Employers that want to recruit and retain employees this year need to focus on meeting their needs and solving their biggest concerns. Many leaders are completely disconnected from the struggles that employees have because they aren’t experiencing the same hardships. Employees are losing sleep over their decline in satisfaction at work and their compensation, benefits and career needs haven’t been met. When employees’ needs aren’t met, they don’t have the adequate mental and emotional bandwidth to be a highly productive contributor to your organization.
Employees are still feeling the effects of global crisis, including the Covid-19 pandemic, a war in Europe, inflation, political and social unrest, and layoffs. As a result of these larger trends, employees are now much more focused on their well-being and their achievement at work. Mercer’s 2022 Inside Employees’ Minds study found that 36 percent of employees considering leaving their employers because of their financial insecurity from inflation, declining sense of work life balance, and continued burnout and concerns with their mental health. If your company can help employees meet these needs, you will gain a productive, highly committed workforce — and forge a path to a truly differentiated employer value proposition.
There are three big employee needs covered in the study that employers should address this year if they want to ensure their workforce is engaged, satisfied and productive.
1. Financial security and retirement benefits
Inflation has been driving the cost of living up and even though it has leveled off recently, high prices on goods could prolong. While wages have increased, they aren’t keeping up with inflation, which has caused employees to be worried that they don’t have financial security, nor will be able to save money for retirement, since their income is mostly used to pay for food, transportation, and rent. As a result, the report found that employees biggest concern is covering their monthly expenses, followed by their ability to retire, both of which were ranked much lower at ninth and fifth in their 2021 study.
The demographic that has been most affected are low wage earners who make less than $60,000 each year. One-third of them have taken on additional work to supplement their income. With more work, comes more stress, less work-life balance and potentially lower quality of work and productivity too. We’ve seen remote workers take on multiple jobs at the same time to make ends meet over the past year as well. As for high income earners making more than $200,000 a year, an entire 70 percent of them are financially stressed due to market volatility and inflation. A separate study by LendingClub found that nearly half of six-figure earners are living paycheck to paycheck.
With all workers impacted in one way or another, employers need a multi-pronged strategy that addresses the financial health of their workforces. First, they need to prioritize living wages for their employees so they feel confident they can cover their monthly expenses, allowing them to focus on their work without chronic worrying. Second, they need to focus on affordable healthcare since it’s getting more costly, with an expected 5.6 percent increase this year. Third, they need to invest and support holistic financial well-being, which addresses the needs of employees at every stage of life including providing access to financial planners and a financial education. Finally, employers need to assist with retirement readiness by communicating more regularly about their plans and teaching spending management.
2. Health and well-being
Over the past three years, employees have been paying much more attention to their basic health needs. With the increase in remote and hybrid work, employees are spending more time working, which has led to burnout and higher quit rates. Like Mercer’s report in 2021, burnout and work-life balance remain their third biggest concern. These mental health concerns are more apparent for employees who are under the age of 35-years-old, are in the LGBTQ+ community or women.
The tradeoff with remote work is burnout, which some employees can handle better than others. The study found that two-thirds of employees say they are empowered, valued, connected, and stimulated, yet half are also exhausted on the typical workday. It goes to show that even employees who strive for positive workplace outcomes, can ultimately become burnout and less productive.
Just like with financial well-being, employers need a holistic approach when it comes to employee healthcare. They need to both manage the ongoing increases in health plan costs, while ensuring that employees can afford quality health care. To accomplish this, employers can control costs without shifting the burden to employees by steering employees to the highest-quality and lowest-cost care options, enhancing clinical management of members with specific conditions or needing high-cost specialty drugs, and focusing on virtual care offerings.
3. Work-life balance
Employees continue to seek flexibility even though more employers have demanded that they return to the office part-time or even full-time. Office occupancy across 10 major US cities crossed 50.4 percent of pre-pandemic levels for the first time since early 2020 reports Kastle Systems. Still, employees prefer remote and hybrid working because it allows them to better manage their work lives. The Mercer report found that hybrid employees say they have more satisfaction with their employer, a greater sense of belonging to their team, more satisfaction with compensation and benefits, and more confidence that their career goals can be met at the organization.
Right now there’s an inherent conflict and gap between employees who want the option to work remote, and employers who want them back in their offices. Employers who want to retain their workforces should try to minimize the gap between the flexibility they are currently offering, and the flexibility employees want. Aside from knowledge workers, who can telecommute, frontline employees report wanting more time-based flexibility. We found this in our previous research as well. Employers need to build in more agile scheduling and resourcing systems to make this a reality.
Given the retention challenges front-line employers are facing, flexibility is a low-cost solution that can be leveraged to attract and retain employees. Finally, I suggest that employers, and their leaders, get better at examining employee workloads. The report found that a reduced workload is the best way to support their well-being so it’s important to look at resourcing, drive efficiencies so people can do things faster, and prioritize the work that needs to get done.
The time is now
These three employee needs must be met by employers now because we’ve reached an inflection point in the workplace. With all the change we’re experiencing economically, politically, and socially, employees are in desperate need of support by their employers. Employees are not living to work anymore – they’re working to live. For some, especially front-line and low-income employees, that means financial survival. Others, who have their basic financial needs met, are placing increased importance on their lives outside of work.
Where does that leave employers? Organizations certainly can’t return to pre-pandemic mindsets. Instead, employers need to embrace a new contract with employees: the lifestyle contract, where people can find sustainable healthy experiences at work.
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