Job security is a thing of the past. In the past 15 years, I was laid off once when the company I worked for during the 2008 crisis went bankrupt. Then, a few years ago, the organization I was working for was acquired, and my role was redundant. They might have eventually found another role for me in the new company, but I could not handle the pressure of not knowing and ran. And the third time, I was told I was laid off due to a change in the company location strategy and my job moving to a lower-cost location.
I have always been and still am a top performer, and my skills, expertise and impact on the respective organizations are widely recognized. It was never about me. And in none of those cases was there anything I could do to prevent the outcome.
The companies were in different industries, different sizes and different strategic goals. When I joined them, there was nothing to warn me that I may not be there for long.
In short, there was nothing that was in my control in all those situations. And feeling helpless and out of control is not a nice feeling to have.
But that’s how a lot of employees feel these days. Even if they have not been laid off themselves, they have witnessed layoffs in their company or in their social circle. And that has affected them and inevitably changed their perspective on work and their relationships with their employer.
In the era of layoffs, employees’ perspectives of professional loyalty, engagement and even career have changed. Maybe irreversibly.
Unfortunately, it seems that companies have not caught the drift yet. Their expectations, policies, and cultures are still founded on the assumption of longevity in the employer-employee relationship, which they can no longer guarantee.
And unless they make a significant shift, companies’ cultures and practices will become increasingly irrelevant to employees, making motivating and retaining them nearly impossible.
And the first thing they need to do is to:
Redefine employee loyalty and engagement
Employer-employee relationships have always been based on reciprocity.
Back in the days of our parents (or grandparents for the younger readers), employees exchanged their time and effort for compensation and security. In those times, loyalty from both sides was highly valued, and employees often spent their whole professional lives with one or two employers.
Then time sped up, companies started aiming for faster growth and ever-increasing financial results. They discovered the importance of high employee engagement and making efforts to retain their talent. On the other hand, employees began thinking about things like careers and maximizing their potential.
The terms of the exchange with their employers changed. Now they are trading their high performance and engagement with long-term organizational goals for career growth, performance-based incentives and yes, job security.
The narrative created by companies was that if you perform well and show engagement, you will receive rewards and recognition and will ultimately succeed. And your job will be safe.
Now, the narrative is the same, but the realities have changed. Companies can no longer promise employees that they will not lose their jobs if they perform well. However, they still expect employees to be loyal and to believe and support the long-term company strategy and goals. Even if those long-term strategies might eventually leave them unemployed (like with me and the company’s location strategy).
The reciprocity in the employee-employer relationship has been broken, with companies expecting more from employees than they give back. If you cannot offer long-term job security, you can’t really expect long-term employee loyalty and engagement.
So it is time to change the narrative. And redefine our concept of employee loyalty and engagement.
Did you know that one of the most prominent employee engagement surveys, Great Place to Work, measures employee engagement with the question, “How likely are you to still work in this company 2 years now?” Who in their right mind can answer this question with “very likely” if they have witnessed all the layoffs around them in the past couple of years?
And responding with “Not very likely” does not mean that this person is not performing exceptionally in this moment in time and that they are not putting 100% efforts in achieving the company goals. It just means that they do not have clarity of their long-term future in the company. And that is entirely normal.
So, instead of focusing on whether employees plan to be ours forever, why don’t we start measuring their engagement by their behaviors and actions in the now? After all, we are well aware that we may not need them next year.
If we shift our perspective that way, engaged employees will be the ones who work hard, have healthy relationships with their colleagues and leadership, and have current personal goals and values that align with the current goals and values of the organization.
And who are those employees – the ones who feel that there is reciprocity in their relationship with their employer and they are getting as much as they are giving.
And to ensure that they have such employees, organizations need to
Rethink their reward and recognition strategies.
Job insecurity combined with Gen Z’s need for quick gratification means that long-term retention tools like stock options that vest in five years or promotion in four do not work anymore.
Instead, employers should focus their reward and development strategies on achieving specific short-term milestones that help further the company’s agenda.
Bonuses and financial incentives could be much more tailored to the specific employees and the impact they have on the company’s outcomes. Career growth does not need to be just that one big promotion four years from now. It could be realized through incremental growth in responsibilities, stretch assignments and internal and external learning opportunities.
Sounds logical, right? So why do companies not do it already?
Because it’s hard. Personalizing the rewards and growth opportunities to each employee’s needs and achievements would require for companies to completely change their mindset, policies, processes, systems and budgets.
Very few companies are willing to put in that level of effort. But they better start thinking about it because what they are currently doing has already stopped working. And very soon, they will not be able to attract and retain the talent they need to achieve their goals.
Hire the “right” people
Companies have always put a lot of money and time into attracting and hiring the right talent. And that, of course, needs to continue. However, the definition of ‘right’ talent will likely need to change as well.
First, they need to stop frowning at job hopping and disqualifying job applicants based only on their tenure at past companies. At least have the conversation and evaluate the candidate’s overall job fit. During the interview, it might turn out that the reason for the frequent job changes lies in layoffs. And even if it doesn’t, and the person really prefers to change their jobs often, maybe the role they are applying for will become obsolete in a couple of years. So this candidate actually may be a better fit than someone who changes jobs less often and they may need to lay off when the role is no longer needed.
Long-term loyalty to a company should become less of a hiring factor than the skills and ability to make an impact on the company goals in the short and mid-term.
Second, companies need to hire people who have transferable skills and are able to learn fast. This way, they could easily move them to another role if their current one is no longer needed.
But to be able to do that, they need to:
Know their people
Have you seen those companies that lay off hundreds of people and then open new positions and start hiring again? It’s not because they are evil. They have genuinely tried to fill those roles internally instead of laying off their employees, but they couldn’t. Because they don’t really know their employees.
Companies learn a lot about their candidates during the recruitment and selection process. But for most companies, this information falls through the cracks after the employee is hired. And while they know that the person is suitable for the role they are currently performing, they lose track of all the other skills the employee possesses.
Few companies have comprehensive and up-to-date talent profiles of their employees, which encompass all their skills, expertise and aspirations. And this is a serious issue both at times when difficult decisions about layoffs need to be made and when a company wants to provide career growth for their employees.
Not knowing their talent well leaves companies blind to the most valuable resources they have – their people. Thus they miss opportunities to retain high performers, to save employees from layoffs and to utilize all of their employees’ talents. And through those missed opportunities, they ultimately lose a lot of money.
But neither hiring the right people or knowing their employees will be sufficient if companies don’t have
Workforce strategies that are actually strategic
Companies can no longer afford workforce strategies of the type: “Let’s hire the people that we need now, and we will worry about what to do with them a year from now when the time comes.” This costs them a lot of money in severance payments, ruins their reputations, and devastates people’s lives. And is very unfair to employees. But employees are not stupid; they are starting to notice it and will trust such companies less and less.
Instead, organizations should look at their organizational strategy and goals and, based on it, honestly assess their staffing needs for a few years ahead. Once they have done this assessment, they should come up with the most appropriate staffing mix for achieving those goals.
If they currently need some roles that may not be necessary in the future, they may be better suited to fill them with fixed-term employees or contingent labor. They can always convert them to permanent employees if needed, but in the meantime, they will save themselves a lot of financial and reputational damage for both themselves and their employees.
So it turns out that, like everything else in the employee-employer relationships, the keys are respect and transparency. Companies need to face the fact that we are living in the era of layoffs and adjust their culture, rewards and workforce strategies accordingly. So that employees can continue to trust them.