When we think of the “gig economy,” we usually think of platforms like Uber, Deliveroo, Fiverr, or Freelancer.com, which offer users flexible, contingent work on a piece or project basis. Taking a broader view, however, the advent of the gig economy has also had an impact on the way traditional employers think about meeting their talent needs. In our research at Gartner, over the past several years we have seen a number of organizations experiment with new models of hiring, engaging, and assigning workers, inspired by the gig economy. At our ReimagineHR event in London last week, Gartner Practice Leader Thomas Handcock walked HR leaders through several of these models and discussed how they might leverage them in their organizations as well.
Internal Career Marketplaces
Compelling career paths and opportunities to learn and grow within the organization are increasingly important aspects of the employee value proposition, particularly—though by no means exclusively—for Millennial employees. The stereotype of the Millennial job-hopper reflects the notable desire among employees of this generation for a greater variety of experiences in their careers. If your organization can’t offer employees this range of experiences and opportunities to acquire new skills, they are likely to seek them elsewhere: Lack of development opportunities is among the leading drivers of attrition for employees worldwide, Gartner’s Global Talent Monitor data show.
To address this demand for development and variety, innovative employers are making it easier for their workers to find their next job within the company rather than outside it, through internal career marketplaces. These marketplaces, which at companies like HCL Technologies operate through digital platforms, can help employees plot their career paths and understand what internal moves they need to make to reach the position they desire. This allows them to develop their careers more rapidly or grow in new directions more easily without changing employers. For the employer, these internal labor markets offer an effective way to retain and develop high-potential employees. Internal hires for new roles also require less onboarding and come with the benefit of pre-existing institutional knowledge and alignment with the organization’s culture. (Gartner Corporate Leadership Council members can learn more about HCL’s Career Connect portal in our case study.)
In the past three years, the number of US employees willing to go above and beyond their employers’ expectations at work has fallen by 10 percent, from 27 percent in the second quarter of 2015 to 17.8 percent in Q2 of 2018, the latest data from Gartner’s Global Talent Monitor shows. Globally, employees’ confidence in business conditions has fallen for the first time since Q1 of 2016.
One possible driver of employees’ declining levels of discretionary effort is a lack of satisfaction with opportunities to grow and develop in their careers. Nearly 40 percent of employees in the US and globally ranked a lack of future career opportunities as their main source of dissatisfaction in a previous job, displacing compensation as the number-one driver of attrition both in the US and around the world. Over the past few years, we have seen development opportunity grow to be an increasingly critical element of the employee value proposition, both as a driver of attraction for new employees and, in its absence, as a reason for quitting.
“With recent U.S. reports showing little growth year over year in real earnings, workers hope to achieve more satisfaction in their jobs through better titles and opportunities to advance and grow in their current careers,” Brian Kropp, group vice president of Gartner’s HR practice, said in a statement. “To prevent further reduction in workplace effort and to retain top talent, employers should pay closer attention to employee dissatisfaction about the lack of career opportunities, particularly if wage growth remains stagnant.”
“Leading organizations are able to use their employment brand to illustrate why their career opportunities are better than their competitors,” he added. “A company’s EVP directly correlates to employee engagement levels, as workers are more likely to work harder and stay in their current positions if they are highly satisfied with their company’s EVP offerings. Gartner data shows that organizations with high levels of employee engagement report financial outcomes three times higher than firms with lower engagement levels.”
When an employee reveals their intention to quit in favor of a better job at a different organization, it’s not unusual for an employer to try to persuade them to stay by offering them a higher salary. Indeed, such counteroffers are so commonplace that unhappy employees will occasionally solicit outside job offers just to pressure their current employer into giving them a raise. Yet new research from the global staffing firm Robert Half finds that while most US employers make counteroffers to departing employees at least some of the time, they usually fail to retain these employees for the long term.
In an online survey of over 5,500 senior managers in a variety of professional fields across the US, 58 percent said “yes” when asked whether they ever extend counteroffers to employees to keep them from leaving for another job. However, when asked how long employees who accept counteroffers typically remain with the company, the mean response was 1.7 years:
“Counteroffers are typically a knee-jerk reaction to broader staffing issues,” said Paul McDonald, senior executive director for Robert Half. “While they may seem like a quick fix for employers, the solution is often temporary. When employees accept a counteroffer, they will likely quit soon afterward.
Professionals should avoid these offers, McDonald advised. “Money doesn’t solve everything. If you accept a counteroffer, your employer may question your loyalty to the company. And, more importantly, the root causes of why you were looking to leave in the first place may still exist.”
The staffing firm cautions both employers and employees against counteroffers for several reasons, noting that they can cause morale to suffer by sending “the message that threats of leaving are a means of climbing the ladder, rather than outstanding performance and dedication.” An employee retained with a counteroffer will often be distrusted for the remainder of their tenure with the organization, while their performance is unlikely to improve, knowing that the firm was willing to spend money just to keep them around a little longer.
The clearly superior alternative to counteroffers is to proactively identify employees at risk of quitting and give them reasons to stay before they go out looking for a job somewhere else. According to our research at CEB, now Gartner, this means creating compelling career paths for employees, including ample opportunities for learning and professional growth, so they can see a long-term future for themselves as part of your organization.
Stanford University psychology professor Carol Dweck, the pioneer of mindset theory, has long argued that people’s belief in inherent, unchangeable abilities and traits holds them back from personal growth and professional development. If you don’t believe you can become good at something unless you have a natural aptitude for it, her research finds, you’re unlikely to try it, much less succeed at it. In her influential book Mindset: The New Psychology of Success, first published in 2006, Dweck calls this belief the “fixed mindset,” in contrast to a “growth mindset,” which believes that abilities can be developed over time through diligent work.
Recently, Dweck teamed up with her Stanford colleague Greg Walton and Yale University psychologist Paul O’Keefe on a paper that applies the same theoretical framework to passions and interests—things we are often told to find and follow, but which Dweck and her colleagues argue are developed, not discovered. In fact, Dweck and her co-authors told the Atlantic’s Olga Khazan in an article published earlier this month, the suggestion often heard by young people to find what they love to do and then do it for a living may actually be bad advice, as it discourages them from pursuing careers that don’t elicit love at first sight. In other words, it promotes the fixed mindset:
“If passions are things found fully formed, and your job is to look around the world for your passion—it’s a crazy thought,” Walton told me. “It doesn’t reflect the way I or my students experience school, where you go to a class and have a lecture or a conversation, and you think, That’s interesting. It’s through a process of investment and development that you develop an abiding passion in a field.”
As HR leaders know all too well, it’s one thing to give employees a benefit, and quite another to actually get them to use it. This problem often arises around paid leave and flexibility: An organization will offer ample paid vacation, parental leave, and flexible work options, only to find that employees don’t take full advantage of these options, often because their managers, their peers, or the company culture discourages them. Even if the organization’s policy is generous, employees may fear that using their leave entitlement or working flexibly will make them look less dedicated, cause them to miss out on prestigious assignments, or otherwise hold them back in their careers.
Sociologists Lindsey Trimble O’Connor and Erin Cech examined this phenomenon, which they call “flexibility bias,” in two new studies, the findings of which they detailed at the Harvard Business Review last week:
We show that when employees see workplace flexibility bias in their organizations, they are less happy professionally and are more likely to say they will quit their jobs in the near future. Importantly, the effects of this bias aren’t limited to working mothers. Even men who don’t have kids and who have never taken family leave or worked flexibly are harmed when they see flexibility bias in their workplaces.
We also find that perceiving bias against people who work flexibly not only impacts work attitudes but also follows employees home. It increases their experiences with work-life spillover, minor health problems, and depressive symptoms, as well as leads to more absenteeism at work and worse self-rated health and sleep. These effects occur for working moms, dads, and childless women and men alike. The effect holds across age groups and racial and ethnic categories as well. …
Every spring, the talent acquisition software company iCIMS surveys college graduates in the US to gauge their expectations and ambitions as they prepare to enter the workforce. This year’s survey, which SHRM’s Roy Maurer flagged earlier this week, finds that this year’s graduating class is expecting higher starting salaries than their peers in recent years: On average, they expect to earn $54,010 in their first job, slightly more than the class of 2017 and almost $8,000 more than the class of 2016. Last year’s graduates were a bit unrealistic in their pay expectations, despite a tight labor market, with recruiters reporting starting salaries well below grads’ aspirations.
This year, Maurer notes, employers’ pursestrings are looking a little looser:
“This year’s graduates are confident in their ability to find the job they want after graduation, and a well-paying one at that,” said Susan Vitale, chief marketing officer at iCIMS. … The data revealed that recruiters estimate they will pay entry-level employees $56,532 on average this year—a substantial jump of more than $10,000 since last year, when the estimate was $45,361 on average. “For employers, even with an abundance of educated candidates, nearly 80 percent of recruiters are finding filling entry-level positions more challenging than they did three years ago,” Vitale said. “In response, recruiters have upped their game by offering better salaries and benefits, increasing training and development, and enhancing their employee referral programs.”
Maurer also highlights another survey from Yello, which found that a majority of graduates were putting priority on career advancement in their first job searches. Nearly half of respondents to the Yello survey said they were planning to stay with their first employer for more than three years, in another point of evidence against the myth of the millennial job hopper (though these graduates might properly be classified as members of Generation Z). These findings, Yello CEO and co-founder Jason Weingarten told Maurer, suggest that recruiters should be focusing their value propositions for graduates on opportunities for long-term growth and development. Some employers are already responding to the demand these surveys show for higher salaries and clear career paths, such as Morgan Stanley, which recently raised starting pay and accelerated the promotion path for its junior investment bankers.
Jolt, an Israeli professional-development startup with offices in Tel Aviv, New York, and San Francisco, has been experimenting since last year with an innovative employment model meant to give employees a boost in their career development. Instead of open-ended employment contracts, Jolt began offering two-year “chapterships,” after which employees could move on to another organization or find a new role at Jolt.
The idea behind the chaptership is for the two-year stint to be one “chapter” in an employee’s career that prepares them for the next one, based on the understanding that millennials in particular are looking to cultivate themselves through a broad range of experiences early in their careers. With that in mind, rather than attract employees with perks, Jolt invests heavily in training so that employees can learn the skills they for whatever comes next. In a recent interview with Business Insider’s Matt Weinberger, Jolt CEO Roei Deutsch discussed how the experiment has gone thus far and the lessons the company has learned from it:
It turns out that millennial workers often don’t know where they want to end up, career-wise. “People have no idea what they want to do next,” Deutsch told Business Insider in a recent interview. “Therefore, it’s hard for them to prepare for it.” Jolt hasn’t given up on chapterships. But that realization has prompted the company to modify the program to help employees figure out what they want out of life. …