Leveling the employer-employee playing field has brought unexpected challenges with decentralized decision-making, employee expectations, generational shifts and a broadened model of leadership.
In 2008, Glassdoor’s co-founders launched a new digital platform to empower job seekers. There wasn’t a ton of transparency and information available back then to help people make one of life’s most important decisions—choosing your job and the company you work for, the place you spend most of your waking hours. Power was all on the side of the employer. While companies could review a job candidate’s resume and check their references, prospective employees had limited tools available to gather meaningful information about the companies that might hire them.
Thirteen years later, the employer-employee playing field is far more level. Glassdoor has helped normalize workplace transparency, and employees have used our platform to engage in a conversation with employers to help project and shape their employers’ brands. Concurrently, broader economic and societal trends have contributed to greater influence for employees, both collectively and individually, within their companies.
With employees having a greater say, and their opinions mattering more than ever, we’re experiencing unprecedented democratization in the workplace. A number of trends, including talent shortages, a heightened acceptance of social activism, a growing expectation that companies are true to their missions and the megaphone effects of technology, are driving this change, which is creating opportunities and challenges for today’s corporate leaders.
Challenges for Leaders
Along with the rise of the global knowledge-based economy, there has been a growing scarcity of talent. Employers recognize the critical value of the individual worker and are increasingly investing in attracting and retaining top people. Central to that effort is the need to build a best-place-to-work environment, where the paramount goals of employee satisfaction and well-being are achieved through employee-focused initiatives that go well beyond compensation and benefits. To secure and keep individuals at every level of the company, executives are ceding more control over corporate direction and execution, and listening more intently to employee inputs and feedback.
This can be complicated for leaders. Historically, they haven’t had to engage the broader employee base in decisions. It was expected that leadership would make a decision and employees would follow. That approach is not effective in a knowledge-work economy. Today’s workforce expects transparency about how the company’s strategy will inform future business decisions. They want to understand the decision-making process for choosing customers, and the roadmap for developing new products and pursuing new markets.
Off-setting those potential complications are tangible benefits to giving employees a greater voice, because decision-making is becoming more decentralized in larger companies. If employers have highly paid, valuable workers on the front lines, they should give them some level of autonomy and decision-making authority. If employers don’t have information flowing freely to those employees, they can’t make the right decisions. They would be making a decision in a vacuum, and that could become problematic.
Optimizing for Employees
This evolution raises predictable questions about what is reasonable in terms of employee expectations. Some may think those expectations have gone too far. But I believe that leaders need to have a holistic and long-term view of the value of their employees. Companies used to optimize solely or primarily for shareholders, but now they are expected to optimize for a broader set of stakeholders, including employees. That is not a zero-sum equation, where any benefits for employees come at the cost of shareholders or vice-versa. If you take a long-term perspective, it’s truly a positive-sum game: Optimizing for employees will drive shareholder value.
How do we know that? Because every year for the last 13 years, Glassdoor has created a list of the best places to work, based entirely on input from employees in the United States and around the world. These companies consistently outperform the general benchmarks of performance for public companies. That means the shareholder returns of companies that treat their employees with respect are higher than the returns of companies who are less effective in making employees feel valued.
That’s a fascinating, powerful result—and it’s not just correlation. There even appears to be causation there. We have seen that if companies start genuinely improving their Glassdoor rating, that can lead to higher shareholder returns. This makes sense, because in a knowledge-work economy, the companies that treat their employees best will attract and retain the best talent. And happy employees are more productive employees.
A second trend driving workplace democratization is a generational shift in attitudes and expectations of the role of companies—and leaders of those companies—in being a positive influence in improving society and making the world a better place. The millennial generation and those following in its footsteps want more than a solid paycheck and great work-life balance from the place they work. Glassdoor research shows that two of the most important factors to worker satisfaction for this cohort are having a compelling company mission, and promoting transparent and empathetic leaders. That requires greater alignment of leaders and employees within companies around how they want their businesses to be a force for good.
Not surprisingly, we’re also seeing more discussion on Glassdoor around themes of social justice and the importance of diversity, equity and inclusion in the workplace. For example, in the wake of George Floyd’s murder, we saw a 63 percent increase in mentions of racial justice, Black Lives Matter and other related topics in employee reviews left on Glassdoor. When we see topics come up more in the broader conversation in society, they also quickly appear in reviews on our platform. People want to know what their employer is going to say and do about these issues, and that is being driven in part by the emergence of this shared idea that companies are in the best position to effect broader change.
CEOs as Community Leaders
In a recent survey, nearly two-thirds of respondents said they trust their CEOs more than they trust their government and religious leaders. With that trust comes an expectation that CEOs and leadership teams speak out on a broader range of topics. Not every CEO agrees with that. Many don’t want to get involved in issues outside the company. They want to stay focused purely on business issues and leave everything else at the door. That sentiment is understandable, but I’m not convinced that it’s a winning strategy.
At the end of the day, the best talent expects their companies and their leaders to have a voice. That raises challenging questions for CEOs, such as, to what extent is the company voice my voice? The answer may seem obvious, but it requires senior leaders to be more open-minded to lead effectively. The point is that CEOs need to act not just as business leaders, but as community leaders as well.
We spend so much time at work, and when we give our whole selves to the work, almost any issue in society can feel like a workplace issue in some respect. And people expect companies to take a stand. In another Glassdoor survey, we found that around 81 percent of professionals between the ages of 18 and 34 said they expect their companies to take a stand on social issues and to follow through—specifically through volunteering and donations. If you look at the almost $12 billion worth of donations that have flowed into supporting movements around racial equity, more than $8 billion has come from corporations. That shows the outsized influence that corporations can potentially have on these issues, and employees are requiring their employers to make a difference.
On a personal level, I’ve evolved my thinking on what issues are workplace issues or not. In the past, I may have had an opinion on an issue, but I also may not have thought that my opinion mattered in the context of work. But given that people are trusting their CEO more than government leaders and religious leaders, that trust brings the responsibility that your opinion holds weight. You can’t shirk from that. It requires you to be a more well-rounded leader.
Technology Shifts Power
Reinforcing a heightened respect for employee points of view and the importance of mission within the corporate world, technology has been a clear “force multiplier” in shifting power from employer to employee. Digital media platforms drive transparency and democratization. Today, if an employee has a good or bad experience with an employer, they can broadcast their message to a vast audience.
Looking ahead, we can expect the trends driving workplace democratization to accelerate. Because of artificial intelligence, robotics and broad technology shifts, the workforce is increasingly going to turn into a knowledge-worker population. The value of the employees’ work will be even higher, which means that employees will have an even stronger voice. The challenge for the workplaces of the future is getting everything that’s on the minds of the CEO and leadership team distributed down to frontline workers, who are making highly important decisions. We’re going to have tools that will facilitate that, and that’s going to be powerful. But leaders at all levels should not overlook the challenges this shift in strategy creates for them. In a post-COVID-19 world, societal issues will continue to emerge, and employees will expect their employers to respond.
According to the data, what employees really want is crystal clear: They want their company to have a mission and for their work to have a purpose; they want leadership to be authentic, to value employees, to communicate well, to operate transparently and to be thoughtful about career growth within the company. The companies with leaders who embrace the broadened role being thrust upon them will attract and retain great people and thrive within this evolving environment of transparency and democratization.
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