Employee power has increased dramatically.
Wage inflation and low unemployment. These are two drivers, but they aren’t working alone.
Ultimately, the power of technology democratizing employee information online has arrived. Employees and Gen Z, especially, know how to use tools to level the field.
Employees are no longer the passive recipient of job offers; they are active participants in shaping ... [+]
Employees hold more power than ever before.
The digital age has ushered in an era where individuals can easily access insights and data about their prospective employers. This has drastically altered the dynamics of the job market.
I talked with both Johnny C. Taylor, Jr., President and CEO of SHRM, and James McQuivey, VP Principal Analyst at Forrester, in an effort to understand key trends in today’s workforce.
"The Future of Work Starts Now,” a Forrester report, highlights four shocks that will have a lasting impact on the future of work in this decade. The fourth shock — employee power will redefine the workforce — is relevant in today’s ever-changing landscape of work. Data and the ability for employees to access and use it has never been greater.
“We feel like these shocks are potentially disruptive, but also sources of energy. They communicate some imperative that can be helpful for an organization looking ahead,” commented McQuivey.
He added, “Employee power can still be positive, cultivating and harnessing that power should be a top priority.”
This is reflected in the 62% of workers in eight countries surveyed who agree with the statement, “I can easily adapt to new tools, processes, and/or values at work.”
LinkedIn and Handshake are just a few of the invaluable resources for job seekers. These websites provide unlimited resources, providing them with a platform to learn about company culture, compensation packages, current employee experiences and so much more.
Transparency in compensation has empowered employees to be able to better advocate for fair pay. Websites like Glassdoor and more industry-specific forums allow employees to see exactly what their peers are earning, helping them gauge whether they are being paid fairly in their current job. They also learn how to leverage themselves in interviews.
Wage inflation, which has recently been driven by a strong job market and growing demand for skilled workers who often can live far away from their physical work headquarters, has placed employees in a more favorable position when it comes to compensation negotiations. As employers compete to attract and retain talent, they are inclined to offer competitive salaries and benefits, thereby putting greater economic power in the hands of the workforce.
In 2022, the federal minimum wage reached an inflation adjusted 66-year low.
Taylor said, “There is a tension that exists between wage inflation and inflation in general and its impact on employees. We believe the battle is between the employer and the employee, but the fact of the matter is, it's between the employee and the consumer. The consumer is not willing to pay anymore. So that's the tension.”
With historically low unemployment rates at 3.9%, employee power has been bolstered. With fewer job seekers and an abundance of job openings, employees have more freedom to explore various opportunities and choose positions that align more with their preferences. Employers are not only competing on compensation, but on workplace culture, flexibility, career advancement opportunities and more, giving employees more leverage than at any point in the past.
Taylor added, “When we were in the middle of the great resignation, there were too few people and there were a lot of jobs. We had a number of employees who would go in, purport to be happy, and were well compensated. They'd either quit, giving the employers no notice, or demand X% increase to keep them from going to the competitor across the street. It really was an indication of employees being incredibly disloyal.”
Another significant change in the digital age is the increasing availability of free online training and educational resources. The demand for coding and analytical positions continues to rise. According to the U.S. Bureau of Labor Statistics, data science and analytics positions are in the top 20 growing positions, and they estimate an increase in demand by over 30% in the next 10 years.
Platforms like Coursera, edX and Khan Academy offer a range of courses, either free or very affordable, which enables individuals to constantly upskill and remain competitive in the job market without the traditional barriers of cost and location.
With these exciting new resources and employees continuing to gain more power, they are increasingly seeking changing policies in the workplace to better accommodate their lifestyles.
After the Covid pandemic in 2020, remote work options and flexible schedules have become the new norm at many companies. Workers are demanding a say in shaping company policies that better fit their needs. This shift in power dynamics has prompted many employers to adapt to meet the expectations of their workforce, creating a more inclusive and accommodating style of work.
In addition to offering increased job skills and life skills training as well as a better lifestyle at work, employers are innovating on employee benefits. According to a new study of american workers by TFL with The Harris Poll, 72% of employees want free or heavily discounted live event tickets yet only 24% currently enjoy this benefit. This speaks to new employee expectations from employers.
In this evolving landscape, employees are no longer the passive recipient of job offers; they are active participants in shaping the career paths for the future of work. Armed with more information, education, and a growing desire for work-life balance, they are pushing for a future of work that aligns more closely with their values and needs.
Will employers continue to innovate around employees emerging needs or continue to risk higher than desired turnover and the associated costs?
