In this two-part Blog, I discuss how the balance of power in business has shifted from employer to employee post-pandemic. In Part 1, I outline the changes and factors leading to the balance of power shifting. In Part 2, I workshop what business owners (employers) can do to tackle this shift in the balance of power.
Prior to the pandemic, employers had held the balance of power over employees. There had been no real wages growth for 8-10 years and Australia was close to full employment.
During the pandemic, and post-pandemic, there were emerging factors that have led to there being a shift in the balance of power.
Now employees have their hand on the tiller and are controlling the agenda.
What has changed?
So many changes have occurred during the last two years including:
COVID-19 lockdowns
Working from home required (lockdowns)
Working from home conditions changed (post-pandemic)
Industry/sector shutdowns
Scarcity of labour in all industries
Skills shortage
Migration from large cities and metropolitan areas to regional and country areas being the sea-change & tree-change phenomena (including net negative migration in Victoria)
Border closures
Significant reduction in overseas students
Significant reduction in working visas
Vocational career change
Training & development ceased or significantly reduced
Workers finding easier ways to make a living
Employees reflecting on career and work/life balance including factors such as daily commute, attending a centralized office/factory daily and working hours
Employees more open to change as a result of lockdowns, changing working conditions and a shift in the traditional employment paradigm
What factors have arisen because of these changes?
Changes out of the pandemic have led to new and emerging factors including:
Employers grappling with introducing suitable virtual work models between physical attendance at business locations and working from home
Employees being offered significant pay rises to change jobs (up to 30% in some cases)
Employees being able to change vocation more easily
Employees have greater expectations around flexible working conditions
Employees seeking to work from home on a full-time basis
Employees seeking better terms and working conditions
Retention of talent is more challenging with a more transient workforce
Punctuality and attendance have been an issue with many employers
Difficulties faced by employers in replacing departing employees with new employees
Incumbent continuing employees complaining of being overworked because of labour shortage
Employers noting that employee demands becoming ever greater
Employers finding it hard to measure productivity under new virtual work models
Leadership noting difficulties in clarity of messaging to teams
Managers reporting a struggle to manage teams and individuals remotely
Reported decline in knowledge transfer and training
Reports of reduction in incidental information sharing between employees/teams a as result of remote work model
Induction of new employees reported to be more difficult under remote working conditions
Professional development reported to be weaker as ‘on-the-job’ training not as strong as junior employees not sitting shoulder-to-shoulder with their managers and co-workers
Less mentoring is occurring through remote work model
Morale and culture reported to be weakening as teams are spending less time together in-person
Employers concerned over future career progression and promotion as employee development is not considered as fast-tracked as working together in central business location (For example, a Graduate needs strong hands-on guidance, supervision and direction in early working life)
There simply are so many challenges that both employees and employers face now.
With the balance of power shifting from employer to employee, business owners must now hustle to keep their teams intact and productive.
Business owners must now protect their businesses like never before in recent memory.
In part 2 of this Blog, I will extend this discussion to what business owners (employers) can do to overcome these massive challenges.
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