Future of work — Part 3
Changing employment landscape
Introduction
Culture. Work-life balance. Employee satisfaction. These are the key topics that we always discuss when people leave their companies. Previously, employees typically go when they receive a better offer from a more stable company — the decision making process was easy; the cost-benefit analysis was quick; and the price dictates all (if not majority) of the decision. Now, people leave because of the intangibles, the culture, work-life balance and dissatisfaction with upper management.
People Leave Managers, Not Companies. ~ Victor Lipman[1]
While all these intangibles are yet to be quantified, companies have slowly picked this up and started revolutionary changes in engaging their company personnel. The future of the start-up boom is draining brains with guts from corporations; what remains in the corporate world will be quality employees with brains but with less gut to make good decisions — in short — those with managerial traits.
Feeling the defeat
The change in the employment landscape is not yet totally felt by companies as we’ve barely scratched the surface of the employee exodus (see Part 2 of this article series). Employee exodus will become more and more apparent as companies start losing their employees starting their own business rather than just changing employers. With the breakdown of the market entry barrier, the peak of employee shortage might be felt in the next few decades.
Companies have accepted that employees need more benefits to feel more at home; but benefits cannot compare to fulfilling their dream to start that business and the fleeting image of becoming an entrepreneur. The need to rationalise employee benefits and employee engagement will be crucial for companies to retain top talents comparable to owning a business. This won’t happen quick, but fast enough before companies run out of people.
Changing the employment landscape
New employee benefits includes better work-life schemes such as flexible working and extended holidays. Some companies provide equity participation but mostly limited to top management. To enhance employee retentions, massive costs are being incurred by corporations, but the questions is, how effective are these schemes? From my personal point of view, they’re not. Culture is a big thing now, consultants around the world are investing heavily to quantify its value, though I believe that not all things are meant to be quantified.
Millennials Want Work That Matters ~ Alex Charfen[2]
The new generation is more idealistic and passionate than ever before. Benefits, compensation and work rewards are no longer the key attraction if the work does not effectively create societal change (external impact) and rewards do not connect to the equity of their contribution to the company (internal impact). While more studies will need to be done on how to properly structure an employee relationship that provides equity in compensation (note: equity here does not mean shareholdings in the company), it will be determinant of the future of work. Engaged employees will opt not to leap out of companies if the end point of being in- or out-of-work will result to the same net impact.
New business as usual
This change in the business landscape will take the shape of a parabola that will peak when the start-up market becomes too crowded that individual margins are squeezed from a smaller scale (peak 1) and when employers begin to finally settle their difference with employees (peak 2). The midpoint of these peaks will be the tipping point where the exodus of employees will level down and company brain-drain will stop.
The market will eventually balance-out but with a great change from where we are right now — this would entail excessive financial sacrifices from companies skimpy on employee remuneration and social impact. In the end, market profits might eventually level out and the gap between the small and large companies. Hopefully, the gap between the rich and the poor as well.
Conclusion
The future of work from an employment perspective looks very exciting. Millennials are realising the potential that the market can offer, the skillsets that they have, and the society that they want to change. There will be lots of movements in people from corporations to start-ups, there will be massive societal impact from these start-ups, there would be a lot more humanity in working for corporations. Isn’t humanity the one thing that we lose during the past industrial revolution?
Share your thoughts and insights, this is part 3 of my ‘Future of work’ series, please click here to read part 1 and part 2 of this series. If you liked this article, please do click the heart button below, and of course, thank you for getting up to this point.
Filbert Tsai is an accounting advisor based in the United Kingdom. Professionally, his sector specialisation is power and utilities and provides technical advice to companies and governments. Personally, he is an advocate of start-ups and small businesses, his Facebook page — Ask the Accounting Advisor — provides free business advice to budding entrepreneurs specifically those located in the Philippines.
[1] http://www.forbes.com/sites/victorlipman/2015/08/04/people-leave-managers-not-companies/#30b5134f16f3
[2] http://www.huffingtonpost.com/alex-charfen/millennials-dont-want-to-_b_10050386.html
