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By 2030, we will face a global worker shortage of 85 million people, according to the 2023 Workforce Trends ManPower Group report. That means there will be major shifts in the power balance between employees and employers. Traditional employers with a command and control leadership style will have less power as power shifts more to employees.

With increased power over employees, expectations are shifting. Consider these statistics:

  • 31% of current workers would take another role next month if it offered a better blend of work and lifestyle.
  • 68% of Gen Z workers are not satisfied with their organization’s progress in creating a diverse and inclusive work environment and 56% would not accept a role without diverse leadership.
  • More workers think that the ability to collaborate (83%), solve problems (82%) and be trustworthy (82%) are more important to do their job well than simply being a high producer (76%).
  • 57% of employees are already pursuing training outside of work because company training programs don’t teach them relevant skills.
  • 75% of investors say companies should address ESG (environmental, social and governance) issues, even if doing so reduces short-term profitability (diversity, equity and inclusion fit in the “S”).

To address these growing macro trends, organizations need to:

  • Model and reinforce workplace flexibility — especially senior leadership).
  • Objectively measure employee performance (a.k.a. behaviors + results).
  • Proactively address ESG social issues before it is mandated.

1. Model and reinforce workplace flexibility

Considering nearly one-third of workers would leave their roles immediately for better work-life integration, this signals a growing expectation for authentic flexibility. No longer a nice to have, it is a must-have for workers. More traditional cultures have been slow to change, expecting employees to return to the status quo post-pandemic. Rather than retreat to past notions of workplace expectations, this is an opportunity to shift to meet shifting employee expectations. People are looking to leaders to not just say flexibility is important but to model it through their own actions. As leaders work remotely and take time off, employees feel safer doing so as well.

Here are some unconventional ways leadership can promote flexibility (Note: For front-line workers, virtual work may not be a possibility and flexibility can be more constrained):

  • Host a workplace offsite at a remote location where employees can bring their families, mixing work and life in a relaxed environment.
  • Set expectations for in-person days in the office environment. Consider maybe one or two designated days per week that your employees are expected to be physically present, and working from home the remainder of the days.
  • Be clear about holiday observances cross-culturally. Be cognizant of holiday celebrations and out-of-office obligations.
  • Talk to team members about their travel interests or family visits, encouraging them to work from other locations if they can and want to during less busy times.

2. Objectively measure employee performance

Subjective criteria invite bias into the performance management process. More often, inclusive behavior is just as important as the ability to get results. If your employees are getting results with exclusionary behavior, they need to be held accountable for these behaviors as well — trust, collaboration and problem-solving skills. Increasingly, toxic workplace behavior is a key reason for employees self-selecting out organizations. If you tolerate toxic behavior because the person is getting results, it’s the same as saying toxic workplace behavior is acceptable.

Consider adding competencies to the performance management process to ensure people are not only getting the results but they’re being held accountable for their behavior. Competencies like communication, leadership, empathy and vulnerability are highly correlated with healthy workplace cultures. What gets measured and gets done. When people are held accountable for their behavior, the culture shifts.

3. Proactively address ESG social issues

Europe’s expected mandate of ESG reporting will affect any organization that does significant business in Europe in 2024. Rather than having to react once enacted, it’s important to proactively prepare. Because diversity, equity and inclusion (DEI) are a part of the social component of ESG, organizations will be expected to report on DEI activities and representation numbers. Investors, customers and employees alike are asking how organizations are contributing to positive social change. As the power continues to shift to employees, expect this question to be asked more often, realizing future consumers and employees are voting with their dollars and employment decisions. People want to work with organizations that are creating social good.

A Fortune 25 client of ours in the financial services industry realized this shift in employee power. Instead of maintaining the status quo, they developed a program that responded to changing employee needs. They built a nine-month Men as Allies program with a curriculum to support learning on flexibility, inclusive leadership skills and how to effectively mentor and sponsor people different from themselves. The result was a boost in year-over-year membership growth of 30% for women and 40% for men as allies. Promotion rates and retention for women in the program increased as well.

With a growing disconnect in workplace expectations, it’s important that organizations realize that the workplace needs to change, not the employees. By modeling flexibility, measuring employee performance and anticipating ESG expectations, we can meet employees where they are and create more inclusive workplaces where all people feel seen, heard and feel like they belong.

    Julie Kratz is the Founder and Chief Engagement Officer of Next Pivot Point. She is a highly-acclaimed TEDx speaker and inclusive leadership trainer who led teams and produced results in corporate America. After experiencing many career “pivot points” of her own, she started her own speaking business with the goal of helping leaders be more inclusive. Promoting diversity, inclusion, and allyship in the workplace, Julie helps organizations foster more inclusive environments. She is a frequent keynote speaker, podcast host, and executive coach. She holds an MBA from the Kelley School of Business at Indiana University, is a Certified Master Coach, and is a certified unconscious bias trainer. Her books include Pivot Point: How to Build a Winning Career Game Plan, ONE: How Male Allies Support Women for Gender Equality and Lead Like an Ally: A Journey Through Corporate America with Strategies to Facilitate Inclusion, her children’s book Little Allies, and Allyship in Action: 10 Strategies for Living Inclusively.

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