The global landscape of the last three years has been impacted by technological, environmental, geopolitical, and socioeconomic changes, putting pressure on companies to examine their governance models. Today, companies must serve for something more than simply generate income; they must be an entity of engagement and relation, able to enforce solid changes in the world and the life of those around them.
Changes that apply from where we live, how we work, to the impact we want to leave in this world. In this sense, companies have had to change the traditional model in which they operate, substituting, in most cases, the on-site model of work for remote work or hybrid models, leading to the necessity of allocating dynamic resources and accelerating digitalization and automatization processes.
The reality is that the needs of the employees have changed. At least two out of three employees in the United States declared that the COVID-19 pandemic made them reflect on their purpose in life, including their professional careers (Komm et al, 2021). Likewise, almost half of employees are considering the type of work they do and its impact and purpose in their environment (Dhingra et al, 2021).
In August 2019, months before the pandemic unleashed, more than 180 entrepreneurial leaders signed an agreement on corporate purposes. This agreement's main objective is to promote the change of a business model, based on the financial and operational interest of shareholders, to one focused on solving environmental and social risks at the service of all key audiences: consumers, employees, suppliers, communities, and shareholders. This is known as stakeholder capitalism, a business management model which became popular in the 1950s and 1960s, and seems to have a lot of buzz these days (Sundheim y Starr, 2020). Stakeholder capitalism is one of the tools that organizations can use to maintain relevant, committed, and connected with their internal and external audiences.
On another matter, recruitment and retention of employees are not just about salary, although this plays an important role in the motivation of workers. Non-monetary rewards, that is to say, intangibles, present in companies with a relatively stable workforce and those that emphasize customer service, loyalty, and cooperation among employees (Gómez et al, 2016), seem to be more relevant each day. Many workers now seek flexibility in their schedule and workplace, a good work environment, challenging, interesting and attractive tasks, as well as elements like feedback and constant support from their supervisors.
During these last few months, the United States has identified a phenomenon known as “The Great Resignation” which refers to the massive exodus of employees for various reasons. According to a US analysis, resignation rates are higher among employees in the middle of their professional careers in the health and tech industries (Cook, 2021).
This situation demands organization leaders to adjust certain aspects of corporate cultures. Work satisfaction translates in higher resignation rates, thus, a loss of valuable talent and a higher cost of recruitment due to rotation of personnel. This level of work non-satisfaction is not only present in young employees. After the pandemic, a third of employees of all generations and seniority levels assured they were open to labor changes (Debevoise, 2021).
In another study carried out in the United States, about 1,000 employees were surveyed in more than 15 industries, and the results showed that 40% of employees have thought about changing careers in the last 12 months. About 63% of those interviewed consider they have an inefficient manager and are thinking about leaving their current jobs. (Downes, 2021).
During the pandemic, many companies dedicated themselves to innovate, trying new ways to provide greater attention to their workers, and offering a better service to customers and employees. For example, some of them increased their support and production of medical equipment, while others accelerated their investigation for a vaccine. Certain companies showed their capacity to adapt to new realities and seek progress, become more agile, take care and oversee their consumers and employees. Even some of them continue to maximize and seize opportunities. The talent and motivation of the workforce, an innovating corporate culture, individual expertise, and the use of technology and artificial intelligence are all important sources of value for organizations.
According to a report published in 2021, companies exercise more trust and ethics than governments, mass media, and NGOs (Edelman, 2021). Business organizations outbid the ranking in key aspects such as economic growth, employment generation, health and security in the pandemic, quality of information, and equality. The study shows that at least 8 out of 10 employees expect their company to act towards social problems, such as the growing distrust in vaccination (84%), climate change (81%), and automatization (79%).
There are new expectations for mid-level leaders, not only for senior partners or high-level ones. In previous years, leaders were thought to be practically inaccessible for employees, however today, they must cohabit with employees, and as the board of directors, they must be involved in corporate purposes plans. The traditional organizational structures have been removed. Companies are becoming more human, inspiring, collaborating, and creating experiences with purpose and enjoyment for their audiences (Komm et al, 2021).
Companies need to implement more frequent communication, new habits, and behaviors that can improve wellness in the workplace: trust, transparency and allowing employees to participate in decision-making processes, but without transferring all responsibility to them. Another example is working parents that want and need solutions for the care of their children while they are away.
Post COVID, many leaders started to focus much more on the wellness of their team. Employees today seek a better balance between their personal life and professional one, with shorter commutes, mental health resources, and overall happiness. It is an opportunity for CEOs to create a sustainable work environment, diverse and inclusive, increase employee retention, build loyal customers and fill the world with a lot more humility.
Sustainability keeps being a key priority for consumers and CEOs. Today’s leadership starts with social responsibility. CEOs must understand that if the public sees them as a moral compass for credibility and authenticity, they must act that way. The public wants to see them talk about facts and lead by example.
Leaders are evaluated not only through achieving their business objectives but also for their business ethics. If a leader practices trust, honesty, and empathy in their day-to-day activities, both professional and personal ones, those same traits will naturally show up in their teams; thus, talent retention will increase. However, it takes time, these processes are not completed in a day, a lot of work must be done, back-office and on-site, a continuous work that never really finishes.
Juan Andres Miralles is a lawyer from Universidad Católica Andrés Bello (Caracas, Venezuela), currently pursuing his Master's Degree in Business Administration at Instituto de Estudios Superiores de Administración (IESA). He works in private legal practice and is co-editor of The Explorer. You can find him on Linkedin at Juan Andres Miralles Quintero and on Twitter at @JuanMiralles96.
Isabella Miralles is a social communicator from Universidad Catolica Andres Bello (Caracas, Venezuela), as well as an advisor of strategic and corporate communications. You can find her on Twitter at @isaMiralles, she also writes on Medium at isaMiralles.
Notes and references:
Cook, I. (2021, 15 de septiembre). Who Is Driving the Great Resignation?. Harvard Business Review. https://hbr.org/2021/09/who-is-driving-the-great-resignation
Debevoise, N.D. (2021, 30 de junio). How CEOs Can Keep Their Best People Through The Great Resignation. Forbes. https://www.forbes.com/sites/nelldebevoise/2021/07/30/how-ceos-can-keep-their-best-people-through-the-great-resignation/?sh=28c78d3b6077
Dhingra, N., Samo, A., Schaninger, B. y Schrimper, M. (2021, 5 de abril). Help your employees find purpose—or watch them leave. McKinsey Insights. https://www.mckinsey.com/business-functions/organization/our-insights/help-your-employees-find-purpose-or-watch-them-leave
Downes, S. (2021, 22 de septiembre). Why Workers Are Ready to Quit--and How to Get Them to Stay, According to a New Survey. Inc. https://www.inc.com/sophie-downes/employee-stress-mental-health-great-resignation-talkspace-survey.html
Edelman, R. (2021, 28 de julio). The Empowered Employee. Edelman. https://www.edelman.com/insights/empowered-employee-6-am-richard-edelman?%20utm_campaign=6am&utm_source=linkedin&utm_medium=organic+social&utm_content=16275%2012932
Gómez-Mejía, L., Balkin, D.B., y Cardy, R.L. (2016). Managing Human Resources. 8th Edition, Pearson.
Komm, A., Pollner, F., Schaninger, B. y Sikka, S. (2021, 12 de marzo). The new possible: How HR can help build the organization of the future. McKinsey Insights. https://www.mckinsey.com/business-functions/organization/our-insights/the-new-possible-how-hr-can-help-build-the-organization-of-the-future
Sundheim, D. y Starr, K. (2020, 22 de enero). Making Stakeholder Capitalism a Reality. Harvard Business Review. https://hbr.org/2020/01/making-stakeholder-capitalism-a-reality