Bringing economics and employee well-being into harmony 

April 06, 2023

In case you were thinking a declining economy would lessen the talent supply challenge – we don’t see it. We anticipate demand in the labor market will remain higher than usual and employees will continue to reevaluate their relationships with their employers. We’re offering up some strategies that can help employers priortize growth in harmony with their employees’ well-being.

The talent supply shortage is here to stay

Despite recessionary fears and recent reports of layoffs, primarily in the tech sector, the US remains in a labor shortage of about 4 million workers. Compared to pre-pandemic levels, fewer people are participating in the labor market, and there are approximately 2 million fewer immigrant workers due to increased restrictions on immigration and travel. And, over the next 10 years, it is projected that the US workforce will grow at an average annual rate of 0.5% – a slower rate than recent decades. It's not just declines in the number of people participating in the workforce. US workers are working less in the post-pandemic world with recent research showing the largest hours decline in young, educated men.

Typically, in a softening economy, we see employees’ concerns around job security go up, and their commitment to their employer increases. That’s not what we’re seeing in our latest Inside Employees’ Minds research. Although we heard from employees that they are more concerned about job security, they are still considering leaving at record levels – more than one-thifd of employees which is well above historical norms. This is even more pronounced in certain demographics. Nearly half of low income workers say they are considering leaving – and front-line workers, such as those in healthcare and retail are significantly more likely to be considering leaving. Unfortunately, nearly 40% of diverse talent is also more likely to be considering leaving. This data leads us to believe that the great resignation is likely to persist.

Employees are prioritizing well-being

What’s top of mind for employees? Their well-being. Employees are concerned about work life balance and mental health. Employee burnout remains high with half of workers saying they feel exhausted on a typical day. So, how can an employer continue to prioritize growth and their employees’ well-being? Here are three pragmatic strategies that address the needs of the employer and the employee in harmony.

1. Don’t take intensified work for granted—and don’t be afraid to de-intensify

Due to increased economic pressure, fewer employees must do more work, more frequently and in less time. Organizations have gone through tech-fueled transformations, and they’ve added more and more that people have to do, keep up with and track. This is a phenomenon called work intensification, and it looks different in different segments. In blue collar jobs, it’s pack more and ship more, whereas in white-collar positions, it’s endless meetings and emails.

Long work hours and intensified work increase the risk of mental health issues like anxiety and depression. And, intensified work can also leave employees emotionally exhausted and without the time and energy needed to take care of their mental health. Essentially, intensified work environments make workers unwell and also keeps them unwell.

Organizations can address the issue by identifying areas where workforce intensity has crept in and take action. Look at ways to restructure work – don’t leave anything off the table. If you work in a high intensity industry, you may need to rethink your business and resourcing models.

2. Map how your customer experience and your employee experience interact

Organizations have long glorified “customer centricity” and “customer obsession”, which were derived from the old adage “the customer's always right.” This shouldn’t be a bad thing – you want to eliminate frictions that slow or block a customer’s purchase. Happy customers should drive happy organizations. But, customer obsession has been taken too far, creating “boss baby” customers that torment employees. Companies are over-promising remarkable levels of customization and personalization, and the tech that enables this doesn’t always work – leading to angry customers. These angry customers take out their frustrations on employees, who then have to work in more intense environments to address the issues.

Unfortunately, employees who are being subjected to verbal assault are negatively impacted emotionally and psychologically, and these emotional injuries can actually impact them and their mood far beyond their work hours. For those who are already experiencing a condition like anxiety or depression, exposure to these types of incidents can worsen symptoms. Just as employers are responsible for protecting employees from physical harm, they also have a responsibility to protect employees from psychological harm, which includes minimizing incidents of customer abuse.

Organizations map customer experiences, and they map employee experiences - but never the intersection of the two. This is important for both the customer and employee experience. Changes to customer experiences (e.g., promised time of delivery, personalization available) allow organizations to set reasonable customer expectations and can have a major impact on work intensification. It’s the organization's job to sit in the middle and determine which customer experiences will lead to a postivie work environment and a sustainable business model.

3. Model humanism – including self-care

Younger workers are the employees who are most significantly struggling with mental health – while it’s not a top concern for older workers who are often in leadership – so there’s a fundamental disconnect and challenge for leaders in empathizing with the needs of workers. We're hearing from managers that although they might not know how to help, they do want to help.

A great place to start is manager training to raise awareness of mental health issues. Help them identify the signs and the changes in behaviors that indicate that an employee might be dealing with a mental health issue. Beyond that, teach a framework for how to have empathetic and supportive conversations and also how to connect employees who need support with appropriate resources.

There also are several small, practical ways that leaders can model humanism and model self care. Day-to-day examples include: being transparent with teams about taking PTO to rest and recharge; scheduling breaks between meetings for themselves and their team; modeling how to set appropriate boundaries in the workplace with both colleagues and with customers. And, on a larger scale, engage leaders in campaigns to promote mental health and wellbeing resources. Some of the initiatives that can have the biggest impact are leaders talking transparently about mental health, showing some vulnerability by talking about a time that they experienced an issue with depression or anxiety or burnout and and what their experience looked like when they took a step back and reached out for help.

Leaders are still planning for growth

As US leaders brace for a recession, they are still planning for growth – 80% anticipate at least steady growth (3% or more), and 1 in 4 say they are planning for high growth of 10% or more. But, that growth could be stymied by labor shortages. Winning the war for talent will require a new way forward where the needs of the employee (empathy) and the needs of the employer (economics) are in harmony, not opposition.

To learn more about building a happier and healthier workplace check our our webcast replay and pick up a copy of Melissa’s new book “Work Here Now: Think Like a Human and Build a Powerhouse Workplace.”

Melissa Swift
Mary Beth Ryan