The pandemic changed how we work – businesses are adjusting to compete for talent
From creating new compensation strategies to offering flexible hours, to increasing 401(k) matches -- the work world is changing.
The past two years have certainly brought upon significant changes in our lives. The pandemic caused so many of us to adjust how we go about doing things, such as shopping, travel, exercise and dining out. The work environment as we previously knew it has also changed in substantive ways.
The changes in how we work have taken many of us by surprise – yet the story is still being written. We’re in a transition and no one knows how the remaining chapters will be written. But one thing is certain – there has been a general shift whereby employees have gained greater leverage in negotiating with their employers in determining compensation, benefits and working arrangements. This has had a profound impact on company culture and how we view relationships between employers and employees. In turn, companies of all sizes are reinventing how they attract, reward and retain employees to remain relevant.
Even prior to the pandemic, companies were tasked with finding new ways to attract and retain talent in a highly competitive and tight labor environment. Post-pandemic, the bar has only been raised. Today, businesses are under pressure to shift their approaches and anticipate new norms to address hiring, culture and compensation. We’re seeing these impacts across wide swaths of businesses, irrespective of factors that usually drew delineations such as geographical location, workforce size or demographics.
The Great Resignation and rising wage environment have plagued nearly every industry. Two years into the pandemic, businesses now have to evolve and revisit their total rewards strategy as they consider their approach to competing for talent. Recent trends in compensation strategies include more frequent increases in base pay, revisions to incentive plan programs and equity plans, as well as alternative approaches such as reducing the work week to 32 hours without reducing pay.
Beyond compensation, there has been a widely-accepted shift to allow for flexible work hours. Employers who are serious about competing for top talent have to consider how they can utilize flexible work schedules, which often allow employees to determine which hours work best for their personal needs and preferences. For example, this may mean working from 6am to noon and then logging on again from 6pm to 8pm to allow time for caregiving responsibilities. When the pandemic first hit, many businesses shifted solely to remote work, which was well received and appreciated by employees. Conversely, while many employees still desire to work remotely, others miss the “office life” camaraderie and culture, especially workers who may be new to the workforce who prefer in-person engagements to build their network and develop key work relationships.
For a myriad of reasons, many companies have pivoted to adopting hybrid work models that allow employees to work remotely on certain days of the week, while visiting the office on other days where they can engage with co-workers and contribute to a culture that can be more difficult to develop online. This model is still in transition and we’re learning as we move forward.
In addition, while worker resignations remain above historical norms, the channels that businesses are exploring to find talent have increased as well. Spurned by flexible scheduling and work environments, as well as new ways of measuring productivity, some have expanded their search for talent to new geographical locations. Given the reduced need to be in a specific office location for a specific time each day, the location of workforces for many businesses has become less relevant. More important is whether or not employees are able to complete their tasks and produce quality work. In turn, these dispersed workforces add further complexity for organizations in navigating various state employment regulations.
Changing work modes and environments present new considerations with onboarding. Some businesses have begun to rethink how to effectively onboard employees who are working on a fully remote basis. This covers everything from teaching the necessary job skills to providing a challenging and rewarding environment that allows employees to fully engage in the organization’s culture.
Some companies have implemented virtual reality training sessions to promote interaction and support an in-person-like feel to the training. Other strategies include orientations in small teams, digital perks to virtually onboard employees, and self-paced training sessions to promote a low-pressure and comfortable environment.
Moreover, many companies are making intentional efforts to improve their virtual organizational culture by adopting new practices, such as virtual group coffee breaks, gathering online for trivia games, planning virtual team lunches, or holding after work virtual team happy hours. All in all, businesses are adopting strategies aimed at mirroring the social aspects of the lifestyle of an office environment where it makes sense.
The holistic well-being of employees has also been a focal topic over the past few years. Many organizations are evaluating programs to support their employees’ mental, physical and financial health. Some are offering increased PTO, or even unlimited PTO, with a requirement to take a minimum number of days off. The role of employee assistance programs (EAPs), online therapy providers, and meditation tools are important resources employers have adopted to help employees address emotional and mental wellness. Fitness stipends are also being offered by some employers for use at gyms or on other physical activities, such as ski weekends with their friends or sports leagues.
Finally, with the uncertainty that was introduced with the pandemic, employees began to rethink their finances and many realized that they were not adequately planning for the future. For that reason, many companies have partnered with financial advisors to help with long-term spending and saving, in addition to increased matches on 401(k) contributions to encourage better personal finance habits.
The ripples from the pandemic continue to impact the work environment in innumerable ways and likely will for the foreseeable future. In turn, businesses are increasingly innovating the paths they pursue to attract, retain and reward talent. The Great Resignation and shift, necessitate that businesses stay vigilant in monitoring workforce trends and remain ahead of the curve to adopt innovative total rewards strategies to attract, motivate and retain top talent. Those who move quickly in adapting to these changes will likely emerge as the most successful over time.
