Over the last several months of my consultancies in Human Resources, I’ve noticed remarkable changes in what employees and companies value most.
For decades, compensation has been the number one driving force behind most job changes, contract negotiations, and strategic reorganizations. This is understandable. For those that work to live (rather than the passionate folks that live for their work), making the most money possible is often a primary goal and can drive our performance to improve year over year.
This is why, when consulting on recruitment across industries, I spend time researching commensurate—and competitive—compensation tiers for my clients. In the past, it was less likely to secure a top quality candidate unless companies were willing to pay a premium.
Through the course of the pandemic, this cardinal “rule” has changed.
For Employees, Cash Is No Longer King
In the beginning of the pandemic, companies had to find efficiencies to create value and stay profitable. Unfortunately, for many, many people, this meant reductions in force, furloughs, or the compressing of full time jobs into part time work. Canada saw millions lose work in the spring of 2020; it was not at all strange to hear of pay cuts at work or to receive word that entire departments must be halved before the end of the month.
These were incredibly trying times and, understandably, many employees—the lucky few that were able to keep their jobs—clung to those positions for dear life. During this period of pervasive instability and precarity, we found it very difficult to convince top candidates to leave their roles for new opportunities. Even with very competitive offers, people were very hesitant to welcome greater instability into their lives. This is where we first started seeing proof that cash, so to speak, was perhaps no longer king.
This trend continued but then eased as vaccines began to roll out. For the right price, candidates were slightly more open to changing jobs. Now, in kind with Canada’s K-Shaped economic recovery, the business landscape is recovering steadily and, paired with the optimism brought on by widespread vaccinations, candidates are more open to change than they have been since February 2020. But the requirements coming up in negotiations are surprising.
What do Employees Want?
So what other kind of “compensation” has unseated monetary compensation as the central tenet of contract negotiations? Flexibility.
It is more important to employees than ever before to have flexibility hard-coded into their contracts. This flexibility takes different forms, encompassing everything from permanent work from home agreements to partial telecommuting or even shorter work weeks.
As we move out of this challenging period, many employees seem to have shifted what they expect from a workplace to prioritize their overall wellbeing and quality of life over that proverbial big cheque. I am very interested to see this trend develop over the coming months as companies continue to jockey for a new, efficient, profitable normal—with a workforce that doesn’t spend as much time in office.
For Employers, New Group Benefits and Internal Support Are Becoming Prevalent
As difficult as the pandemic has been for employees, so too have companies and leadership been tested in their ability to forge a path through uncertain waters. This has manifested itself in so many forms, from the difficult but necessary reductions in force to fundamental reorganizations of entire companies. Businesses have lost sales, revenues, customers, and workforces. Adapting to these trying times have required serious creativity.
Perhaps the greatest challenge for employers has been finding ways to support their workforce but, this time, on limited funds and from a distance. Be it managing a completely remote workforce, or implementing robust safety measures inside the workplace, employers and employees have never had to navigate such a pronounced gap in the course of daily work.
In my consulting, I’ve heard the same complaint from many clients: how can we bring in top quality talent and retain that same talent into the future? Among many points, we discuss compensation and this shift toward flexibility that talent is driving.
This can be difficult to balance. Sometimes monetary compensation, no matter how competitive, is not enough to convince a candidate to stop working from home.
How to Entice a Candidate
What I find to be very interesting, however, is that some candidates may be more open to accepting lower monetary compensation in a new role if the company can demonstrate a material commitment to the wellbeing of its employees.
This manifests in different ways, including more systemic changes like flexible group benefit plans that emphasize accessing online support. Widely adopted Employee Assistance Plans tend to make it easier for employees and their families to access support for issues like mental health—a cause which has proven critical over the last year.
In addition to flexible work, including work from home in varying degrees, and the changes made to group benefit plans, I’ve also seen developments in WFH reimbursements, and with internal bonus structure and performance incentive programs becoming more widespread than before. While such structures are common in industries like sales, I’m also seeing uptake in surprising sectors, including government non-profit.
I suspect these strategies are gaining traction because, through the course of the pandemic, companies had to stay agile and find new efficiencies in order to keep turning profit. These new bonus structures and performance incentive plans—including compensation in the form of both financial remuneration and more flexible working options—are proving useful tools in helping employees stay at that high level of performance even when the crisis is over.
The common goal between employees and employers is to reach an equilibrium that benefits both parties. For decades, cash was king; now, companies have to think about how to make roles conducive to the wellbeing of employees in a more holistic way—a change that is more demand than mere request. But make no mistake: this is no mean feat, given little of our business landscape is unchanged by the pandemic.
