This article is a part of the “Future of the Post-pandemic Workplace” series
History has presented today’s leaders and employees with a rare opportunity to reshape the way we work. In the following series, we explore yesterday’s leadership gap and its effect on the workplace today and lay the foundation for a new Hybrid Culture framework—one that shapes the future workplace in a way that is flexible, productive, engaging, and humane.
The series is composed of 6 parts:
1. The future of the post-pandemic workplace
2. Hybrid work the good, the bad and the undecided
3. The Divide – this article
4. The 3-lens Hybrid Culture framework
5. Belonging in the Post-pandemic Workplace
6. Belonging: Beyond Diversity and Inclusion
Part 3: The Divide
Studies show a growing disconnect between employees and leaders as the world goes through an accelerated period of transformation. While employees’ drivers, needs and aspirations shifted considerably during the pandemic, leaders are still working under outdated assumptions and need an urgent wake-up call.
We refer to this employee-leader disconnect as The Divide.
The Divide is why 87% of the employees today feel that their company is not attentive enough to their needs and why 85% feel unsatisfied with how their employers support them [1].
This article addresses the causes and effects of the employee-leader Divide, and the urgent steps leaders need to take today to first remedy and then benefit from this situation.
What’s at stake
In recent months the world has been experiencing a surge of voluntary resignation never before seen, referred to as “The great resignation”. This unprecedented trend has already reached new peaks in 2021 (with an average of 3.9M quits per month in the U.S. alone – see Figure 1).
Multiple studies show that an estimated 40% of the employees across countries, organizations, and roles plan to leave their companies in the next six months [2,3,4]. More alarming is the fact that 36% of employees who already quit their jobs during the pandemic have done so without having any other job lined up for them as a safety net. Some economists describe this trend as a type of general strike provoked by the accumulated frustration due to the pandemic and the widening disconnect between leaders and employees.
Studies show that replacing a knowledge worker and bringing a new talent up to optimum productivity takes, on average, 32 weeks [5], and the cost is conservatively estimated to be one-half to two times the employee’s annual salary [6]. These costs and the potential effect on productivity could lead to devastating short- and long-term outcomes for many organizations worldwide.
The good news, however, is that it is not too late. With the proper knowledge and deeper understanding of the employee-leader Divide, forward-thinking leaders can still make the necessary changes needed today to retain more of their current workforce while benefiting from a much more comprehensive selection of new talent in the very near future.
Figure 1 – The Great Resignation 2001-2021
What is causing The Divide?
The pandemic has triggered four parallel processes that are presently causing The Divide:
1. Change is in the air
Employees’ needs and wants have shifted considerably during the pandemic leading to an all-time high desire for change—internal, external, personal, and work-related. This behavior may very well have been triggered by the need to regain control after such a long period of lockdown. In a recent study, 83% of respondents said they want to make a career change in the next year, and 93% want to make a personal change in their lives. The pandemic has also been a period of more profound thought, and introspection—93% of employees say they used this period to reflect on their personal and professional lives and think about the future [1].
In this new climate of change and uncertainty, many leaders are under the false presumption that they understand their employees and their needs. Yet, in a survey of over 14 thousand participants across 13 countries, 87% of the employees felt that the company should do more to listen to their needs, and 85% felt unsatisfied with how their employers supported their careers [1].
2. Leaders are not aligned with their employees’ actual needs
While the employees’ motivation for career changes is soaring, many leaders struggle to lower the attrition rate without fully understanding the employee’s actual needs and motivation. For example, Leaders were found to repeatedly underestimate how important it is for their employees to (1) Be valued by the organization and the manager, (2) Have a sense of belonging, (3) Have caring and trusting teammates, and (4) Have a flexible work schedule. [2]
One survey shows a 26-point perception gap between leaders and employees when answering the question: ‘How well did your employer support your mental health’, and an 18-point gap when answering ‘How well did your employer help you manage your workload this year’ [4].
Additionally, one study found that 68% of leaders feel they created an empowering, innovative and safe environment, and 76% of leaders say their employees have a choice on when, where and how to work. Yet only 36% and 29% of employees respectively concur [7].
Similarly, in comparison to employers, most employees believe that their leaders have not done enough to support leadership training in a hybrid world (27-point gap). Other misalignments included: setting clearer rules on times to be available during remote work (18-point gap) and providing training for employees to work effectively in a remote environment (16-point gap) [4].
3. Leaders are misinterpreting the signs
Although recent years have been challenging, evidence shows an increase in companies’ performance and efficiency, and multiple surveys confirm a rise in employee work engagement [see for example 8, 9, 24]. While leaders bask in these very positive and encouraging results, they often ignore other crucial warning signs.
Yet, as anyone who has ever experienced burnout knows too well, it is often challenging to differentiate efficiency from exhaustion until it is too late. While employees’ efficiency has clearly improved, studies show it may mask larger-scale fatigue and burnout. A recent study shows a 12% increase in burnout rates in 2021 [21], and 89% of employees experience a decline in their work-life wellbeing. Additionally, 56% of employees say this decline was caused by increased job demands mainly due to loss of work-life separation, unmanageable workload and increased work hours, but also losing connection with their co-workers and feeling isolated [10]—all leading to a ‘Pandemic burnout’ impacting their work and personal lives.
“Engagement may no longer equate to loyalty to the organization in the post-pandemic era.”
Similarly, whereas levels of engagement continue to rise, studies repeatedly show a strong employee inclination to quit their jobs in the next 6-12 months[2,3]. This contrast means that, contrary to numerous studies done in the past [e.g., 3,24], engagement may no longer equate to loyalty to the organization in the post-pandemic era. In fact, one study shows that over 60% of the employees looking to leave their employer in the next 12 months are, at the same time, experiencing high levels of engagement [11]. The likelihood to quit was especially high for Gen Z (37% likely to leave) and senior management (35%)—who are more complex and expensive to replace.
4. The effect of the absent watercooler
While remote and hybrid work takes center stage, leaders have a more challenging time connecting with and understanding their employees. The absence of the proverbial watercooler—around which leaders could check the pulse of the teams and hold quick informal check-ins while picking up on essential cues—increases the employee-leader disconnect. Remote work also breaks down the old model of employee assessment, making it more complicated to accurately gauge employees’ efforts, progress and success, which drives eligibility for employee reward and promotion.
This new and ongoing disconnect demands a deliberate effort on behalf of leaders as they attempt to build new hybrid models and frameworks of connecting and pulse-checking with their teams.
5. Walking a mile
Constructing a new and effective hybrid work environment demands a deep understanding of the employees, their needs and their work-life struggles. Paradoxically, the leaders making these decisions today may very well be the least qualified people for the task.
Studies show that most business leaders today are thriving [8]. However, this is not the case for their employees. In fact, when asked, “Are you thriving today” those with decision-making authority had a +23-percentage point advantage over their employees who said they were either struggling or surviving. Leaders also report building stronger relationships with colleagues (+11 percentage points) and stronger leadership abilities (+19 percentage points). On the other end of the spectrum, the employees who struggled the most this year were: working moms (56% struggling/surviving), Gen Z (60%), and new employees (64%) [8].
Although leaders do attempt to walk a mile in their employees’ shoes, surveys show a bias in perception caused by this ‘thriving gap’. For example, while 81% of leaders claim they have successfully extended childcare benefits, only 45% of employees are in agreeance [4]. This lack of understanding due to the perception gap is one of the drivers for over 30% of working mothers today to consider downshifting their careers or dropping out of the workforce entirely due to lack of sufficient childcare [12,13]. Similarly, the disconnect presents itself with new hires, of which 37% report experiencing significant difficulties creating a connection and learning the culture during the pandemic [14].
What should leaders focus on today?
Managers wishing to remedy the employee-leader Divide should focus on the following four areas:
1. Flexibility is here to stay
While 83% of respondents rated the move towards remote work a success [4], there is still a vast divide between employees and leaders on the question of returning to the office once Covid subsides.
Recent surveys found that while 86% of C-suite executives expect employees to be back in the office for three or more days (with over 60% of them suggesting a “normal” 4-5 days of office work), 83% of the employees prefer to work from home two or more days, and 52% prefer working from home at least three days per week [15,16].
These surveys demonstrate that while leaders are looking at flexible work as mere perks or temporary fixes to the current pandemic problem, most employees perceive this newfound flexibility as a fundamental workplace requirement. In fact, 64% of the employees say they prefer permanent work from home over a 30,000 USD raise [17], and 42% of the current remote workers prefer quitting their job if their employer will not allow hybrid work in the future [18].
Leaders need to fully embrace the concept of hybrid work by striking a new employee-leader-project balance using multiple levels of autonomy and a Hybrid Culture.
2. Personal, not Transactional
Employees’ needs, as shown above, have clearly shifted towards greater flexibility and work from home. At the same time, 67% of the employees also crave closer collaboration and meaningful in-person time with their team members and managers [8]. Satya Nadella, Microsoft CEO, refers to this as the “Hybrid work paradox” [19].
These seemingly conflicting needs are not very different after all. Under closer inspection, it is clear they represent two trends that were simply accelerated during Covid. Employees today crave (1) more flexibility and control over their time–as seen above, and (2) a shift in work relationships from the transactional to the personal.
Having a humane, caring leader was always important for employees, but the onset of Covid-19 saw a surge in its necessity. Employees who feel cared for at work are 3.2x more likely to report being happy at work (2.4x before the pandemic – a 35% rise), and 3.7x more likely to recommend working for their company (a 49% rise due to the pandemic) [21].
As 40% of the workforce is currently considering shifting jobs [2], these are crucial times for leaders to step up and step in, moving inwards towards a more personal relationship.
3. Belonging is on everyone’s mind
While many organizations focus on transactional work perks, retraining and attracting the best employees should be approached through meaningful team conversations on deepening relations and consolidating the feeling of belonging (See figure 2).
A 2019 pre-Covid research found that belonging was highly correlated with engagement and wellbeing [22,23], such that people who feel a higher sense of belonging show:
• 56% higher performance
• 50% lower risk of turnover
• Take 75% fewer sick days off and,
• are 167% more likely to recommend and promote their workplace to others.
Yet, with the aftermath of Covid-19, the upsurge of remote work and the increase of reports on loneliness (especially for young adults), studies today show that 40% of people feel isolated or excluded at work. Working mothers, as shown above, are most affected, with 1 in 3 working mothers currently considering downshifting their careers or leaving their jobs altogether. It is frustrating to see how companies today spend an excess of 8 billion dollars annually on Diversity and Inclusion programs (mostly unconscious bias) that fail to make employees feel included [22].
To learn more about developing Belonging at work– read Belonging in the Post-pandemic Workplace in the “Leading the Post Pandemic workplace” series.
Figure 2: employees’ needs have changed during the pandemic
4. Change needs to happen now, not later
The pandemic has taken a toll on employees, and studies show that 85% of the employees today feel their wellbeing declined [10]. In a recent survey, 52% of participants felt they experienced more difficulty struggling with mental health at work in 2021 than in 2020, while 62% say that in 2021, they experienced more stress and anxiety at work than any year before [1]. Not surprisingly, these challenges spill out of the work domain into employees’ personal lives. Over two-thirds of the employees today say the work hardship impacted their personal lives for the worst [1].
While leaders are waiting in the hope this storm will clear soon, employees feel a pressing need for change to occur today. As we’ve seen in the Great Resignation statistics [2,3,4], many employees today opt for quitting their jobs today instead of waiting for their managers to finally make a change somewhere in the distant future.
Although the pandemic sent our workplaces into a an extended state of disarray, leaders and organizations today need to learn to embrace the turmoil and design and cultivate the post-pandemic workplaces. Moreover, while the Great Resignation is very real, it is also important to remember the bright side: 55% of the employees have a solid intent to remain in their current workplace [11].
Following the steps outlined in this series, leaders who are ready to put in place well-functioning Hybrid cultures—cultures that are inclusive, attentive, personal and flexible—would be in the best position in the following weeks and months to retain, attract and support the ideal employees for their teams.
Resources:
[1] Oracle, 2021: Global Study
[2] McKinsey, 2021: ‘Great Attrition’ or ‘Great Attraction’? The choice is yours
[3] Gallup, July 2021: The ‘Great Resignation’ Is Really the ‘Great Discontent’
[4] PWC, 2021: PwC’s U.S. Remote Work Survey
[5] HRreview, 2014: It costs over £30K to replace a staff member
[6] Gallup, 2019: This Fixable Problem Costs U.S. Businesses $1 Trillion
[7] Accenture, 2020: Getting to Equal 2020 Research Report
[8] Microsoft, 2021: The Work Trend Index
[9] McKinsey, 2020: COVID-19 and the employee experience
[10] HBR, 2021: Beyond burned out
[11] PWC, 2021: The Future of work
[12] McKinsey, 2021: Women in the Workplace
[13] The Guardian, 2020: working mothers are ‘sacrificial lambs’ in coronavirus childcare crisis
[14] Workable survey, 2020: The New World of Work
[15] McKinsey, 2021: It’s time for leaders to get real about hybrid
[16] NBER, 2021: Why Working from Home Will Stick
[17] Bizjournal, 2021: Work from home or a $30K raise? Employees said it wasn’t even close
[18] Prudential, 2021: Increasingly, workers expect pandemic workplace adaptations to stick
[19] Linkedin, 2021: The hybrid work paradox
[20] indeed.com, 2021: Work Happiness
[21] Glint-Linkedin, 2021: Employee Well-Being Report
[22] HBR, 2019: The Value of Belonging at Work
[23] Deloitte, 2020: From comfort to connection to contribution
[24] Gallup, 2021: Employee engagement holds steady first half of 2020
