Originally published at pwc.com. PwC is a DiversityInc Hall of Fame company.
Employees have had more than a year to reflect on their needs and aspirations, and many want a new model of work. Our latest US Pulse Survey found that 65% of employees are looking for a new job. We also talked to executives, 88% of whom told us they are seeing higher turnover than normal.
For the most part, executives have a good grasp of why their employees are looking elsewhere. But when it comes to offering incentives that employees want most, they’re falling short in two key areas: benefits and compensation. This employer-employee tension compounds the challenge facing companies eager to redesign work. Rising inflation, the surging delta variant and tension over vaccines, masks and shifting return-to-work plans are creating extra uncertainty.
How can executives balance their strategic and operational goals with shifting employee expectations? Companies have a tremendous opportunity to transform work. By redesigning work, you can help drive growth, better anticipate uncertainty and create a workplace that top talent is eager to join. To successfully execute your plans, you’ll need to figure out your hybrid work model, make changes to processes and operating models, revamp strategic planning, and, most importantly, attract and retain top talent.
Our survey offers insights into the changes executives are making as they redesign work and how they are centering many of those decisions around people.
Other top findings:
1. Concerns vary across the C-suite as executives evaluate the impact of employee turnover. Nearly nine in ten (88%) executives we surveyed say their company is experiencing higher turnover than normal. That’s not surprising, given that the Job Openings and Labor Turnover Statistics (JOLTS) data from the US Bureau of Labor Statistics currently shows quit rates above pre-pandemic levels and continuing to rise. As of June 2021, the highest quit rates (which indicate voluntary turnover) are occurring in accommodation and food services (5.7%), leisure and hospitality (5.3%) and retail trade (4.1%). Other sectors are much lower, including education services (1.4%, not shown in the graph).
Inside organizations, executives are experiencing the ongoing labor market churn in different ways. CMOs, for example, are acutely feeling the negative impact of staff shortages on customer experience, with 40% citing it as a major issue. CHROs say retaining employees will be their number-one priority over the next three to six months. CFOs are split. Thirty-six percent say they’re very concerned about the turnover remaining high indefinitely and weighing on revenue growth. Another 45%, however, are somewhat concerned about turnover and its impact on growth, but they also expect it to return to pre-pandemic levels more quickly. Whether or not quit rates stabilize soon, employee expectations will likely continue to evolve in the foreseeable future, forcing executives to reconsider everything from where and how work gets done to new ways to make employees feel valued, included and motivated.
2. For employees looking for new opportunities, schedule flexibility, expanded benefits and compensation are top incentives. Companies on hiring sprees are refining employee value propositions, focusing above all on corporate purpose and leadership. While those are important, they should expect candidates to negotiate hard for what they now see as table stakes: competitive packages and perks coupled with flexibility and expanded benefits such as career growth and upskilling opportunities. Some may also see job changes as an opportunity to close pay gaps. Women are more likely than men to be seeking higher salaries (46% versus 34%). And more Hispanic and Black employees are looking (82% and 67%, respectively) compared to white/non-Hispanics (57%).
3. Good news for leaders: Efforts during the pandemic to build trust and step up on social issues are showing results with employees. Almost equal proportions of executives and employees agree that there is a high level of trust between leaders and employees—77% and 72% agree (34% and 35% strongly). Meanwhile, 79% of executives and 77% of employees say their leaders are inclusive (37% and 35% strongly agree). Leaders aren’t resting on their laurels, though, as inclusion continues to top the list of business priorities, especially as companies navigate hybrid work.
4. The challenge ahead lies in addressing culture, as companies define their work environments. Many executives are excited to return to an in-person environment, but an all in-person workplace is no longer the norm. The challenge for leaders: bringing out the best aspects of face-to-face teaming for all employees, whether in the office or not. A third of executives (33%) will have a mixed model, with some in-person full-time, some hybrid and some fully remote. They cite corporate culture as the biggest challenge to making hybrid work successful—36% say it’s a major challenge, and 36% say it’s a moderate challenge.
To view PwC’s 2021 US Pulse Survey, click here.