Shifting worker-employer relationships

by Madelein
Shifting worker-employer relationships

The pandemic and societal pressures accelerated the worker-employer relationship’s evolution beyond anyone’s anticipation. How might it further evolve amid the uncertainties of a disrupted world?

What’s less clear, is what form it will take moving forward. How will the worker-employer relationship shift as employers and workers push and pull each other in the pursuit of their various needs? Will organisations continue to embrace their role as social enterprises? Will workers trust in their business to remain steadfast, or will they look for leadership outside of the organisational walls?

The “2021 Global Human Capital Trends: Special Report” by Deloitte investigates how the worker-employer relationship is disrupted. This special report also explores one set of possible answers to the central question: How might the worker-employer relationship evolve to meet the opportunities and challenges of the post-Covid-19 world?

We have compiled a summary of the report’s key findings below, and have inserted some key extracts and figures.

Covid-19: Testing the limits of the worker-employer relationship

The pandemic strained and tested the worker-employer relationship. Employers were called upon to support workers’ health, livelihoods and dignity to an unprecedented degree, and their success – or failure – to do so came under unprecedented scrutiny. The result was that developments that might have played out over a period of many years were compressed into a matter of months.

A total of 89% of workers in a February 2021 global study by Harvard Business Review said that their work life was getting worse, 85% said that their well-being declined and 56% said that their job demands had increased.

And while the worker-employer relationship may be top of mind for both workers and executives, they may not be aligned on how it will evolve.

Talent supply and government impact: Key contexts for the worker-employer relationship
Understanding how the worker-employer relationship could evolve begins with identifying which factors will have the greatest influence on the relationship moving forward. Deloitte used focus groups to get executives’ perspectives on what these factors could be, discussing possibilities such as economic growth, the use of technology in business, unexpected disasters, climate change and social divides in access to resources such as education, wealth and health.

But beyond the rest, the two factors that stood out as being the most influential on the future of the worker-employer relationship in the research was talent supply and government impact.

Talent supply

Talent supply is already a key concern and growing in importance. The pandemic exacerbated growing digital, education and skilling divides around the globe – putting further strain on talent supply considerations and trends. In 2020, 80% of job losses were among the lowest quarter of wage earners, many of whom work in hard-hit sectors such as leisure and hospitality, government and education.

And a new study estimates that 100 million global low-wage workers will need to find a different occupation by 2030. At the same time, the demand for skilled workers is growing, with seven in ten employers globally saying they are struggling to find workers with the right mix of technical skills and human capabilities.

Government impact

How will government action affect workers’ and employers’ roles in the new world of work? In our research for this report, government regulation rose to the top as the most influential external factor behind an organisation’s and its workforce’s ability to thrive. The type, consistency, speed and effectiveness of government action could all influence the worker-employer relationship.

For instance, government effectiveness in driving social change, such as policies about worker representation or protection, or actions to address concerns such as climate change or social injustice, could shift workers’ expectations of their employers to attend to such issues. Public policies and regulations protecting jobs and wages, enhancing social safety nets and benefits, improving access to education or investing in reskilling, could decrease workers’ reliance on their employers for these things.

And public policies that restrict or create an additional burden on organisations seeking to create work in new geographies, access talent across borders or leverage alternative workforce segments could influence workforce planning and talent strategies.

Using these two factors – talent supply and government impact – to explore four potential futures that illustrate how the world of work and the worker-employer relationship could evolve these are:

  1. Work as fashion

In a “work as fashion” future, employers are in constant motion as they chase worker sentiments, competitor actions and marketplace dynamics. The worker-employer relationship is REACTIVE: Employers feel compelled to respond in the moment to workers’ expressed preferences, and to competitor moves, without connecting these actions to a sustainable workforce strategy.

  1. War between talent

In a “war between talent” future, workers compete for limited jobs due to an oversupply of talent. The worker-employer relationship is IMPERSONAL: Employers view workers as interchangeable and easily replaceable, and workers are more concerned with competing with each other for jobs than with the quality of their relationships with their employers.

  1. Work is work

In a “work is work” future, workers and employers view organisational responsibility and personal and social fulfilment as largely separate domains. The worker-employer relationship is PROFESSIONAL: Each depends on the other to fulfil work-related needs, but both expect that workers will find meaning and purpose largely outside of work.

  1. Purpose unleashed

In a “purpose unleashed” future, purpose is the dominant force driving the relationship between workers and employers. The worker-employer relationship is COMMUNAL: Both workers and employers see a shared purpose as the foundation of their relationship, viewing it as the most important tie that binds them together.

According to the report, these four futures are illustrative, not exhaustive. They can be either positive or negative, depending on the choices that workers and employers make. Organisations will likely find themselves in some combination of these futures, depending on the needs and expectations of their workforce, industry, regions and the communities in which they operate. The increased complexity of the world requires us to abandon “one-size-fits-all” views in lieu of a more nuanced approach and understanding.

Setting direction in a world of uncertain futures

The worker-employer relationship has no single future, only a multitude of possibilities. But examining the question in light of what could happen can help us better chart a course towards our chosen destination – the place where we ultimately want the worker-employer relationship to go. Without a clear course and a point on the horizon to aim for, strategies for the evolution of the worker-employer relationship risk running in circles.

It’s hard to think about choosing a future destination when the here and now are so tumultuous. Yet it’s essential to look up from in-the-trees tactical concerns and the pressures of short-term survival to consider broader priorities and a longer timeframe.

What principles can help guide employers toward that vision?

As part of the “2021 Global Human Capital Trends Report”, Deloitte called on organisations to embed the following three attributes into their organisational DNA:
• Purpose.
• Potential.
• Perspective.

It’s now time to embed these attributes into the human aspects of work, into all the ways that employers and workers engage with each other:
• What would the worker-employer relationship be like at an organisation that imbues every aspect of work with purpose and meaning every day?
• How would it look at an organisation that designs and organises work to maximise the human potential for thinking, creating and doing?
• What kind of relationship could foster a perspective that embraces a future orientation – asking not just how to optimise for today, but how to create value tomorrow, integrating our work, lives and communities?

Again, there is no single answer to these questions. Purpose, potential and perspective may manifest in many different ways in different futures. But at a deeper level, all these manifestations share many common threads.

Building a worker-employer relationship that empowers an organisation to thrive depends first and foremost on a clear, compelling vision for differentiating and sustaining that relationship. In a moment of choice and consequence, setting a bold destination for all organisational strategies – business, workforce and social – is vital. The challenge before us now is to choose, with empathy and a deep understanding of what is possible, where that destination lies on both the current horizon and the next, and to navigate towards it with a steady hand.

Our sincere thanks and appreciation to Deloitte for the use of the information contained in this article. For the full report and detailed findings, visit https://www2.deloitte.com/us/en/insights/focus/human-capital-trends/2021/the-evolving-employer-employee-relationship.html.

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