By Chris Swan, Managing Director, TRANSEARCH USA
Workers are riding a tidal wave of opportunities, the likes of which we haven't seen in decades, if ever before.
This situation, which follows the pandemic, inflation, and the Great Resignation, with 33 million Americans leaving their roles, may be described as the Great Negotiation, coined by NPR's Planet Money.
"It's pretty standard to see a swell of workers quitting their jobs for greener pastures when the job market is strong, and there are lots of shiny opportunities available," Planet Money opined. "Bargaining power has shifted in (workers') favor."
Data from LinkedIn shows twice as many jobs available on the platform compared to a year ago. With the bevy of job openings, people have the power to negotiate everything from tantalizing perks and work-life balance to greater flexibility and more meaning in the work they do.
Indeed, workers have the relatively rare chance to ask for a lot more. I say rare because, for nearly 40 years, competition amongst people in the labor force has been fierce. Low-wage workers have been pitted against low-wage countries as companies built an offshore workforce. Baby Boomers put off retirement, adding labor to the supply, and private-sector unions have melted away in the new service economy. Businesses have held the upper hand in setting compensation and benefits.
Today, millions of women who bear the brunt of childcare responsibilities and remain sidelined from the workforce, Baby Boomers are finally starting to retire for real. Most importantly, the growth in the economy and the demand for workers is at the highest level in decades. Wealth abounds, and immigration has been curtailed. Employees find themselves in the strongest negotiating position in memory.
Now that the playing field has been tilted in the opposite direction, here are three steps companies can take to get the renegotiation right and bring supply and demand into better balance.
Although it was initially a seismic shift, the transformation to remote or hybrid workforces is now entrenched for numerous organizations. As a result, companies have had to reimagine all kinds of rules, policies, communications, and the fundamentals of their culture. This has propelled multi-billion-dollar businesses to establish a key executive position devoted to remote/hybrid workforces.
At LinkedIn last year, veteran HR executive Shannon Hardy was given a brand-new job title and commensurate responsibilities - Vice President of Flexible Work. Hardy explained in Raconteur magazine that her job entails "supporting managers in leading their hybrid teams effectively, updating the company's talent policies and ensuring that hybrid working is equitable for all," Hardy related.
"We're constantly listening, learning, and adapting our approach to improve our employees' experience."
Facebook, Automattic, GitLab, and Basecamp have also constituted a similar role. It may make more sense for smaller firms to have a leadership working group for remote/hybrid employees or a specialized consultant who is an expert in developing virtual organizations.
The key is naming someone or a group of people responsible for building a solid process for remote work, from the digital infrastructure to the various operational, HR, and compliance policies, to helping to cultivate a robust remote culture.
Flexible work options are a must-have to stay competitive and attract and retain the best talent. A study of HR professionals cited in Entrepreneur magazine showed 60% believe organizations will lose employees if they do not transition to a hybrid, fully remote, or remote-first culture. As a specific example, in a recent securities filing, tech giant Intel stated, "Competitors for technical talent increasingly seek to hire our employees, and the increased availability of work-from-home arrangements…has both intensified and expanded competition."
This issue is more complex than simply negotiating where and when remote workers perform their roles. We recommend delving into the 'how.' Map out the tasks remote employees need to do, how their work fits into the bigger company picture, and how it is evaluated. Get into the scope of tasks and responsibilities, the logistics – especially with different time zones - and monitor objectives.
The companies that will thrive in this new employment landscape smartly embrace the new realities, transitioning to the models that best serve their customers, employees, culture, and financial success. The demand for the BEST advisors and experts has never been greater, and holding on to the good ones can pay dividends.
During the pandemic, many workers chose to improve their lives by moving either temporarily or permanently to different states, cities, and in even cases, countries. Reversing this process is likely impossible, so employers need to adapt to the new employment landscape. One of the biggest challenges has been compliance with local, state, and in some cases, international laws for employees that are now geographically dispersed.
Laws pertaining to everything from worker's compensation, taxes, and payment forms vary substantially. It's imperative to align workplace policies with city, state, country, and international labor laws, together with industry regulations. Bottom line – companies and employees need to consult with tax experts.
The trend of hiring international remote workers as independent contractors has been on the upswing for years and was buoyed by Covid. Like the nuances with taxes, laws vary from country to country defining independent contractors differently. Factors such as the contractor's job responsibilities, work expectations, and other requirements must be legally defined as 'contract work' for the worker to qualify as a contractor.
Why does this matter? For example, some countries have laws restricting contract workers from using company resources and tools to perform their work. Legal issues may arise if these 'worker 'classification' details 'aren't sorted out. So again, ' 'it's pivotal for people and businesses to confer with legal experts.
As the Great Renegotiation continues, current trends will persist, evolve, and reverse. While workers are in the driver's seat right now, times can change rapidly. The best advice for employees and employers is to be informed about the job market, respond as necessary to the competitive pressures, and focus on building a great corporate culture that will weather the ever-challenging business environment and stand the test of time.
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