The Impact of the Changing Employee Experience on Organizations

The following sentiment sums up what some might consider a movement and others overdue. “Everyone craves meaning and purpose in life, but few people find such fulfillment at work. Worker’s expectations are rapidly changing. Unfortunately, most companies have not evolved to keep pace with all of these changes.” While these philosophical changes are taking place, society and in turn organizations have some rather interesting changes taking place.

For starters, we have an aging workforce along with four generations in the workplace. Over the years the older workforce has been outsourced, downsized, reengineered, laid off, ranked, all along the way while the organization and its leadership has tried to empower, engage, and now are faced with creating a great workplace experience. This workforce is also causing organizations to feel the impact of labor shortages due to their aging and retiring workforce.

The younger generations have watched this happen sometimes to their parents and so they are entering or in the workplace with changing expectations and looking for different workplace experiences. This might be one of the reasons why they are costing organizations billions of dollars in turnover and engagement. They prefer flexibility and believe this will lead to their happiness at work. These younger generations are also more diverse and value it. This changing diverse generation will be the future senior executives of organizations.

There is also the acceleration of and promise of technological change with Artificial Intelligence (AI), while some can only hope for its positive impact while others fear it will take away jobs. Today there are more mobile devices than there are people on the planet and in some countries than there are bathrooms. Even though if history is any indicator, when the PC came onto the scene it eliminated over 3 million jobs, but also created almost 20 million jobs. So yes, technology and in particular AI will play a bigger role in the future of blended work.

The skills gap in the U.S. is also creating increasing competition among organizations. This is happening in all types of organizations and industries and many are preparing by paying for the needed reskilling. The increasing retiring segment of the workforce, the technological acceleration, along the increasing shortage of skilled workforce, and with changing worker expectations sets this all up for a perfect human capital storm for the workplace.

So, in the midst of all of these changes taking place, what motivates people at work? It has been written and studied over the years. But more research is demonstrating that people are motivated by autonomy - the desire to direct our own lives, mastery - the desire to continually improve at something that matters, and purpose - the desire to do things in service of something larger than ourselves. Instead of focusing on pay as the key way to motivate employees a study by Boston Consulting Group showed that actually the number one thing that people were looking for in their next employer was appreciation for their work, a thank you (2030 Workplace Crisis).

Unfortunately, the more things change, the more they remain the same. A 2021 study by Deloitte asked their executives and their workforce to rank a variety of issues including worker well-being. The executive ranked it 8th, while employees ranked this 3rd (2021 Deloitte Human Capital Trends Report). Unfortunately, there still seems to be a disconnect.

Which might be one of the reasons why it has estimated that 85% of the workforce is disengaged costing companies over $7 trillion in lost productivity, in spite of so many books written and so much money invested in engagement efforts in organizations. This is further exacerbated by work being the 5th cause of death due to the amount of stress in the workplace costing companies over $500 billion in lost workdays.

I would be remiss if I did not highlight the effect of bureaucratic organizations on employees. It has been noted that when bureaucracy is minimized it tends to reduce turnover, increase innovation, strengthen customer service, and bring about above-average returns. If this is proactively addressed, it turns the organization’s approach from focusing on the institution, then individual, to output, to one that prioritizes the individual, then the institution, leading to impact. In turn, making a better workplace experience.

This brings us full circle to where this article began. There is more research and books being written on what employees are looking for. The area of positive psychology has grown over the last few years dramatically compared to the 20th century. Empowerment and engagement are now evolving to the workplace experience. This is leading more organizations to build cultures of belonging, purpose, meaning, happiness, and energy. There is an increase in workers saying that having real meaning at work is essential to happiness and life satisfaction. In turn creating a positive climate and organizational culture through positive practices elevate productivity in organizations.

Leadership is going to be key to these needed organizational transformations. The workplace of today and tomorrow is going to be different. It is going to have to be, because a growing segment of the workforce is going to expect it. To respond to this, organizations are spending plenty of money on leadership development. It is estimated to be in the billions.

This expenditure will need to be complemented with a systemic approach to addressing the needed changes. Because today with these billions of dollars spent on leadership development, we still have a disconnect between leaders and their workforce. 77% of leaders believe they create an engaged environment, while 88% of their employees believe they do not. Only 36% of employees are happy at work and 8% of leaders are seen as effective listeners. The most telling statistic is that 65% of employees would forgo a pay raise to see their boss fired. Obviously, leadership development alone is not making the needed difference. Taking a systemic approach that includes 360 feedback, reward, and accountability, modeled by executive leadership can enable the leadership group to make a shift and change.

When executive leadership along with their boards, start to see the real bottom line impact of a positive workplace experience, maybe then they will make it an imperative that will lead to their quarterly dividends that they are so focused on. That it is not only about profit, but about people and purpose. This can in turn lead to an enhanced employee engagement that is an outcome of employee experience.

The end, or maybe really the beginning