As the third anniversary of the pandemic approaches, it’s hard to overstate how profoundly the outbreak and its aftermath affected the way we work. Analyses of how businesses have evolved over the past few years tend to focus on digital transformation, which makes sense because the pandemic greatly accelerated a preexisting trend toward digitalization across organizations.
From the employers’ perspective, the way companies structure work expectations represents perhaps the most significant change since the Industrial Revolution, accelerating digital transformation on the employee productivity and talent management side. Employee expectations also shifted dramatically, and employers responded by offering greater flexibility… or so they thought. Unit4’s recent Business Future Index report suggests much remains to be done when developing and implementing flexible work policies.
A survey of 3,450 respondents across 12 global markets, the second annual Business Future Index report flagged major concerns about flexible working strategies, revealed disconnects between employer and employee perceptions of progress and highlighted concerns about inconsistent policy implementation that leads to employee attrition. Employers need to address these concerns in order to avoid undermining the goal flexible working policies were designed to achieve. Here’s a closer look at key findings.
Identifying Disconnects that Drive Attrition
The mass experiment in working from home gave employees a new appreciation for flexibility during the workday and freedom from the daily commute, and they don’t want to give those benefits up. But there are downsides too, including a sense of isolation many employees feel when working remotely. Remote workers are susceptible to burnout if the line between home and office is blurred, and those who lack the space to set up a workstation at home have had to adapt in different ways.
Flexible working is an attempt to strike a proper balance with a hybrid approach, providing an office environment where employees can interact and collaborate as well as have the freedom to work remotely. The survey found that while adjusting to remote working took time, the results are largely positive. Overall, 74% said flexible working led to better wellbeing, 73% reported better team collaboration and 72% said new ways of working had a positive effect on the end-user/customer experience.
Interestingly, respondents who are business leaders were more positive about the results than workers. An overwhelming majority of respondents (76%) say flexible working policies need improvement, and 62% reported that the tools they have to support flexible working are inadequate. Less than 20% of respondents said their flexible working policy has no restrictions. And, more worrying for talent managers, 39% said they’ve seen people leave their company for a job that offers more flexibility.
Accelerating Change and Finding the Right Balance
The survey found that by accelerating change, companies became more productive and profitable. Last year, 34% of respondents said they’d exceeded productivity targets and 51% beat profit expectations. This year, more than half are exceeding targets and 60% are overperforming on profits. These results signal a successful adjustment to new ways of working, but employers will have to do better to reach their talent recruiting and retention objectives, which 62% identified as their top priority this year.
The survey revealed specific challenges that are affecting companies’ ability to meet their talent strategies, including struggles with finding staff across a mix of generations and keeping them on board (36%). Additionally, 20% of respondents said their company’s environmental, social, and governance (ESG) credentials aren’t up to standard, and only a quarter of responding organizations have a plan to improve diversity within the business.
The survey also reveals that, contrary to some respondents’ perceptions, 69% of organizations are in a better position to meet ESG goals now. Since a significant number of employees are not getting that message, organizations should consider more transparency on that and other important initiatives to address disconnects in employer-employee perceptions.
Digital transformation and remote working tools can help employers address recruiting and diversity issues, primarily by offering greater flexibility to widen the available talent pool and ensuring managers are consistently offering the flexibility employees demand. To meet recruiting goals and boost diversity initiatives, HR leaders can create plans to address biases related to age, gender and orientation, racial or ethnic groups, casting a wider net to reinvigorate their talent strategy.
The most successful companies are transparent about initiatives like flexible working policies, ESG and diversity objectives, making commitments that link back to the organization’s stated values and providing updates to demonstrate progress. Organizations can also use digital transformation to accelerate talent development, offering training opportunities that fit different learning styles. Investing in employee engagement and development tools in addition to productivity technology can help.
During the first two years of the pandemic, businesses were in survival mode. The Business Future Index report shows that organizations have made significant progress, but to compete effectively for talent in the years ahead, leadership teams will need to revisit policies that were implemented in haste and identify areas where they can improve. Employers who are thoughtful and intentional about creating the post-pandemic workplace now have the opportunity to get flexible working policies right.
Kirsty Graham is VP of Global People Success Operations at Unit4.
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