The future of your business’ labor and the labor relationship

The struggles of the labor force are widespread and well understood to anyone who has tried to hire an employee since the “re-opening” began some months ago. Various factors, from expectation and generational changes to inflation and wage demand increases, have made hiring and retaining talent tremendously difficult. So, what can companies do to improve their labor situation?

The answer lies in the evolution of the employer-employee relationship. Companies must look to better their relationships with their workforce by addressing factors that may have been overlooked or even considered nonstarters in the past. Change is vital.

Change in behavior, demographics

Employers across industries are grappling with a revolution in employee expectations and preferences that they will have to address. Many less-stable industries, like restaurants or retail, can attribute some of the shortages to the variability of their schedules (and thus, employee pay). The pandemic gave many of these workers the chance to see what life is like without the craziness of a demanding schedule at minimum wage, and they liked the change.

Macroeconomic implications of the pandemic, such as inflation and employment costs rising will continue to wreak new havoc on the labor market. The Great Resignation has added a level of variability that organizations have not dealt with previously, as evidenced by the “near-record” 4.3 million employees who quit their jobs in December. The rate of change in today’s world is increasing, driving younger and more tech savvy employees to believe that the red tape and inefficiencies of organizations are impediments to their growth.

An extended view of the need for technology in corporate processes and labor is the mere fact that the labor force continues to have a growth rate that is smaller than the general population of the US.

Remedies and relations

Employers should start by asking their employees or interviewees a question like “why aren’t you interested in coming back?”

Honest answers to questions like this will help employers focus on the most impactful improvements first. Low hanging fruit includes wages, flexibility, employee development and using technology to improve the day to day lives of employees. All will lend to enhancements in the work environment, thus increasing the likelihood of employee retention.

First, companies must realize that wage expectations are evolving more quickly than they used to. Bigger responsibilities placed on younger employees paired with inflation, especially the increased cost of living in urban areas that millennials tend to favor, have created an environment where employees expect more than inflation raises each year. That’s especially true because inflation has outpaced those raises for a few years now. Companies can utilize other non-salary financial perks to interest millennials as well, with top examples being debt repayments (education), 401k matching programs and subsidized healthcare.

Flexibility is key – for any type of worker. Work from home has become the norm for many industries, and often the preferred way of working. The benefits of enhanced work-life balance, such as competitive (or even honestly communicated expectations for) PTO and expanded parental leave, will pay dividends when catering to a generation that increasingly cares about enjoying their younger years and being present for life’s non-work big moments. Giving employees the ability to produce and enjoy their non-work lives on their own terms will provide tremendous labor benefits.

Investing in technology will help both the firm and its employees. From robotic process automation and artificial intelligence to humanoid robots, the future of business technology is here. Augmenting or complementing the labor force with appropriate technology can make jobs more interesting, challenging and fulfilling to employees – peaking interest, engagement, and retention. Reducing administrative tasks and using technology to supplant unwanted travel are just two prime examples of impacts that can be seen by many industries.

Lastly, companies should work to help employees progress their skills, careers, and general wellbeing. Employees who feel stagnant, or worse, underappreciated, are more likely to seek better pastures. Not only will a renewed focus on the wellbeing and development of an employee increase retention rates, but it will also bolster productivity.

About the author:

Alex “AJ” Cheesman is Manager of Supply Chain Transformation at NTT Data Services. He is an experienced supply chain and logistics consultant with an international background in logistics, complex warehouse management systems and e-commerce. Cheesman has in depth process design and improvement experience, this includes processes related to and outside of warehouse, order management and supply chain optimization spaces. He can be reached at [email protected].

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