The past several years have seen a lot of upheaval. Digital technology, and the subsequent digitalization of business, is reinventing life and work in ways both small and profound.
One of the biggest changes is the increased expectations from customers and employees. Today, the ease of finding the exact product you want, securing a compelling price for it, and getting it — delivered to your home, for free — has moved from a delightful rarity to a daily experience. Across industries and geographies, companies feel pressure to meet higher expectations, often in the face of their own very real cost concerns.
As it turns out, what’s learned as a customer quickly becomes the norm for employees in the workplace.
Employees today have higher expectations of everything from coaching and development opportunities to compensation. For their part, companies also have heightened expectations of employees. For example, they expect them to embrace constant organizational change, become ever more “digitalized,” and take on more responsibility in flat organizational structures.
Based on thousands of conversations that Gartner had with heads of HR around the world in 2017, certain themes and topics emerged repeatedly. These three insights sum up the major ones.
Create an organizational culture that performs: Today’s disruptive workforce trends, such as remote workers, shorter employee tenure, and frequent team structure changes, make culture difficult to manage. Despite most companies now spending more than US $2,000 per employee on culture management activities, just three in 10 HR leaders are confident that their organizations have the culture in place for future business performance.
This is because typical culture management activities rely heavily on changing some aspect of employee behavior. Most companies rely on senior leaders to demonstrate desirable traits and the right culture to employees. But the greatest impact on workplace culture is when senior executives emphasize these qualities in how they manage operations, which very few of them do.
The best approach is for companies to shift from a “people-focused culture” to a “process-focused strategy” to improve workforce culture alignment (WCA). Managers should create a process that helps employees understand the culture, equips them to create and maintain that culture in their day-to-day work, and requires leaders to design processes that support this culture.
Companies that make these shifts and produce a high workforce-culture alignment (WCA), see up to a 9% increase in revenue performance and a 22% increase in employee performance.
Rethink expectations for manager coaching: Organizational structure, performance management, and career expectations have changed how employees work today. The rapid pace of technological change meant that nearly 40% of the skills employees apply on the job were gained within the last year. But this requires managers to take a continuous “always-on” approach to developing employees across a broad range of skills. However, this approach overwhelms managers, causing employee performance to decrease by 8%.
The best type of managers act as “connectors” – they personalize coaching to resonate with employees, power the team for peer development, and partner employees with new contacts to expand their networks and experiences. These “connector” managers improve employee performance by up to 26% and triple the likelihood that their direct reports become high performers.
Organizations that want to empower managers for better team performance without alienating employees, must develop, equip, and enable such managers across the company.
Address pay equity today, not tomorrow: The workplace is becoming more diverse (by 2027 almost 60% of the US labor force will be made up of women and minorities), but progress toward equal pay for equal work has stalled. Most companies have only started addressing pay equity in the past two years, running analyses on an ad hoc basis. But pay gaps are still widening and projections show that the average cost to correct gaps increases by $439,000 annually.
Current ad hoc pay equity initiatives leave organizations open to increased legal, talent, and reputation risks, as well as requiring significant work between wage adjustments. What’s more, there is a 16% drop in intent to stay when employees perceive a pay gap in their organization.
The best organizations address pay equity by integrating assessments with compensation practices, managing employee perceptions through open communication, and proactively preventing pay gaps from recurring throughout the talent lifecycle.