Pandemic Reshaped the ‘Employment Deal’

Roy Maurer By Roy Maurer October 22, 2020
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woman working from home

​The relationship between professionals and their employers shifted significantly this year due to the major transformation in the way people work, pushing organizations already tuned to the future of work into rethinking HR strategy.

"Employers are focused on providing employees more flexibility than ever before, creating a shared purpose and building deeper connections with their employees," said Brian Kropp, distinguished vice president and chief of research in the HR practice at Gartner, a research and advisory firm in Arlington, Va.

Kropp opened the Gartner ReimagineHR Virtual Conference with a keynote Oct. 13 on the evolving "employment deal" between employers and employees, which he said increasingly centers on positively impacting employees' lives while improving talent outcomes for employers. The conference was held Oct. 13-15.

Kropp said the employer-employee relationship has matured in the U.S. since the 1950s from a "tug-of-war" between employees providing their labor to employers in exchange for benefits and compensation toward a more humanized approach aimed at increasing real engagement from employees by showing that they, their families and their communities are cared for by their employers.

Three components of this new framework include providing workers more flexibility, creating a shared purpose between employers and employees, and building deeper connections with employees on a personal level.  

"The organizations that get this right will have a more engaged workforce, greater employee retention and better ability to attract the best talent," he said.

Flexibility Fuels Performance

The coronavirus pandemic caused nearly every professional employer to shut down its workplace and move employees to work from home full time. While some employees are trickling back to the office, many continue to work remotely.

"Progressive organizations have embraced radical flexibility, giving employees control over where, when and how much they work," Kropp said. "Offering employees more choices over when, where and how many hours they work is not only better for employees but also better for employers who end up with more high-performing employees as a result."

Gartner research bears this out: A survey of 5,000 employees from the beginning of the year revealed that at typical organizations where employees work a standard 40 hours per week in the office, only 36 percent of employees were high-performers. When organizations shifted from this environment to one where employees had choice over where, when and even how much they work (e.g., the choice of working 80 percent of hours for 80 percent of pay), 55 percent of employees were high-performers.

It's inescapable that behavior and sentiment around work location preferences took a radical turn in 2020. "Many companies are shifting to a remote-first strategy for their workforce, while others are crafting a hybrid workforce strategy where workers are split between working onsite and working at home, based on business needs," said Robin Boomer, a director in Gartner's advisory practice. "The right blend is important—employers should start to prepare for a hybrid work location strategy that meets the preferences of a broader range of the workforce."

Gartner data shows that the percentage of workers who prefer to primarily work in the office dropped from 30 percent before the pandemic to 12 percent. Those who prefer a blend of onsite and at-home work fell from 33 percent to 24 percent. And those who prefer to primarily work from home rose from 10 percent pre-pandemic to 30 percent.

Shared Purpose Is Needed

Creating a shared purpose involves going beyond corporate messaging to take real actions and make real investments in issues that matter to workers.

Seventy-five percent of employees expect employers to take public stances on social issues even when unrelated to their business, according to Gartner data. "It's a fundamental shift from a shareholder-based economy to what is increasingly a stakeholder-based approach, forcing CEOs to have a point of view," Kropp said.

Gartner found that 40 percent of employees are considered highly engaged in companies that ignore current societal or cultural events, but that high engagement increased to 60 percent when the organization acted on the social issues of the day.

Research also showed that solely issuing a corporate statement—the most common organizational response—is worse for employee engagement compared to doing nothing.

"When organizations go beyond making statements and take actions like reallocating resources, changing suppliers, or giving employees time off to volunteer, the number of highly engaged employees increases dramatically," Kropp said.

He added that pulling this tactic off can be tricky, but successful companies make it work by ensuring that leaders and employees work together to co-create an action-oriented strategy, by practicing transparency, and by sustaining a dynamic strategy as opposed to a one-and-done action.  

Practicing co-creation and transparency keeps even the portion of the workforce that disagrees with the action taken on a particular issue more highly engaged. "Even if they disagree with the 'what,' they now understand the 'why,' and the employer is rewarded with higher engagement levels," Kropp said.

Building Deeper Connections

The third component is an extension of the work/life balance idea.

"A while ago, we started to think that there's work and there's life, and we began to think of ways to integrate the two," Kropp said. "The COVID-19 pandemic has made clear to employers and employees that work and life cannot be treated as two separate constructs. Work is a component of life. That approach has caused us to think differently about what we want to do in terms of engaging our employees, their families and their communities."

Typically, employers provide new technology and training to increase employee performance, tactics that solely focus on work, separate from employees' personal lives, he said.

"When organizations take a more holistic viewpoint of their employees and try to support them personally as well as professionally, employees report that their employer has a positive impact on multiple aspects of their lives."

According to Gartner's research, the rewards of stronger connections include better reported outcomes for employees, including increased financial, mental and physical health and better sleep, he said. The number of high-performers goes up, and the number of workers who promote the company increases. "Those workers are less likely to quit and more likely to say good things about the company in the labor market," Kropp said.

He added that organizations are building deeper connections with employees by offering professional counseling services to support mental health, providing free access to learning and development resources to friends and family members who have been impacted by COVID-19, and helping parents with child care and virtual learning.

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