Employees are reassessing their workplace priorities — and employers should be ready to adapt if they wish to attract top talent.
Two in five workers are currently considering a career change, according to a survey by Microsoft of 31,000 American workers, with Gallup reporting that one in four of the American workforce feeling disengaged. A record 4 million people quit their jobs in April alone, according to the Labor Department. Called the Great Resignation by some, the American workforce’s shifting landscape is accelerated by employees searching for flexibility, fair wages, and more meaningful work. Fed up with bad bosses, toxic work environments, and lack of opportunities for growth, job seekers are searching for positions more aligned with their values.
A recent Pulse Survey from PwC US, showed that nearly nine in ten (88%) executives surveyed say they are experiencing higher turnover than normal. Turnover and vacancies are putting more pressure on existing teams, delaying strategic planning, and effecting how programs and services are delivered. Over the past few months, many colleagues and potential clients have reached out to us to discuss how they can compete in this new marketplace as they try to retain current team members and attract new talent to vacant roles.
Our team has put together this blog post to share what we’re calling the “3 C’s” every employer needs to prioritize: Compensation, Commute, and Culture.
Criteria #1 – Compensation
How is your compensation package compared to the market? Compared to your competitors?
When it comes to compensation, we think it’s a pretty fair assessment to say that typical nonprofit jobs are not considered to be at the top of market. In some cases, nonprofits are paying wages that come close to qualifying their employees for the same benefits and services that the sector exists to support.
For years, nonprofits have tried to do more with less, and it’s clearly taking a toll on their teams. We observed many nonprofit leaders adopting an unintentional compensation philosophy — underpaying and overworking employees driven by 1) too few general operating resources and 2) scarcity mindsets that prevent them from making necessary investments in their people.
If the above scenario sounds familiar, ask yourself this: Do you know if your organization leads, matches, or lags behind your nonprofit competitors?
It is extremely rare for someone, particularly at a leadership level, to take a job significantly below their economic needs. Underpaying employees isn’t just about what happens today —it has lifelong consequences for an employee’s ability to purchase a home, finance higher education for themselves and their families, pay off debt, increase retirement savings, and the amount of social security they’ll receive.
To retain and attract talented employees, it’s time that your organization set an intentional compensation philosophy, outlining the principles and values for how compensation is set and distributed at your organization. One of our recent clients is a good example of open and transparent philosophy. All of their employees knew that they conducted a compensation analysis every three years, and set cost of living adjustments each year to build into each year’s budget expectations. From that data, they set salaries at ~60% of the geographic area’s median salaries. One year, rather than giving raises, the team discussed reevaluating benefits to be more equitable, and the group decided to prioritize increasing the percentage they covered for employee healthcare from 75% to 100%.
Planning for a competitive compensation philosophy takes time, research, and sometimes quite a bit of budgeting. To understand what’s next, talk to your peers about research they’ve conducted, look at 990s on Guidestar, purchase salary surveys from membership organizations. You’ll want to know about salary, the percentage of health insurance they pay, retirement plans, and bonus opportunities.
Salaries vastly below market will continue to create challenges attracting (and retaining!) great employees.
Criteria #2 – Commute
Do your remote work policies strike the right balance between what employees want and what your organization needs?
Since March 2020, many nonprofit workers have discovered the joys of a commute-free job. A Gallup poll conducted this summer showed approximately 70% of all knowledge workers (e.g., people with standard desk jobs in the nonprofit sector) were working remotely. Now more than 18 months in, employees know exactly how productive (or unproductive) they are working from home.
Flexibility is key when retaining and attracting today’s talent, as evidenced by recent studies. According to the PwC US Pulse Survey, almost a fifth (19%) of all employees would like to be fully remote today even if COVID-19 were no longer a concern. An almost equal number (22%) would like to be mostly in the office (<=1 day remote per week), and 21% say the nature of their work does not allow them to work remotely at all. Others prefer a hybrid work setup, with some days in the office and others remote.
Before the pandemic, American workers’ commutes reached an all-time high. The average worker’s commute is just under 30 minutes, and nearly 10% of workers’ commute lasted more than 60 minutes. In places like the DC region, where most of the Good Insight team is based, housing shortages and lower incomes force more and more people to live further from work, which increases commute times and road congestion. The average worker has gained ~2.5 hours back during their week, it’s no surprise to hear that the ability to maintain flexible work arrangements is among the top priorities of our prospective candidates.
Criteria #3 – Culture
Do people leave bad jobs, or do they leave bad managers?
For some, the meaning of work has improved since the start of the pandemic, and people have found greater balance, more time with their loved ones, and more free time thanks to a remote working environment. For others, the past two years have only highlighted toxic work culture, a lack of boundaries, and negative bosses.
Leaving toxic work environments and poor managers is one of the top reasons we hear as to why people seek new roles. We’ve heard senior leaders brag that their team didn’t miss a beat during the pandemic — seamlessly pivoting to new ways of doing business. While the pivot appeared seamless, the digital intensity of the work day has increased substantially. Increased meetings and communication blurred lines between work days and evenings, as employees struggled to get work done because their day was overrun with meetings. One in five survey respondents say their employer doesn’t care about work-life balance, over 50% feel overworked, and nearly 40% feel exhausted.
To be fair, managing people in a hybrid or fully remote environment presents a number of major challenges. First of all, many nonprofits do not invest in training and ongoing professional development for their managers. The poor results are obvious, and many exit interviews tie them directly to turnover. To prevent this from happening, ask yourself: Has your organization invested in developing your managers’ leadership skills? We recommend checking out training sessions like those offered by The Management Center to make sure your leadership team is prepared to support their colleagues.
Employees and employers are at a crossroad — while employees are critiquing current office culture, employers are concerned that hybrid work environments will erode their office culture. In the PwC US Pulse Survey, over two-thirds of employers say they are concerned about maintaining organizational culture — 36% say it’s a major challenge, and 36% say it’s moderate challenge. The disconnect is clear.
Great office culture is not about an unlimited supply of snacksin the breakroom. Employees want effective communication across departments and rank, opportunities to learn and try new skills, recognition of their achievements, accountability in their teamwork, respect from their leadership, and connections to the meaning and purpose of their organization.
To make workplaces most effective, office culture must be a product of its employees. It cannot be defined top-down, rather, it must be reimagined with the team at the center with their time valued and expertise recognized.
These Priorities Are Just a Starting Point
The Covid-19 pandemic changed the American workforce — arguably forever. As employees spent nearly two years working from home, they found time to reflect on what they want from a working environment, including greater job flexibility, improved pay and benefits, and a positive working environment.
If employers want to adapt to this new workforce, there are three areas where they should dedicate their focus: Compensation, Commutes, and Culture. Even as a nonprofit, your compensation should match the market rate of your competitors. To give your team an improved work-life balance, work on shifting to a permanent remote or hybrid model. Lastly, invest in training for your managerial and leadership teams, developing a positive culture from the ground-up.
To share your experiences in shifting your recruiting strategy throughout the pandemic, reach out to us at email@example.com.