We’ve noticed something big. In our work helping multinationals, start-ups and government bodies across all sorts of industries build better futures, we’ve seen a remarkable shift. Companies are increasingly prioritising innovation efforts not on their customer experience, but on another quickly evolving and increasingly more complex cohort: their employee experience.
Stumbling out of a global pandemic into an unending parade of other world- changing crises, we’re still coming to terms with the fact that the status quo has been shattered. Things will never be the same again for any business, and even the briefest exercise in self-reflection will quickly reveal that organisations cannot rely on the same old tricks when it comes to employee experience. Unconvinced?
How can an employee trust their compensation will rise by enough to get by when average pay has fallen by 2.6% in the face of soaring inflation? This Thought Report explores current employee tensions.
Why would someone feel connected to their company when 85% of senior leaders just assume they’re lazy and unproductive when working remotely? Why should a worker care about going the extra mile when average UK house prices are now an insurmountable seven times the average wage? Is it any wonder only 9% of UK workers are engaged at work?
There’s been a startling transformation in employee relationships with the world of work, and we can see it’s not for the better. A glance at the news recalls the Winter of Discontent of the late 1970s, a period marked by widespread strikes and public disruption. Train drivers, port workers, nurses and postal managers have all striked or are threatening to, as a hostile government promises to impose restrictions. History has a knack for repetition, but this spate of industrial action has been surprising in how much it’s rallied public support; over half of Brits would sympathise with doctors, nurses, firefighters and teachers going on industrial action. Facing no other choice, workers are becoming increasingly frustrated in their relationship with employers.
These responses are unsurprising when the outlook is so bleak. The war in Ukraine, global supply chain issues and low productivity growth have all multiplied to inflate prices to unsustainable levels. In fact, the upcoming year will see the biggest fall in living standards since records began. Faced with further threats of recession, redundancy and financial instability, relationships between employers and employees grow tense. Directives on pay cuts and penny-pinching from leadership in UK and US businesses come with the awkward reality that they remain some of the most unequal developed countries in the world. Telling your employees to strap on a pair, keep calm and carry on when the world goes to hell is a bitter pill to swallow.
All of these dynamics have heightened in a world trying to course correct following the impact of a once-in-a-lifetime (hopefully) pandemic. Hybrid working, though somewhat maligned, is undoubtedly here to stay, and if a business wanted to fully go back to the office, it would risk losing up to 39% of its workforce. Work-life balances are being re-evaluated and reclaimed by employees, and well-being has become a new battleground for recruitment and retention, with more than 60% of employees really valuing the well-being services offered by their employer. Now, crucially, this does not mean a single mental health webinar will help keep employees engaged and alleviate tensions, far from it.
As we’ll discuss in more detail later, the call to action here is to identify and demonstrate a wider, more holistic and nuanced approach to well-being and flexibility that fits the needs of your people. The pandemic has heralded a transformation in employee expectations and requires employers to transform too.
This appearance of a newly empowered, well-being literate workforce has been placed on the shoulders of an emerging Gen Z intake, a seemingly unpredictable and fickle group that has provided countless think-pieces. Much has been written about their cynical attitude towards the world of work, perhaps best exemplified by the ‘anti-work’ movement on Reddit (“You did nothing wrong by asking to be treated right” opines one post), and many of the trends mentioned can be viewed through this generational lens, but it should certainly not be limited to that.
We know, for example, that disputes over flexible working and office mandates can be drawn along gendered lines; male-dominated firms are more likely to insist on workers going back to the office. Rebecca Seal, the author of Solo, a book on remote working, makes a powerful remark:
“The patriarchy wants us all back in the office – of course it does, because the old normal has served white middle class men with power very well for the last 200 years.”
Stirring stuff, putting historic gender inequalities front and centre of the debate on flexibility, autonomy and well-being. Similar tensions arise when considering ethnic minority employees and their status in the workplace. It’s now common knowledge that the pandemic disproportionately impacted minority employees, who were far more likely to be key workers in vulnerable workplaces. Ethnic minority workers are twice as likely to be nurses, security guards or bus drivers, and almost 50% more likely to be waiters and waitresses. Of those who were able to work from home, 58% said their experience was positive compared to how they worked before the pandemic, though a quarter reported that they still experienced harassment while working from home. A comprehensive report by the Trades Union Congress concludes:
“[there is a] clear preference among minority workers for employers to be more flexible – while ensuring that changed working patterns do not exacerbate inequalities.”
Current trends in employee relations with their employers are consequently a product of key macro uncertainties and can manifest through the lens of class, gender, generation and race and much more. These tensions have birthed a plethora of buzzword phenomena: the Great Resignation, the Great Reshuffle, Quiet Quitting, Quiet Firing. The statistical evidence for these grand movements might be disputed, but their importance lies much more in the fact they represent a mass disenfranchisement, a lack of connection, a cliffside drop in engagement and enthusiasm of an organisation’s most valuable superpower: its people.
What can we conclude from this? Singularly, that the new employee experience required of this new era is yet to be pieced together, and observing the landscape, it seems like many companies are trying to solve the wrong puzzle. They’re grappling with how to make hybrid work, fudging together the old Partonesque ‘9-5’ reality with the new ‘work from anywhere’, ‘treat me as an individual’, ‘give me a reason to care’ era. This fusing together of the old and the new in a haphazard way is taking huge amounts of brain power (especially at a senior and line manager level) and creating frustration.
What we need is fresh thinking to solve new problems that have arisen as a result of the emergence of hybrid, not the problem of hybrid itself. We’ve already mastered the latter to some extent, that can be left safely alone. The shift in focus towards employee experience is a matter of survival, a just-in-time response to a complex design challenge that will be different for every organisation, and every employee. There is no one size fits all. There is no silver bullet. It requires innovation. There are four key tensions we’ve identified as prime areas to focus on when conceptualising the new employee experience. Each reflects a battle between combative forces that companies need to balance in order to retain a workforce that expects and deserves more. The fight is on.
The F-Word: Flexibility vs Unity
Everyone is demanding more. More choice in where to work. More say in when they work. A stake in how they work. Flexibility is now a right. But how should companies reconcile this right to freedom and flexibility with the need to create a strong, cohesive and unified team culture? How do they foster a sense of belonging and unity when your people work in their own cadence and preferences?
A simple first step would be to shed the biases associated with hybrid working. Recent research from Microsoft identified a prevalent ‘productivity paranoia’ amongst leadership, with 87% of business leaders finding it difficult to have ‘confidence that employees are being productive’, while an almost equal amount of employees (80%) are confident they are more productive, with many still getting burned out.
There’s a disconnect in expectations from managers and the feelings of their employees that creates fertile ground for distrust. Goldman Sachs CEO, David Soloman infamously said that working from home was an “aberration” that will be reversed as soon as staff can get back to the office.
He changed his tune and introduced a minimum number of days in the office after Goldman’s investment bankers revolted, saying flexibility was more important than pay. Forcing people back to the office does nothing to protect your culture, and risks sabotaging it.
‘I know all of this’, you might be thinking. ‘That’s perfectly fine, people can be flexible with their time, but the office will be the spot to collaborate, to connect with their colleagues and friends, to be more fluidly creative’. Yes, and no. A key piece missing from this neat classification is coordination. If I spend £10 per day to come to a mostly empty office, with half my team at home, and a calendar full of calls I have to take in a quiet room because the open floor is just far too loud, the office becomes a hindrance.
The Employee Experience: Coordinating compelling reasons for people to come back to the office, rather than relying on empty promises of bountiful productivity and boundless creativity becomes a must.
At Magnetic we encourage our teams to coordinate days when they can commune in the office for workshops or ideation sessions, but leave it up to the specific circumstances of the team and their outcomes to guide that decision making. We also introduce company cadences such as our monthly company wide catch up. It’s an opportunity for teams to deliver updates and share learnings on projects, discuss internal initiatives and spend some time together informally. The get-together is held in person at our two offices and connected virtually, allowing everyone to be involved, wherever they are, while creating a palpable reason to venture to the office. Every month will look different to a typical day, uniting an opportunity to strengthen and live our culture, while also allowing flexibility of choice to direct how you’d best like to get involved.
A case study from the Magnetic vaults: Bupa
Bupa Healthcare, the insurance and provision brand with over 80,000 employees globally, has a complex workforce of care workers, dentists, doctors and head office employees. They have resisted implementing an arbitrary and immeasurable set number of days in the office each week or month, and with our help developed a clear decision-making framework to enable everyone to choose where they should work based on their own working preferences, the needs of the business as well as the needs of their immediate team.
Here’s what we did:
- Magnetic interviewing of frontline teams, leaders and managers to understand their needs from a high-level strategic perspective down to tactical daily changes.
- We created the framework using a human-centred design approach. Immersive research made sure that the solution was specifically tailored to Bupa’s culture and existing ways of working.
- We identified changes for leaders and managers to better prepare them for conversations with their teams – trusting teams, setting expectations around rituals, and maintaining a sense of community and belonging, as well as ensuring they themselves felt empowered to role model best practice.
Of course flexibility is in many ways a privilege. There is a class divide emerging. All the headlines in the press over the pandemic about working from home were of course referring to the white collar workers; middle and upper classes who have office jobs and laptops to work from everywhere. The often lesser paid factory and shop floor workers were still servicing our retail and distribution needs throughout COVID and continue to have less choice.
Additionally, as the cost of living crisis worsens and the winter energy bills hit home, will it be cheaper and preferable to commute to take advantage of office facilities, or save money on travel and food by remaining at home?
The Employee Experience: It’s unclear how this might play out, but it will be vital for businesses to keep their fingers on the pulse of how their employees feel, to prevent the emergence of second-class workers unable to fully take advantage of either the benefits of flexible working or a united, flourishing culture.
More than Just a Number: Personalisation vs Parity
While flexibility looks at the question of autonomy around working habits, it is part of a bigger emerging tension concerning personalisation. People are demanding more individuality. ‘Don’t treat me like everyone else. My needs are uniquely different from those of my colleagues.’ Here again, though, companies are pitched into conflict with the basic principles of fairness and consistency. How can management create parity when everyone is calling for personalisation?
Personalisation is, bluntly, the buzziest of buzz words, yet for all its ubiquity in e-commerce, social media, and even the wellness space, what personalisation actually means in the context of the employee experience is still murky.
There seems to be a trend in the literature around the topic that platform-driven data solutions are key to cracking personalisation. If granular data enabled customers to enjoy Amazon recommendations or the algorithms that run Tik-Tok, why can’t it be used to create the best, most bespoke employee experience. It’s a clean idea but does not go far in solving the tensions we’re talking about here. HR systems and apps scrape personalised data and can keep a track of performance or habits, but it would be a stretch to suggest that they singularly meet personalised expectations to the depth or care that employees want, and it does little to tackle the fairness question. How can that data truly ensure that all employees are treated fairly and consistently in line with their differences? How can it avoid dehumanising them as a series of data points?
We’re not being cynical. There are many brilliant examples of fascinating innovations in the personalised EX space. Take something like YuLife’s gamified approach to benefits, for example, or platforms that would be able to curate company news, uncover upskilling opportunities, or tailor re-onboarding experiences for after maternity leave. Incredible stuff, but the point is that they are tools to help facilitate the evolution and reinvention of the employee experience. They are a means to a guiding principle, and that principle, quite simply, is that your employees are your customers.
This quote from Liz Sebag-Montefiore, co- founder of career management specialist 10Eighty summarises the point beautifully:
“think of employees as customers; consider their values, needs and preferences. Consider that an organisation’s ability to make employees more employable will become a point of competitive advantage.”
I’ve hinted at this perspective at the very top of this piece: our clients are pivoting their focus from customers to employees. The desire to use innovation to uncover customer needs, conceptualise solutions and add value to end users remains the same, it’s just the end user that has changed.
A case study from the Magnetic vaults: Mars
Mars is the world’s biggest family owned firm. They have over 140,000 employees and amass annual revenues of over $45bn. They’re now even bigger than Coca-Cola and Unilever – and interestingly they make more money from pet food and pet care than chocolate. The firm asked us to review the employee experience with them during the pandemic, certain that COVID would change the way they worked forever. They weren’t crystal clear on the solution, other than they’d need to think differently, disregard the assumptions of the past and innovate to create an entirely new employee experience.
As with Bupa, we used a human centric approach to build a new model that optimised ways of working, and set the scene for a new era of leadership that would embed a more personalised experience.
Here’s what we did:
- We developed the Mars Future of Work Deployment Kit, a toolkit that was distributed across different regions and segments.
- This did not entail a standardised approach, in fact far from it. The Kit guides teams and managers to rethink the employee experience based on their specific needs, fed by input from every member of the team, while still maintaining a OneMars approach, anchored in the business purpose and Five Principles.
- The Kit identifies four priority areas to rethink: hybrid working, office, travel and meetings. Each priority area represented an opportunity for teams to personalise their approach to work. Perhaps a team might collectively decide to ban meetings past 3pm, or create a ‘remote-by-default’ policy.
- The kit contains all the resources, information, tools, templates and links to help managers and their teams understand how they can adopt new behaviours and embrace new ways of working to activate the change.
Personalisation, therefore, becomes an exercise in radical empathy towards your employees. When viewed in this way, fairness and consistency become integral to the conversation. Serving the needs of one part of the workforce at the expense of another will not work, and be quickly identified as a problem to solve if approaching employee experience from a customer-centric perspective.
Being close to your people’s needs, and doing so consistently, is a difficult task, bound to be riddled with plenty of false-starts, mistakes and u-turns. However, it is through this iterative process of being empathetic to the personal needs of employees that this tension can be balanced.
Employee Experience: Purpose vs Paying the Bill
Given the choice, everyone wants to work for a purposeful employer. Over 80% of graduates consider an employer’s commitment to reducing their environmental impact, diversity and inclusion, and employee mental well-
being when applying for jobs. But pursuing these goals, though admirable and certainly a trend experiencing exponential relevance in the way companies present and market themselves, becomes far trickier when people are fighting to put food on the table. How can businesses embody purpose in an authentic way, while also prioritising the vulnerable financial situations of their people? And can prospective employees continue to prioritise their social conscience when paying their bills becomes an overwhelming driver?
One way to resolve this tension is to make action against the cost of living crisis a part of your purpose around employee experience and care. 83% of large employers are taking action or considering ways to help employees in the face of the cost of living crisis, a recent survey found. For example, the use of gift cards as employee benefits has increased significantly, and John Lewis recently announced that it will offer staff free food over Christmas to help with the crisis.
Living some sort of social purpose is only convincing when backed up by tangible actions, and the cost of living crisis is a perfect opportunity for businesses to show their employees and the wider world that they walk the walk.
This brings into view a more holistic approach to employee experience and well-being. While 90% of firms focus their wellness packages on managing employee mental health, 41% now also deal with social and financial well-being. Financial product provider Cushon’s app allows workers to save and invest their pay in ISAs and other financial instruments. Bupa has rolled out an earned-wage access system, releasing earnings before payday, to its 11,000 care home staff via Wagestream. Since the rollout, 50% have felt more in control of their finances.
As we’ve discussed in the previous tension, workers expect their unique circumstances to be accounted for by richer, more inclusive and personal well-being packages. A quarter of people changed jobs during the pandemic to get more support for their well-being at work. A more socially conscious employer has an opportunity to re-evaluate how they encounter the well-being of their people, and explore ways to do so in a broader way that can weather the storms of financial vulnerability. Being purpose-driven and making sure your employees can live well through a crisis aren’t separate tensions, but part of the same driving force.
What about net zero and sustainability, key driving purposes being pursued by the majority of the global economy? In 2021, 70% of businesses committed to net-zero by 2050. But there’s rumblings of discontent under these moral ambitions. The Parliamentary ‘Net Zero Scrutiny Group’ foolishly projected that net zero goals would leave people ‘colder and poorer’. As businesses become forced to penny-pinch, are we forced to let the planet take a backseat?
Of course not! We’ve been here before. We’re a generation of leaders who learned the lesson of the pandemic: that we can change our fundamentals, overnight. The Great Resignation demonstrated a newly found sense of awareness and demand for purposeful work both at home and in the office. Organisations that responded quickly are now championing flexible and outcome-oriented ways of working. Real transformation is possible, but a clear sense of mission is vital.
The challenge for the next few years will be maintaining our net zero ambitions while living within the current economic situation. Keeping an eye on the ultimate prize, abundance of cheap or free energy universally, can fuel the collective efforts and help spot opportunities for a just and equitable transition.
People are cutting spending and are justifiably worried for their future. But they’re also worried about the health of the planet. It is deeply unlikely that they will begin to care less about businesses’ role in reducing environmental impact, even during a crisis like this, so the onus remains on brave and forward-looking leadership to keep the mission alive, to ensure their employees financial safety while also committing to the betterment of the planet.
Purpose still inspires, and needs to drive business leaders to action and innovative reinvention. Your future employees are betting on it.
A case study from the Magnetic vaults: Legal & General
Legal & General is the UK’s largest provider of individual life insurance products and the biggest manager of corporate pension schemes. Some customers have been with the group for 50 years or more.
Legal & General is an expert in safeguarding people’s financial futures. It wanted to support communities and businesses well into the future by taking innovative action on climate change. While everyone was focused on a global pandemic, we helped the 184-year-old financial institution think ahead about how it could help to tackle climate change.
Here’s what we did:
- We worked with a group-wide team of 100+ people to design and implement an intensive nine-month accelerator programme.
- Using lean and agile methodologies, we generated ten new ideas in the sustainability space, built an internal innovation mindset, and helped all the businesses to collaborate at pace.
- Out of the 10 ideas discussed, developed and tested in the business, two ideas are now propositions that L&G is taking to market and five have been taken back into the business for further incubation.
- The programme created a culture of collaboration and action to help L&G focus on where it puts its trillion-pound financial muscle.
Leading the Way: Inspiring vs Empowering
In many respects, this is the most complex and crucial issue of all. Inspired leaders will motivate, encourage and empathise. But that’s not enough. Modern leaders must also empower and respect the freedom of employees. And there lies the trickiness: how can you be ‘hands-on’ and ‘hands-off’ at the same time?
The balance, at least on the face of it, seems to be off. The idea of ‘quiet quitting’, the notion of doing the bare minimum at work, has hit the zeitgeist with some force, possibly an evolution of a similar Chinese phenomenon of ‘Lying Flat’. One TikToker describes it as ‘not outright quitting your job but…quitting the idea of going above and beyond it’. In a sinister correlation with this apathetic mentality is the reverse concept of ‘quiet firing’, or the action of leaders overloading their employees with additional responsibilities and high demands, precipitating an inevitable quitting.
On one side of this insidious coin is the inability to care, on the other, the toxic behaviour of managers that make the lives of their employees hell. Neither is a good look.
It should be noted that actual statistical evidence for these phenomena does not exist. A Gallup poll of thousands of American workers has found that employee engagement in 2022 was higher than in any year between 2000-2014. ‘What the kids are now calling “quiet quitting” was, in previous and simpler decades, simply known as “having a job” a recent article from the Atlantic summarised. A big sigh of relief then, nothing to worry about.
Not so. Even if the numbers don’t support it, the proliferation of the terms ‘quiet quitting’ and ‘quiet firing’ indicate a deep and negative emotional shift in the workplace.These descriptive labels have caught fire because leadership is failing to inspire people, and an expectation is being set that your boss will be nasty, dictatorial, and un-motivating. Conversely, it becomes a useful catch-all for managers to blame their lazy workers. The scene is set for fruitless, combative relationships between employees and employers. Everyone goes into work in bad faith.
The very existence of quiet quitting and firing should be a call to action to consider a problem that exists and has existed for years, well before and well after any TikTok trend, the problem of compelling and motivating modern leadership. And this conclusion uncovers the first step in tackling it: good leaders should avoid hiding behind misleading phrases when characterising their relationships with their employees.
Saying that your employee is ‘quiet quitting’ is far easier than asking the hard questions. Is my leadership style right for this person? Have I been an open source of communication they can trust? Has my conduct in recent weeks had an impact on my team’s morale? Creating loyalty is tough, but self-reflection can be a blessing.
Hybrid hasn’t helped. When your team is dispersed, how can you adapt your leadership style without carrying over bad habits? A remote worker doesn’t want to be distrusted, constantly surveilled through incessant notifications, any more than they would want to be pestered and micromanaged by their boss in the office.
Leadership in the digital age asks that certain qualities such as deep domain expertise, decisiveness, authority and short-term focus give way to softer skills and a number of agile leadership competencies will be needed to navigate the hybrid workplace; humility, adaptability, purpose, communication and empowerment.
In many ways, the spilling out of work into our homes and personal lives has warranted a more light touch, human perspective on leadership focusing on a more intimate understanding of employee well-being, and a view of productivity based on outcomes, not how long someone is sat by a desk. This is hard, and hasn’t become easier since restrictions were lifted.
Organisations need to consider the importance of capability training and empowering managers to exemplify well-being.
It should not be limited to pointing to the right resources, managers need to be capable of having regular and honest conversations, with deliberation. Managing the day-to-day shouldn’t feel like it requires constant supervision. Leveraging useful tools and technology and experimenting with rituals that work well will enable teams to work with trust and autonomy more effectively.
A case study from the Magnetic vaults: PATRIZIA AG
PATRIZIA AG is one of Europe’s largest real asset investment managers, with more than €56 billion in assets under management across the continent. Our challenge was to help this growing company shift from a pan-European to a global organisation. The goal was to nurture emerging talent, develop their capabilities so they could help the business adapt in the future, and create a shared definition of what good, inspiring leadership looks like.
Here’s what we did:
- Phase one of our three-phase approach began with a deep dive into the needs and challenges of the business, designing a bespoke programme to tackle them. A key part was ensuring the Executive Team understood and could create the right conditions for innovation and design thinking.
- In phase two, we delivered the bespoke programme to the first emerging talent cohort.
- In phase three, we measured and reviewed the success of this first group so that this could become a repeatable model.
- The PATRIZIA Futures Programme successfully launched in Q1 2021, equipping the first group with the tools and techniques they need to create change, break down boundaries and solve problems. This was more than a one-off training programme; it was the start of a new way of working for the company.
We are at a fork in the road when it comes to leaders and their relationships with employers. Current macroeconomic crises have exacerbated worrying trends that reveal a picture of the employee experience that is not fit for function. This might sound scary, terrifying even, but as with all big and scary things, the opportunity for innovation and reinvention are legion. Where should we start?
Well, here’s what we conclude from the discussion above on the employee experience:
- The pandemic has changed the world of work forever. And despite what we might naively hope, there’s no going back.
- The problem we’re trying to solve is not “making hybrid work”. Businesses must create a new employee experience, and have to innovate fast to meet rising expectations.
- We shouldn’t assume the office experience will be great. We need to put in the work to coordinate compelling pull factors that can, at the same time, make our cultures stronger.
- Every organisation is different, and so is every employee. A daunting idea, but one that compels you to empathise with your employees, their needs and values. Treat your people like your customers – with care and consideration.
- Our purposes are long term goals that cannot waver in times of crisis. The questions of social equality and the future of our planet are too big to quit. And they’re what inspires our people.
- The leader of tomorrow is adaptable and empathetic, trusting their people to be their best wherever they are. They care about outcomes delivered, not hours spent. Leadership is dead, long live leadership.
- Creating a brilliant, new, modern, forward looking employee experience is a balancing act, so map out the potential unintended consequences of your decisions, iterate on findings, and don’t be afraid of getting things wrong. That’s how innovation works.
Good luck, your people are counting on you.
Business director Natalia Walters has worked with many organisations transforming their employee experience.
Sound like something you need? Get in touch at firstname.lastname@example.org