It’s been decades since Johnny Paycheck dropped his fiery anthem about being fed up with work, but lately it’s in fashion again. Among the COOs and CSCOs in our community, nearly all of them have shared the challenges they face, this year, when it comes to employee retention. If traditional office-based functions have it bad (~10-15% annualized turnover rates), then front-line roles are a nightmare (~80-140% annualized attrition rates, in some cases). It’s so extreme that the term “war for talent” is now commonplace.
It’s also a large enough economic phenomenon to have a name: The Great Resignation or the Big Quit. Different surveys place the number of employees looking for a new job at somewhere between 40 and 65%. The more important question beyond the “what” and “how many” is “why.”
Some point to the fact that these large percentages represent those who are “only looking.” They say this is not a Great Resignation, but a Great Reprioritization. Anecdotally, this sounds about right. People are rethinking the rhythms of their daily lives, how they want to spend their time and what they want out of their jobs and careers.
And, at some point if there is significant misalignment … they will leave.
A New Human Deal
Gartner’s HR practice proclaims that we need to reinvent the Employee Value Proposition (EVP) as a new deal: The Human Deal (subscription required). One that recognizes the whole person and is designed to provide an exceptional life experience, with a focus on the feelings and features that match employee needs. These researchers recommend using the following framework to define an expanded set of employee needs that, when addressed, lead to higher rates of satisfaction (+15%), retention and performance.
- Deeper Connections: More than 60% of employees want their organization to understand and share in caring about both their family (68%) and their community (62%). While most organizations focus only on work connections, the best organizations build those deeper connections, while also respecting boundaries.
- Radical Flexibility: All employees, traditional office-based or front line, want more flexibility than their organization currently offers. While most organizations offer some flexibility in terms of when and where work gets done, the best organizations also offer flexibility around who employees work with, what they work on and how much they work. Our research shows a roughly 30% gap between how important employees consider these flexibility options and how often their employer offers them.
- Personal Growth: Most organizations offer employees opportunities to learn skills that will be useful to their job or make them more employable. But more than half of employees feel it’s important for their organization to provide opportunities for not only professional growth, but also personal growth.
- Holistic Well-Being: Delivering holistic well-being is more important than ever, as the boundaries between work and all other aspects of life have become blurred. But while HR organizations are offering resources that promote physical (80%), financial (67%) and emotional (87%) well-being, few employees (nearly 50% less than the average offer rate) are actually using those benefits, so education and incentives are important.
- Shared Purpose: Fifty-three percent of employees want their organization to act on issues they care about — beyond simply making a statement. But in acting on a shared purpose, organizations face tension between activism and representing all perspectives. During our July Leaders Forum Event, I asked Cisco CEO Chuck Robbins how he and his company decide what environmental and social issues to publicly weigh in on. Their solution is a decision matrix to determine when to take a formal position. This cuts through the politics to focus on those issues benefiting humanity and addressing employees’ desire for the company to take a stand.
From the perspective of someone evaluating a new company and role, this expanded EVP feels a bit like Maslow’s Hierarchy of Needs. More basic needs like compensation and other core benefits fall toward the bottom. Psychological needs such as esteem and belonging equate to deeper connection and opportunities for personal growth through expanded roles. Holistic well-being, or feeling cared for as a whole person, also fits into this middle layer. Radical flexibility relates to more control over all the ways the work gets done. When paired with shared purpose, this represents the self-actualization pinnacle of the hierarchy.
An Opportunity to Differentiate
A final thought as you consider what your new EVP will look like. Not everyone is offering this new, expanded proposition. Not even close.
Our latest research shows that well under half of enterprises address these middle and top of the hierarchy types of needs. For front-line roles — currently, our most challenging positions for retention — these benefits are offered even less often.
While significant changes may be required to bring your EVP in line with the most compelling offer in the marketplace, if played right, you might just be exclaiming, “Take this job and love it!” to your new recruits.
VP Distinguished Advisor
Gartner Supply Chain