
- How can organizations reinspire their workforce after years of disruption?
- How can generative technologies add value to the human experience of work?
- How can leaders better connect the “how” and “where” of work, to the “why” of work?
Years of disruption have propelled employers and employees into distinctly different worlds of priorities, pressures, and prospects.
Now in its fourth iteration, the latest EY 2023 Work Reimagined Survey reveals an emerging skyline for the “next normal” of work, detailing the contours of a rebalance in workforce realities and what factors contribute most to better outcomes.
Organizations are no longer purely driven by the lingering consequences of the COVID-19 pandemic. Employers now see their challenges through the cyclical lens of economic, labor and geopolitical pressures, requiring workforce strategy to more fully move beyond any one business function. Hybrid work has evolved to require more thoughtful considerations for how technology, office space and amenities influence productivity, culture, and trust, but also consideration of the risks involved with a more mobile workforce. Employees, meanwhile, are guided largely by structural workforce realities, retaining more perceived power in the labor market and being willing to change jobs to get what they want. Many employees are driven by a need for better total rewards packages amid high inflation and cost of living, by their desire for better well-being, and by a need to have the skills to succeed in a world of continued work flexibility.
The survey shows:
- Thirty-four percent of employees say they’re willing to change jobs in the next 12 months, with employers being more likely than employees to think economic challenges will reduce likely employee turnover. Pay remains the primary employee concern, keeping focus on comprehensive total rewards programs.
- Employers and employees believe the power balance has slightly shifted back toward employers in the last year, although employees have gained 8% in perceived power since 2019.
- Cultivating trust and having a people-centric leadership model is linked to significantly better organizational outcomes, including perceptions of better culture and productivity.
- Skills-building and training are top priorities for employers looking to upskill and reskill their workforce and for employees looking to remain competitive in a still strong labor market.
- Both employees and employers show enthusiasm for Generative AI (GenAI), with a net positive 33% expecting benefits to productivity and new ways of working, and 44% net positive for impacts on flexible working. But both groups see GenAI training as a low priority.
- Among knowledge workers whose work is traditionally based primarily on using analysis or subject expertise in a professional office setting, more than a third prefer to work fully remote, with stronger preference shown among women than men. Just a fifth of employers prefer fully remote, with a majority wanting employees to work at least two or three days per week in an office.
- Better quality commercial real estate is not enough to attract employees back to the office on its own, but organizations with higher-graded workplaces are also more likely to report better productivity, culture, and a decreased likelihood of employees wanting to quit.
Cyclical and structural pressures have revealed stark and persistent differences between employer and employee priorities. Navigating the way forward will rely on leaders seeing this Great Rebalance as an opportunity to re-energize their workforce strategy to be technologically evolved yet inherently people-centric, agile and resilient.
Chapter 1: Structural and Cyclical Tension
Navigating the workforce landscape depends on recognizing a rebalance of power
The emerging “next normal” of work is rooted in the interplay of cyclical and structural pressures, and how those pressures are informing employee and employer decisions. For employers, this has meant basing decisions on the realities of high inflation; on economic slowing and weaker market demand; on geopolitical instability; and on the need to secure their talent pipeline.
Employee decisions are also influenced by the economic climate, with real wages continuing to face pressure in many markets through the first half of 2023. But employees are also reacting to the reality of an aging and shrinking workforce. By 2030, projections show the talent gap could reach 85 million jobs, as new roles and technologies like Generative AI increase the demand for new skills and reduce demand for others.
Interpreting present market conditions through different lenses may influence how employers and employees see one another’s challenges and likely course of action. Employers, for example, are more sensitive to the perception that organizations are facing financial challenges. Just 47% of employees agree their organization is under growth or profit pressure, compared to 61% of employers. That gap in perception varies greatly by region, industry, and generation, perhaps reflecting the sense of economic instability or health across demographics.