Commentary: Why companies don’t seem to get what employees really want

SINGAPORE: By January next year, workplace regulations should ease and people should be able to return to physical offices.

But what has happened over the last one and a half years will mean that when companies examine and recalibrate a new work model, they may find things will never get back to business as usual.

Our research at EngageRocket found that workforce resilience levels - the employees’ confidence in their company’s future - have dipped between 2020 and 2021 by 17 per cent. Research by Microsoft shows that over four in 10 employees worldwide will consider quitting in 2022.

The reasons behind this trend are complex and cannot be addressed by raising wages or enhancing benefits alone. While compensation remains a determining factor for joining a company, the reasons for staying are much more profound and rooted in human psychology and the fulfilment of fundamental human needs.

On the surface, one would expect that employees would hold onto their current roles during a period of economic turmoil.

However, global labour sentiment indices signal a different trend – the experience of the average employee in the workplace changed overnight due to COVID-19, leading to higher risks of burnout, different work-life balance requirements, and a cognizance of the need for more purposeful work.

All contributing to the "Great Resignation Wave" that affects organisations globally.

To adapt to shifting employee expectations, many organisations responded by dangling the "high-salary carrot" to attract and retain the best talents. But studies have proven the law of diminishing marginal utility of income at play; indicating there is a ceiling to how much satisfaction people derive from salary hikes.

WHY MONEY ALONE IS NOT ENOUGH

Even in the best of circumstances, high performers in many companies are likely to feel a sense of stagnation (unless there is proactive intervention from the employer), and this is only exacerbated by the effects of the pandemic.

For nearly two years, employees are forced to adapt to the changing work context. Different aspects of an employee’s experience are now more important than others. For example, office proximity used to be a big consideration for many workers, but now investment in technology and streamlined processes are more important.

The situational change caused by the pandemic has opened up new possibilities of work that most of us didn’t think possible before.

This rapid change in the working context has also led to a major shift in employee expectations - and not all organisations are aware of how to respond or what to offer to make them stay.

In the past, if an employee wanted to quit or move, leaders would rely on improving perks, benefits, and compensation as the primary instrument for retaining employees. Except that those things are not the only things that employees want anymore.

If this type of organisational response continues, it’s unlikely The Great Resignation Wave will abate anytime soon. What then are the underlying reasons for this employer-employee disconnect?

GAP IN EXPECTATIONS AND THE SCIENCE OF LISTENING

In a large, complex, and now increasingly remote organisational setup, it is almost impossible to get into the granular details of an individual employee’s needs, wants, and aspirations.

This is because most setups use conventional feedback tools like annual surveys or an informal “DIY” approach to troubleshoot the issues.

The problem with this is authentic feedback can fall through the cracks. A good example is the typical exit interview most companies conduct.

Companies which don’t conduct regular employee surveys tend to rely on exit interviews to understand the reason behind the employee resignation. But exit interviews are rarely reliable due to two things.

First, employees tend to be biased as they likely have mixed feelings about their departure - they might not feel invested in the company’s future anymore or they’re not being honest so they don’t “burn bridges”.

Second, the data captured is only from a point in time, and fails to reflect the employee’s full experience, especially the crucial months leading up to the exit decision.

That is why the concept of "continuous listening" must be embedded within the organisation - that is actively gathering employee feedback at multiple points in their journey. And for leaving employees, helps to collect sentiment data before they resign.

This pattern recognition over time means companies can take meaningful action early to prevent voluntary resignation from other employees in the future.

But for this to happen, there must first be trust, without which no amount of talking will help - and this applies both ways.

If employees fear there may be negative repercussions (such as impacting appraisals or promotions) if they voice their dissatisfaction or opinion (for example, asking for a four-day work week), and conversely, if employees themselves are reluctant to be open, then honest expression is not going to happen.

DEALING WITH COGNITIVE BIASES

We come across instances where cognitive biases can blind leaders to what exactly is going on, even if they try to listen to their staff.

There are three key types of biases, based on numerous behavioural economics studies:

Inside view bias – where the leader or manager’s judgement is clouded by their close familiarity with the organisation and many years of tenure. Typically, this manifests as a feeling that “in my company, employees have always prioritised …”

Recency bias – when leaders use a recent event, a fresh memory to influence future inferences. If one employee has quit because they got a more competitive offer, the company may tend to double down on the wage and benefits component only in their retention strategy.

Fundamental attribution error – this is when an observed truth may be mistaken for a universal fact. For example, a company may erroneously assume that all developers are open to working on weekends for the right pay without causing attrition risk.

All three biases share a common theme – there is a dissonance between how employees feel (and what they might even express), and what leaders choose to hear, understand, and act on.

Fostering communications between leaders and employees must be the number one priority for employers as offices reopen and employees go through yet another shift in their workplace experience.

While random informal feedback collection may work for small teams, we have found that an organised Voice of the Employee (VoE) programme is a good tool to truly understand what people are thinking and feeling. To encourage open and honest communication, feedback collection needs to be anonymised so employees are assured they won’t face any repercussions for voicing their opinions.

THE WAY FORWARD

The forecasted HR trends in 2022, is a good resource and it throws up several measures organisations can take to start improving work culture and employee experience in their workplaces.

At the top of their list if they want to avoid talent walking out is to adopt a proper listening strategy that is not a pencil-pushing exercise and to take meaningful follow-up actions as a result.

The reality is, monitoring and improving employee experience has gone from a “good-to-have” to a “must-have” for companies hoping to win the war for talent. Not only does it provide detailed information on employee needs, but it also creates a safe environment where employees feel heard.

The data collected can then be processed so organisations can prioritise at-risk employee segments and take necessary actions. For example, according to EngageRocket’s 2021 State of Employee Experience in Singapore found that caregivers are at higher risk of burnout compared to other cohorts, so managers prioritise this group.

Aside from implementing a listening strategy, companies would also benefit from more frequent manager check-ins than the HR mandated annual reviews. Research shows that monthly or quarterly performance reviews focused on professional growth are up to 1.5 times more effective at retaining employees than the annual approach. 

By encouraging employees to frequently check in with their managers, organisations can detect early signs of disengagement and take corrective measures quickly. It also ensures that the action is relevant to the employee’s immediate context and not several weeks or months too late.

Finally, organisations need to make a conscious attempt to shift the organisational culture away from “transactional exchanges”. To do that, they must step up and adapt by having a clear focus on empathy, communication skills, and trust-building, all in the backdrop of a fast-evolving digital and hybrid work environment.

As offices reopen, the economy is revitalised, and new opportunities emerge, top talents across industries are at risk of attrition. Companies need to work doubly hard and start prioritising the employee experience.

Wages, benefits, future progression are important but ultimately, it comes down to how well companies can listen to their employees and how they can execute meaningful follow-up actions.

Leong Chee Tung is CEO and Co-founder of EngageRocket, APAC’s fastest-growing people analytics provider.