The 2020 Worker Revolution Is Over.   Are You Ready For The Fallout?

Part One

We know that Covid-19 has changed the world.  Change is everywhere, including the labor market.  It is now apparent that workers have a different perspective on “the job” and this is affecting employers’ ability to hire staff.  In this two-part series, we discuss how workers view their job in this Post-Worker Revolution and how you can find the best employees in this chaotic labor market while reducing turnover in your company.

 

  When Did We have a Worker Revolution?

Unlike war between countries, the labor revolution was not violent.  It was subtle, silent, and slow to take hold.  It was a revolution because workers changed their view of work, employment, achievement, and security.

Prior to the 1960s, workers held a job to achieve personal and family security, a pre-determined income stream, a source of funding a lifestyle and a method to fund future retirement.  In contrast, workers currently seek a job solely to provide income to meet an immediate, short-term need.  There is little sense of building a career, little planning for retirement (except for modest payroll deductions to the 401k plan), and an elimination of connecting success though job-related accomplishments.

This change is significant because the job no longer meets the employee’s personal needs beyond providing a paycheck for the time spent on the job.  Jobs used to define a major part of our life and out status in the world.  We measured our life’s work through our careers, and our spouse measured the family’s success through our accomplishments and our work-related benefits (extended vacation, higher salary, auto privileges, invitation to company picnics, etc.).

As a society, we have not yet determined if this change will have a positive, negative or neutral impact on our society.  However, we can see that workers no longer connect salary to skill or achievement.  This is one reason for their easy transition from one employer to any other employer willing to pay a higher salary.  Workers do not set job-related goals of achievement, so they want to be paid for “showing up” at work, instead of being paid for their value to the company.

To be sure, there are exceptions to the above description of the Worker Revolution.  For example, most professions still hold long-term values of employer loyalty, life-long career paths, and job-related achievements.  But the trend is there for anyone to review.  The labor market has been changing each decade since the 1960s.  The most visible changes occurred in 2020 as part of the Covid 19 shutdown of the economy, but that was the end of the Revolution, not the cause.

During those early years of the 1960s, we moved from a one-worker family to a two- earner family, along with a rise in the cost of living for families.  Next, we saw a rise in the divorce rate, which meant that we had two-income families who lived in separate homes. Divorced parents found that it cost more to raise a family after a divorce, so the need to stay employed was significant.

Then (circa 1980), we saw a trend in younger workers who postponed marriage and continued to live in their parents’ homes to reduce the need for a steady paycheck.  (Yes, there were other reasons to “live at home,” but self-derived income was a driving factor.)  The decision to “stay home” allowed the younger adults to move freely between working and unemployment and to focus on personal activities.  Younger adults began placing a high priority on personal experiences, such as traveling, engaging in a hobby, and communicating with others through technology (Facebook®, messaging, blogging, etc.).  This shift away from working full-time did not impact business until the older adults (i.e., Baby Boomers) began retiring and the younger generations did not easily fit into the jobs left open by the previous employees.

Then in 2020, the Covid 19 pandemic hit and the country closed for a year.  That event changed the way we worked (remote offices), hours worked (self-defined work schedules), and the sense of security that workers associated with the job (because unemployment began an income producing alternative).  Even the definition of productivity has been suspended in the workplace since 2020.  Current standards make it difficult to measure work output for remote workers and collaborative achievements are eliminated in offices with flex time, periodic closings, and remote offices.  But, other changes have been building throughout this trend.

The Age of the “Enlightened” Worker

Since the 1960s, workers began their shift toward immediate gratification.  That is, workers want to define their jobs; control the work hours; retain the profit from their sales; and suspend the business without notice and take a mini vacation.  Instead of working at traditional jobs defined by the employer, workers are attracted more and more to the gig employment (ride sharing, et. al.), independent contracting (web design, social media content creation, and outsourced bookkeeping), consulting (fashion consultants, business consulting, wedding planners, event specialists, etc.), and home-based businesses (drapery designers, seamstresses, high school and college tutors, drop-ship wholesalers, et.al.).

In 2020, workers’ views of their jobs changed dramatically as a result of the pandemic.  For example, did your company continue paying salaries for staff who were unable to return to work?  Did the company make the transition to remote computers easy or difficult?  Did the employer display care and understanding as employees were allowed to return the office but family responsibilities conflicted with work duties?  Whichever way you answered these questions, workers were noticing.  It became evident that a company is not designed to support the needs of the worker.  Business is designed to create profit and employee benefits are incidental to its main purpose of creating shareholder value.

Something else changed in 2020.  In an unprecedented move in the United States, the government offered unemployment benefits to people who chose not to work (sometimes due to Covid illness, sometimes because unemployment benefits were higher than wages).  The extended unemployment benefits in 2020 caused some workers to transition to public assistance programs and leave the workforce permanently.  In 2022, many of these people have not yet returned to the workforce, which has created the paradox of high unemployment and a many open positions at businesses across the country.

Some of the change in worker attitude is just an extension of the trend that started in the last century (circa 1971) when flextime was first introduced to allow employees to define their own work hours.  Since that time, we have seen workers move to new jobs more frequently (2 ½ years for younger adults and 4 years for middle-aged workers).  As stated above, the trend continues with workers earning a larger portion of their income through Gig jobs, consulting, and home-based services.  Finally, we have seen a shift in workers’ priorities shift from working fulltime in order to build a career to working part-time to pursue hobbies or life experiences.

So, with fifty years (1971-2021) of trends in how employees view their job opportunities, how have you prepared your hiring procedures to find the best staff for your company?  If you are a business owner and you complain and blame workers for their lack of commitment to the workplace, then you are part of the problem.   If you continue to follow the same hiring practices that you leaned before 2020, then you are part of the problem.  And, if you believe that higher salaries will solve your hiring needs, then you are creating a new problem.  This is not an indictment of your resolve, it is a recognition that times have changed, and successful businesses must change.  If you fail to change, you will suffer the consequences of high turnover, low productivity, and worker dissatisfaction.

So, before you continue to read the rest of this article, consider whether you are willing to change in your business to solve your current and future hiring challenges.  The revolution has occurred.  The change is in the past.  The old ways will not return, even if we find a permanent vaccine to solve the pandemic.  If this article is a surprise to you, then please call us immediately at (504) 780-9091.  YOUR BUSINESS NEEDS SERIOUS HELP IMMEDIATELY.

The Next Step

The stage is set, and it is up to you as a business owner to take control of your destiny and define how you hire workers in the future.  How will you change your recruiting efforts, compensation packages, job duties and responsibilities, career paths, partnerships with other organizations?  In Part 2 of “The 2020 Worker Revolution,” we will look at some options for you to consider in how you seek, hire, and respond to the needs of the workers in the 21nd century.

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The 2020 Worker Revolution Is Over.   Are You Ready For The Fallout?

Part Two

In Part One of this series, we defined the Worker Revolution as a significant change in how workers view jobs.  The change was a revolution because it was significant.  Workers changed their view of work, employment, achievement, and security.  These are not inconsequential transformations.

What Changed?

Let’s take a look at some of these significant changes that have occurred through this Worker Revolution of 2020.

  • People are willing to leave their current employer without cause, forethought, or fear of the future. That means that people believe that they cannot fail, even when they have no prospects for employment.  This belief is fueled by the high unemployment rate which has normalized non-working options.  Additionally, there is now a belief that the government will continue to provide an unending safety net of unemployment benefits or other benefits to the unemployed.  Therefore, workers believe that they have options outside of the workplace to obtain recurring income.

When pay is no longer the primary motivator to work, you must offer something of value to the employee beyond the paycheck.  Specifically, you must create job expectations that support that employee’s personal needs.  Then, you must define how your job openings meet those needs better than competing jobs.  For example, if you offer tuition reimbursement, employees who can benefit from that program will apply to your company and also stay with your company for as long as they benefit from that program.  If you offer a job with some travel and allow employees flextime, then employees can schedule work time and also have time for long weekend excursions in this remote location.  Single employees see that they can travel and vacation while earning a salary.   Married employees can vacation with their spouse and/or family on extended weekends

  • Workers see their role at work as resources, not employees. This is the same view that Independent Contractors hold in their approach to offering services to clients.  Therefore, employees have little corporate allegiance, mission alignment, and feelings of co-dependency with their employer.

Brave companies recognize this shift in perspective by transitioning from permanent employees to outsourced contractors.  Employers know that special projects, non-recurring activities, and work products that can be quantified and delegated can be assigned to Independent Contractors.

For example, product research and focus group testing can be outsourced, along with most permanent staff assigned to such activities.  Web development and maintenance also can be outsourced to employees who transition to Independent Contractor status.  As long as the company follows the IRS guidance that defines Independent Contractor status, the option to hire workers as Independent Contractors can benefit both employees and the employer.  So consider which jobs can be converted to Independent Contractor status before you hire your next employee.

  • Younger workers lack experience and maturity, but they are not uneducated. Their lack of experience means that they see the world through a narrow view.  This narrow view inflates a young person’s belief in their value as an employee.  As proof, younger workers often reject low starting salaries.  This rejection is fueled by a sense of equity that is being promoted by politicians, social media, and other media outlets.

The fact is that a worker’s value is based on experience, skill, education, and ability to leverage past success to solve new problems.  If fact, leveraging past success to solve new problems is the best indicator of a worker’s value but it is the most elusive factor.  As a result, many recruiters will not discuss this factor with candidates.  If you offer a career path that shows the employee’s progress each cycle, then employees will tend to stay with your company at least until they feel fully trained.

What’s My Next Step?

In order to keep your business operating, you should establish an ongoing recruiting program.  Once it is created, it is not difficult to maintain.  If you wait until a position is open to start your recruiting efforts, then you have waited too long.  Start your recruiting efforts today for your company if you want candidates available for your next job opening.  The best way to start recruiting is to use social media, in-person networking events, and creating pathways for candidates to contact you about open positions.

Company Website

Use your website to create a recruiting page.  On that page, you can list all job titles, along with the associated duties and responsibilities.  Additionally, use the recruiting page to present reasons why candidates should consider applying to you company for their next job.

Small sized companies offer less bureaucracy and more opportunity for cross training to new positions.  Describe any remote (home) worker positions or arrangements you offer. Be realistic about the work environment.  Office positions may be desirable, but is your office noisy, busy, isolated, or located in a remote location?  Be clear when presenting the strengths of your company but connect those features to specific benefits that staff receive while employed at your company.

In short, sell the job positions that you have created at your company.  Accept resumés continuously and you will have a pool of candidates when new positions become available.  If these candidates are no longer be available when a position opens, they may know someone who will be a good fit for you open positions.

Social Media

Create a business FaceBook page and also a LinkedIn page.  List all open positions within your Company on these resources.  Also, if you are planning to grow, list the positions that you are looking to fill within the next four months.  It takes time to find the best employee, so plan your search early.  Applicants can use the designated email address to send you their resumé along with the job title that they would like to pursue.

In-Person Networking

At most business networking events there are people who want to help you solve your business problems.  You can prepare a list open of positions at your firm on 3” X 5” index cards (including the e-mail that accepts applicant resumés) and pass the cards to everyone you meet at the event.

Part-Time Conversion to Full-Time

Consider hiring a candidate on a part-time basis or as an Independent Contractor before a full-time position is open if that person has a special skill or has outstanding potential.  Smaller companies will complain that the budget does not support extra staff, but the reality is that your company growth is stifled until you add staff.  If you plan to grow, add staff before you initiate your growth plans.  Plan for the cost and obtain a Line of Credit to provide the temporary cash flow until your sales match your new level of productivity.  (Yes, this is risky, but the rewards can be outstanding.)

Other Considerations

Once you have your recruiting tools established, it is time to build the rest of the recruitment structure.  Here are some tips for these other areas.

  • Ask current employees to recommend new candidates. Offer a referral fee to any employee who recommends a candidate who is hired.  Pay the referral fee when the candidate is hired, regardless of that person’s performance in later months.
  • Always use a job title when you post a job opening. The main purpose of the job title is to set the reporting relationships within the company.  Additionally, define the work tasks and responsibilities that you expect the worker to fulfill wherever the job title is posted.  Do not rely on the Job Title to imply the tasks and responsibilities.  Finally, define the timeframe over which a new employee will be fully trained for the full responsibilities of the job.  This last part sets the expectation that the employee will provide limited value in the early weeks and should provide full value at the end of the training period.  This last part is necessary to have a meaningful employee evaluation each cycle.
  • Offer a signing bonus if the candidate is outstanding. The signing bonus is based on successfully completing the training program plus one additional month of satisfactory work.
  • Consider reimbursing the candidate for relocating from another town. Offer a cash reimbursement of 50% upon completion of the candidate’s move and 50% upon six months of satisfactory work history.
  • The on-boarding process are the steps the company takes to ensure that new employees understand the following:
  • Job duties
  • Job responsibilities
  • Work environment (hours, break times, parking arrangements, facility safety protocols, etc.)

A company’s on-boarding process is defined by the needs of the company.  Some companies require a comprehensive on-boarding process, while other companies have an unstructured approach.  Keep in mind that the purpose of the on-boarding process is to establish the work policies and job expectations.  The main value of the on-boarding policy is to define and enforce the company culture for all employees.

There may be some who say that the statement about the value of the on-boarding process is not consistent with the concepts of diversity, equity, and inclusion (DEI) in the workplace.  The fact is that an undefined culture can lead to chaos in the workplace.  You can have a strong work-oriented workplace, a playful and creative culture, an acceptance of alternate lifestyles and religions, and many other aspects to your culture.  But, if you are not clear about your cultural norms and boundaries, then you open your workplace to misinterpretation, confusion, and mistrust.  This leads to lower productivity, higher stress, and higher staff turnover.

  • Establish a career path for each position in your company. For each title, there should be a path for future growth, opportunity for promotion to a new title, and ability to earn a higher wage based on the employee’s increased value to the company.  For example, is there a path for a delivery driver to transition to warehouse supervisor over time?  Can a Human Resource employee transition to other departments, such as public relations, social media content creator, retirement benefits coordinator, etc?
  • Consider creating a bonus program for employees who contribute a new idea that adds permanent value to the company. This can be based on creating a new procedure; recommending a new product or improvement to an existing product; creating an opportunity for the company to partner with another company to expand revenue; or any suggestion that adds permanent value to the company.  These bonus payments may or may not occur in any month or any year.  But once the program is established, it should be promoted regularly.
  • Consider combining sick leave with vacation leave and rebranding the benefit as Paid-Time-Off (PTO). This allows employees to take one day, three days or two weeks off, as the needs arises.  PTO should be pre-approved unless the absence is due to illness or a medical condition.
  • Consider offering time-off to any employee who wants to volunteer for community service. You can set reasonable parameters for this time off, and you can require that the employee provide advance requests for absence to attend a community service program or event.  Also, consider staff participation in local Chambers of Commerce as a community service so that expectations are consistent and clear.  Your employees can be your best Ambassadors to the world through their involvement in local Chambers of Commerce.

We hope this article has been helpful to you.  Please feel free to contact us for a no risk, no commitment conversation about how we may be of service to you in building higher profit, working smarter, and obtaining greater productivity.  Our Contact information is:  Richard Melancon, CPA  (504) 780-9091 at richard@ramcpa.com