Say "so long" to the 'social contract' between employers and the employed. For many years this unspoken, but generally accepted, agreement meant that as long as management paid a living wage, employees stuck around. In practice that meant that in the 1950s and ensuing decades, if you snagged a job at a high growth company you felt set for life. And, for the most part, you were.
But years of economic and social upheaval, mismanagement, laser focus on shareholder returns, and the like unraveled much of that pact. The Great Recession of 2008 punctured most of the remaining trust between employees and employers, and in 2020, the pandemic delivered the final blow to that relationship.
If you need evidence, just look at the hundreds of articles on the 'Great Resignation', including this one reporting that 4.3 million US workers quit their jobs in August alone. That was up from 4 million in July. Several data points in Oracle’s new 2021 AI@Work study — which surveyed over 14,600 people across 13 countries — shows more evidence of this erosion and underscores several underlying factors including declining well-being for many employees.
A large majority (81%) of those surveyed said their companies should do more to protect the mental health of employees. That is up from 76% who felt that way a year ago, when the pandemic took hold.
Employees are ready for change
A surprising number of employees — especially younger generations — are willing to make changes to their work situations. An eye-popping 91% of millennials and 92% of Gen Z respondents said they want to make career-oriented changes, and that employers should do more to meet their career needs.
For all the tragedy wrought by the pandemic, the vast majority of people (93%) say they used the past year to re-evaluate life choices and ultimately, changed their definition of success.
Millennials were among the first generation of employees to come of age as their parents or older siblings got unceremoniously laid off and lost their 401K accounts during the 2008 downturn. Their view of employers is not colored by any belief in the Social Contract between employees and employers. Their mantra is something like: “I will work for you as long as you nurture me and my career. When you stop, I go.”
The study provides further evidence that the rules governing the employer/employee relationships have changed. Employees now want – no, demand – better career opportunities from their current companies, and are even willing to cede hard-won gains, including vacation time and monetary compensation, to make sure they get them.
Time for organizations to step – and listen – up
Companies that do not proactively offer innovative and rewarding training, education, and other creative ways to keep employees engaged will see their ranks depleted even more by the Great Resignation. Jobs change fast in this age of technology, but if you keep educating employees, they are more likely to feel engaged and in control of their work choices, and thus less likely to seek greener pastures elsewhere.
Employers must also do a much better job communicating with workers, not only asking them what will make them happier and thus more productive but acting on that input and communicating changes clearly. For example, everyone has now seen that, for many jobs, workers’ physical location does not matter as much as their skillsets and ability to get things done. Therefore, some of the companies at the highest risk of losing their best workers are the ones that do not promote workplace flexibility and don’t take employee opinion into consideration.
The pandemic has irrevocably altered the relationship between employers and the employed. Companies that do not realize this, and fail to focus on creating an empathetic, flexible, and responsive workplace with clear opportunities for advancement, will find themselves on the wrong side of history. And ultimately, they will pay an existential price as employees find better situations elsewhere.