The current global layoffs across almost every industry are interfering with the relationship between employee and employer, and negatively affecting engagement, says Sara Holberg.
Layoffs may guarantee short-term cost savings, but also come with the long-term harm to company culture, especially from a diversity, equity, and inclusion (DE&I) perspective.
Companies in the top quartile for racial and ethnic diversity are 35% more likely to financially outperform their industry median, while those leading in gender diversity are 15 percent more likely to succeed, according to research by McKinsey.
Despite this, DE&I roles have been overrepresented in the recent layoff trends we’ve witnessed globally. Recent research from workforce intelligence organisation Revelio Labs found that the attrition rate at companies laying off employees was 57 percent higher for DE&I roles than non-DE&I roles.
This damage to DE&I goals and professionals will inevitably impact company culture and levels of engagement over time. As a result, leaders should see this as dangerous situation for business stability and growth, especially in times of labour shortages, turnover and quiet quitting.
The only way business can navigate the current employment crisis is by putting their people first. A key for this is investing in building a strong culture that promotes opportunities, fulfilment and purpose for everyone, no matter their background or gender.
In this piece, I would like to suggest four tips for businesses looking to engage with and retain their workforce:
1. Know and care about your people:
It’s no surprise that the past two years have been driven by uncertainty. As a result, employees are struggling to prioritise their work. Winningtemp data show that motivation has dropped considerably. We compared motivation rates during the pandemic, and the results are striking: in mid-2021, we spotted an average drop in motivation of 7-8 percent compared to 2020. Although this trend is now reversing, by mid-2022, motivation levels were still lower than two years before according to our network.
Every business leader knows that engaged employees perform better. To do so, they need to intrinsically enjoy their jobs. This is why knowing your staff and caring about them as people is vital. This includes asking them what their values, goals, dreams, challenges and strengths are. This will help business leaders spot their employees’ core motivations and see how they can capitalise on them at work. For larger organisations where the leadership team may not be able to get access to every individual, it’s worth noting that sophisticated employee engagement platforms now offer ways to measure employees’ fulfilment at work. For example, division heads can now use metrics such as person-job fit to better assess whether their current staff is in the right role and make necessary adjustments to ensure roles are still fulfilling for employees – whoever they are.
2. Do more for your culture:
It is no surprise that rising inflation is directly impacting employees’ priorities in and out of work. The current climate can lead to friction between employee and employer by putting common concerns like salary, work-life balance, inclusivity at work, or mental health in the spotlight. Even the most loyal employees are at risk of turnover.
For businesses who cannot afford salary increases for all, the best way to build a recession-proof workforce is by creating a healthy company culture. Organisations must embrace the importance of creating a clear vision for their culture, driven by the company strategy, needs and goals. Then proactively measure, adjust, and tighten misalignments, and repeat this over time. A strong culture acts as a north star, attracting better job-fit employees who are less likely to leave because they believe in their company’s vision and align with its mission.
3. Offer opportunities to learn new skills:
Employee development should be an ongoing goal for every organisation. Promoting employees learning and growth is critical to retention. According to McKinsey research, 94 percent of employees say they would stay longer with a company that invested in their career development.
Additionally, investing in the right learning and development programmes (L&D) is an internal tactic to tackle skills shortages. Proof is in the pudding: 79 percent of L&D professionals think that reskilling an existing employee is less expensive than hiring a new one, according to study by LinkedIn. This makes sense both for the employee’s career perspectives and for the business, making it an essential initiative at a time when organisations are looking to create efficiencies. It also ensures that those who may not have had access to the same level of education before entering the workforce can benefit from on-the-job training, effectively helping provide equal opportunities for employees over time.
I would recommend organisations start by setting learning expectations with employees. Doing this will also give them control and ownership over this process if done through self-thought learning tools, which connects to the key idea of autonomy to foster trust and engagement. If employees can grow within their current organisations, they will be less likely to look for a new job elsewhere.
4. Drive employee purpose:
After the Great Resignation, we have learned that employees care more about meaningful work. People choose jobs that align to their own values, wellbeing, and personal purpose.
During the inflation crisis, providing purpose to your workforce isa valuable business USP. Organisations may be able to hide a poor employee experience when the economy is in its best state behind generous bonuses. But when the money is lacking, knowing and understand what makes people get out of bed in the morning is critical for the survival of a company – and its culture. Today, it’s no longer enough for a business to be innovative, a large player in the market or to offer good perks – having a clear purpose backed by action is essential for a growing number of employees.
The road ahead is likely to be a bumpy ride for a majority of companies, and most of them will find themselves having to make efficiencies. Whatever course they need to take, business leaders should never forget that their employees play a central role in achieving the company’s goals. As such, any initiatives designed to reduce overhead should go hand-in-hand with improving company culture and maintaining the levels of engagements in DE&I that companies had before the start of the inflation crisis.
Those who can weather the financial storm while keeping their people happy and fulfilled will be rewarded by increased staff loyalty, as well as a positive image among their clients and partners – whoever they are, and whatever their values.
Sara Holmberg is Head of HR at Winningtemp.