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Building Sustainable Productivity in Your Workforce

Unless you are a famous Shark Tank Investor, Companies and their leaders should pay attention to several current trends in the U.S. labor market. Technological changes, demographics, and the overall economic landscape drive these trends. Here are a few trends to keep in mind:

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  1. Remote work: The COVID-19 pandemic has accelerated the trend toward remote work, as companies have had to adapt to social distancing guidelines and remote work policies. Many workers have become accustomed to working from home and may expect this option to continue after the pandemic ends. Companies and their leaders should pay attention to this trend and consider how they can offer flexible work arrangements to attract and retain top talent.

  2. Skill gaps: The demand for specific skills is outpacing the supply of workers with those skills, leading to a talent gap in specific industries. This talent gap can make it difficult for companies to find and retain qualified workers. Companies and their leaders should pay attention to this trend and invest in training and development programs to upskill their workforce.

  3. Generational diversity: The U.S. labor market is becoming increasingly diverse in age, with baby boomers retiring and younger generations entering the workforce. This generational diversity can bring new perspectives and ideas to the workplace, but it can also create challenges in terms of communication and management styles. Companies and their leaders should pay attention to this trend and consider how to create a workplace culture that values and respects generational diversity.

  4. Employee engagement has become increasingly important in the U.S. labor market as employees seek fulfilling work that aligns with their values. Companies and their leaders should pay attention to this trend and create a workplace culture that fosters engagement, well-being, and sustainability.

  5. Automation: Advances in technology are making it possible to automate many tasks and processes, which can lead to cost savings and improved efficiency. However, automation can also lead to job displacement and a need for workers to upskill or reskill. Companies and their leaders should pay attention to this trend and consider how they can balance the benefits of automation with the need to support their workforce.

  6. The "gig economy" is another significant trend in the U.S. labor market that significantly impacts the workforce. Companies can consider leveraging the gig economy by hiring freelancers for short-term projects or using online platforms to find specialized talent. However, companies should also be aware of the potential downsides of the gig economy and ensure that their workforce policies are equitable and sustainable for all employees, including those who may work in the gig economy.
     

As a result of these latest trends, opportunities for workers and the struggle by employers to attract and retain workers are causing unprecedented times with the U.S. labor force.

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The Great Resignation

50.5 million U.S. workers quit their jobs in 2022! The quit rate beat the previous record set in 2021 at 47.8 million. Moreover, 40% of employees are considering leaving their positions within the next three to six months in 2022. Even with the deteriorating economy towards the end of 2022, the quit rate remained well above historical averages. 

 

Today’s employees who quit their jobs are not leaving one job to take another. Workers are leaving the labor force. 

altogether. In July 2022, the Bureau of Labor Statistics reported that the U.S economy had five million more job openings than unemployed workers. In other words, there are 1.8 job openings for every unemployed worker.

 

One factor contributing to the lack of workers is the estimated 2.5 to 3.6 million fewer workers participating in the labor market. COVID-19 deaths, pandemic induced early retirements and gig-work opportunities all play a key role in this critical gap.

 

Employees have never had so many opportunities to change jobs in modern history. Remote work, the gig economy, and the sophisticated, high-tech workforce are factors changing the employer-employee relationship. McKinsey reports that the 17% rise in attrition appears to be a harbinger of a significant shift in employee behavior; organizations will ignore it at their peril.

However, this quit trend started long before COVID-19 arrived. Quit rates exceeded the historical average in 2015 as the economy fully recovered from the Great Resignation. According to Gallup, nearly eight out of ten readers of this post will experience some form of burnout in their current job. 838M global workers (25%) reporting feeling burned out often or frequently (McKinsey Health Institute, 2022). In 2022, two years into the COVID-19 pandemic, the U.S. burnout rate hit an all-time high of 28%.

 

Burnout is costly for individuals and organizations. The American Psychology Association (APA) estimated that workplace stress costs the U.S. economy more than $500B and 550M in lost workdays yearly (Abrams, 2022). However, the human toll resulting from burnout-induced poor physical and mental health appeared even more costly and harder to quantify. Maslach and Leiter (2008) reported a strong correlation between participants who experienced burnout and physical ailments such as headaches, muscle tension, hypertension, an increase in cold/flu episodes, and sleep disturbances. Other studies correlated burnout with more severe health conditions such as obesity, heart disease, and the increased risk of stroke (Long Working Hours Increasing Deaths From Heart Disease and Stroke: WHO, ILO, 2021). Hence, Gallup (2020) found that employees who reported high levels of burnout were 63% more likely to use sick leave and 23% more likely to visit the emergency room. Michelsen (2021) estimated that organizations paid $738B in mental health-related expenses annually in 2021.

Quiet Quitting and Disengagement

However, there is another more subtle phenomenon a Gen Z Tik Tok influencer popularized called “quiet quitting” that employers increasingly struggle to manage. Gallup estimates that 50% meet the definition of a quiet quitter or an employee so disengaged and unmotivated they risk termination if the boss evaluates their performance.

 

The notion of quiet quitting isn’t new. Organizational psychologists Maslach and Leiter (2008) called this phenomenon “presenteeism,” which occurs when employees report for work but only give minimal effort while on the job. Presenteeism was different but related to absenteeism which occurred when employees took a sick day to miss work due to burnout. 19% of workers surveyed in 2022 reported performing so poorly that their boss would terminate their employment.

 

However, today’s workforce has taken disengagement to another level. Harter (2022) reported that more and more disengaged workers are employed by two or three companies simultaneously. The quiet quitters gave just enough effort to stay below management's radar as they collected multiple paychecks for as long as possible. Perhaps that is why Michelsen (2021) found that presenteeism or quiet quitting costs organizations 4.1 times more than actual absenteeism (paid sick or vacation days due to burnout).

 

The Hidden Costs of Brain Drain

“Brain drain,” or the loss of productive and highly-capable employees, was a high indirect cost. The McKinsey Health Institute, 2022 estimated that burnout-related turnover costs an organization 1.5 to 2 times an employee’s annual salary. This higher cost of attrition could result from high-performing, burned-out employees leaving, who were six times more likely to quit their job within the next three to six months. McKinsey Health Institute (2022) found that highly productive, adaptable, and resilient employees were 60% more likely to leave the organization than employees with low adaptability and resiliency levels. Intuitively, a loss of highly productive and capable employees would lead to a loss of productivity, innovation, and creativity and further amplify the hidden cost of burnout due to presenteeism or quiet quitting.

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Helicopter Parenting has created a less adaptable and less resilient workforce.

Younger Millennials and Gen Z Expectations

Millennials and Gen Z workers have different attitudes and expectations of employers than previous generations. They prioritize work-life balance, social responsibility, and personal fulfillment, and they expect their employers to share and promote these values. This shift in attitudes and expectations is driving the need for companies to embrace sustainable productivity, which recognizes the importance of employee well-being, work-life balance, and personal growth and development.

The parenting style of Millennials and Gen Z workers has also influenced their attitudes and expectations of employers. These workers were often raised by "helicopter parents" who were highly involved in their children's lives and emphasized the importance of personal fulfillment and happiness. Parents prevented their children from struggling and learning how to overcome adversity. This has led to a workforce prioritizing personal fulfillment and well-being and expecting their employers to do the same. It has also led to these generational workers struggling to cope with stress and burnout more than their older peers.

Generational Difference in Coping with Stress and Burnout

The COVID-19 pandemic brought overload, loneliness, increased stress levels, and blurring of work and personal life boundaries to everyone, significantly increasing employee burnout. However, Millennials and Gen Z appeared to be less hardy when dealing with the cumulative stressors of the post-pandemic era. Abrams (2022) compared responses between Generation X (ages 43-56), Millennials (ages 25 to 42), and Gen Z employees (ages 18 to 24) and found millennial parents reported struggling with feelings of being overwhelmed and decision fatigue compared to their Gen X counterparts.

Likewise, millennial and Gen Z respondents reported the highest stress levels, the most difficulty with day-to-day decisions, and the lowest ability to cope with life’s pressures and stress among the surveyed generations (Abrams, 2022). 45% of millennials experienced burnout on the job compared to the U.S. average of 28%. Further, 40% did not find fulfillment in their current role (Moore, 2022). 50% struggled with declining self-efficacy compared to older generations, and only 47% felt they earned enough money (Moore, 2022). These relatively higher levels of stress and burnout seemed to correlate with the great resignation attrition rates.

Even though the national average voluntary quit rate was 18%, Gen Z and young millennials (ages 18-29) attrition rate was significantly higher at 37%. By comparison, the attrition rate for employees aged 30-49 was 17%, 9% between 50-64, and only 5% for 65 years old or more. Millennials and Gen Z appeared to differ from their Gen X and boomer peers. This evidence points to a need for a better understanding of the emerging and dominant generations to attract and retain them as employees.

The Two-Edged Sword of Remote Work

Before the pandemic, employees considered work from home (WFH) opportunities a luxury or privilege. According to the social exchange theory, employees were willing to perform high in exchange for the privilege of WFH. Before the pandemic, remote work had advantages to offset employee burnout, such as providing more flexibility, greater autonomy, and better work-life balance. Employees slept better while not commuting to the office daily, saving time and money.

 

However, certain conditions at home were necessary to optimize the WFH experience. Ideally, employees had a quiet workplace, fast Internet access, and minimal interruptions from family members in the home. For introverts especially, WFH seemed ideal, while extroverts found WFH to be more of a tortured situation. Thus, remote work (RW) was only for some, fitting only some situations or remote conditions.

 

However, The COVID-19 pandemic did not care about ideal RW conditions. At first, the RW option seemed like a miracle windfall for organizations. JP Morgan, which embraced remote work early in the pandemic, claimed to experience a 300% increase in the productivity of its WFH traders compared to in-office traders. Likewise, Sun Microsystems reportedly saved $500M utilizing voluntary remote teams. Additionally, remote work options initially increased employee appreciation, job satisfaction, and retention.

 

Organizations rushed to embrace remote work with little choice as the unfurled pandemic-induced lockdowns. However, in a rush to implement RW, employers needed to provide adequate guidelines and policies. For example, organizations did not offer policies that defined personal and work time boundaries. Hence, the line between work and personal life, which was already fuzzy, became indistinguishable. RW workers were suddenly unprepared to be accessible 24 hours a day, seven days a week, from any electronic device, regardless of location. However, now, there was an expectation always to answer because, theoretically, no one had any place to be during COVID-19. As a result, 67% of remote workers reported feeling pressured to be constantly available, while only 30% avoided working on weekends.

 

This blurring of the work and home boundaries led to employees working more hours. Post-pandemic, 45 % of all employees worldwide reported working longer hours, with the U.S. workforce working nearly three hours longer per day on average. Once more, 85% of RW employees took less than a week off, with 15% taking no time off. What once was a privilege and an antidote to burnout became a significant driver of burnout, leading to dramatic increases in ego-depletion and turnover.

 

Even before the pandemic, 55% of remote workers felt an “inability to balance their work and home lives." Thanks to COVID-19, the problem only got worse. 41% of employees who often work remotely reported constant stress, compared to 25% of in-office and 33% of hybrid employees. Parents with children under 18 reported more difficult times with family relationships and mental health during the WFH phase of the pandemic. Suddenly, parents needed the same quiet place to work while simultaneously helping children with homeschooling. Social media constantly reported dire news about mortality, infection, and hospitalization rates. However, Abrams (2022) noticed a critical distinction in all reported COVID-19-related stress and anxiety. Pandemic-induced stress and fatigue affected the generations differently, with millennials and Gen Z showing the highest stress levels compared to older generations.

 

Another unprecedented, millennial-exclusive trend was that 56% of millennials were single, which caused loneliness and isolation challenges during COVID-19 more than married millennials Not surprisingly, found that millennial employees that moved from full-time in-office work to full-time RW experienced a 67% increase in loneliness, and 49% said they lacked the social support needed to cope with work-related stress. Ironically, this coveted remote work situation embraced by millennials and Gen Z workers caused their stress and burnout to increase rather than decline.

These attitudes and expectations have forced managers to adjust. By adjusting their approach to leadership and embracing sustainable productivity, managers can create a more engaged, productive, and sustainable workforce that meets the expectations of younger Millennials and Gen Z workers. This can lead to increased employee satisfaction, reduced turnover, and improved business results over the long term.

Shift from Engagement to Sustainable Productivity

Sustainable productivity is a growing concept that has gained traction among forward-thinking organizations seeking to create a more engaged and productive workforce. The idea recognizes that employee well-being and engagement are critical to achieving long-term productivity and success, and that a more holistic approach is needed to achieve these goals.

 

The attitudes and expectations of younger Millennials and Gen Z workers drive companies’ need to embrace sustainable productivity. These younger workers prioritize values such as work-life balance, social responsibility, and personal fulfillment, and they expect their employers to share and promote these values. This shift in attitudes leads organizations to recognize employee well-being’s importance and focus on building a more sustainable, engaged, and productive workforce.

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Patagonia is one company that has successfully embraced sustainable productivity and effectively engaged this new, younger workforce. The outdoor apparel and equipment company has promoted sustainable business practices, focusing on employee well-being and engagement. In 2020, Patagonia was named one of the World's Most Ethical Companies by the Ethisphere Institute for the tenth consecutive year in recognition of the company's commitment to ethical and sustainable business practices.

 

Patagonia's commitment to sustainable productivity is exemplified by its "flex time" policy, which allows employees to set their own schedules and work hours. This policy recognizes the importance of work-life balance and will enable employees to manage their work around their personal and family obligations. The company also offers a range of wellness programs, including yoga classes, meditation sessions, and wellness workshops, to support employees' mental and emotional well-being.

In addition, Patagonia has a strong commitment to personal growth and development, offering a "Build Your Own Leadership" program that allows employees to develop their own leadership skills and advance their careers within the company. The company also provides a range of internships and apprenticeships to support young people in their career development.

Patagonia's commitment to sustainable productivity has benefited its employees and the company's bottom line. In 2020, the company reported record sales of $1.2 billion, despite the challenges of the COVID-19 pandemic. The company's commitment to sustainability and ethical business practices has also helped to build a loyal customer base that shares the company's values and mission.

The attitudes and expectations of younger Millennials and Gen Z workers are forcing organizations to adjust their approach to leadership to manage this emerging workforce more effectively. Organizations that embrace sustainable productivity can create a more engaged, productive, and sustainable workforce that meets the expectations of younger workers. Organizations can create a workplace culture that values and celebrates diversity, inclusivity, and sustainability by focusing on employee well-being, work-life balance, personal growth and development, and social responsibility.

If You Say Work-Life Balance One More Time …

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The phrase "work-life balance" has become a buzzword in recent years, and some employers may be tired of hearing it. However, the underlying concept of creating sustainable and fulfilling employee work experience is still essential. Rather than focusing on work-life balance, companies can consider practical ways to help employees achieve a more sustainable work pace. This could involve implementing policies and practices that support employee well-being and productivity, such as flexible work arrangements, remote work options, and time off for self-care and personal activities.

Sustainable Tips

Here are some specific strategies that companies can use to promote a more sustainable work pace for employees include:

  1. Say No to less-priority work. Leaders need to take more responsibility for the workload of their people. It can be tough to say no to a project, but good projects will keep your employees from their best work and burn them out in the end.

  2. Encouraging breaks: Encouraging employees to take breaks throughout the day can help reduce stress and increase productivity. This could involve implementing policies encouraging employees to take regular breaks, such as a midday lunch break or a short walk outside. In today’s sophisticated and technologically advanced world, it is less about the number of hours an employee works, rather the impact and contribution. Worry less about hours and more about contribution.

  3. Train in time management: Providing training and resources on time management can help employees better prioritize tasks and avoid overworking. This could involve offering workshops or coaching sessions on time management and productivity.

  4. Offer flexibility: Offering flexible work arrangements, such as appropriate remote work options or flexible schedules, can help employees better manage their work and personal responsibilities. This can lead to a more sustainable work pace.

  5. Support Employee well-being: Offering resources and programs that support employee well-being, such as mental health services, fitness classes, or mindfulness programs, can help employees feel more supported and fulfilled in their work.

  6. Emphasize personal growth and development: Offer opportunities for rsonal growth and development, including training and development programs, mentorship opportunities, and opportunities to work on meaningful projects.

 

By implementing these and other strategies, companies can help employees achieve a more sustainable work pace, reduce burnout, and improve productivity and retention. It's not just about work-life balance but creating a culture that values and supports the well-being of its employees.

 

Call To Action:

Email info@gordoncreek.com if you would like to know more about how to transform your organization’s culture into a more sustainable productivity reducing burnout and turnover of your best employees

 

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