What authentic and credible companies do right

Four out of five executives believe that HR and business issues have never been more closely intertwined. That's why it's critical for companies to be more open and approachable, helping potential employees make the right choice when looking for the right employer. This and more is a finding of Mercer's new 2022 "Global Talent Trends" study, titled "The Rise of the Relatable Organization." Drawing on insights from nearly 11,000 executives, HR leaders and employees, the research identifies trends in how to build authentic and credible organizations in an environment of heightened risk.

Employees seek empathy, understanding and flexibility

"Today, more than ever, talent and employees expect employers to make a contribution to society and thus also to make their values visible to the outside world," says Stephan Pieronczyk, Partner and Leader of the Transformation Practice Europe at Mercer. "At the same time, people are also looking closely at how companies behave internally. Do they show empathy, understanding and flexibility towards employees? Especially in the last two years of the global pandemic, these points were extremely in focus and topics like remote working, flexible working and also the physical, mental, financial and social well-being of employees had a whole new significance." The challenge, of course, is also to make the necessary progress here while dealing with inflationary pressures, adapting to new crises and dealing with different views on the future of work, Pieronczyk added.

What do authentic and credible companies do right? Five trends

1. refocusing on relevance
Staying relevant requires adapting to the changing values of customers, employees and investors. This requires a realignment of priorities and a new work model that is adaptable, seamlessly engages people, and redefines the talent experience. Companies that put their core values into action - through corporate goals, work standards and investment strategies - will build better relationships with their stakeholders and be better able to deliver business results. And they will allow employees across the organization to make value-based decisions every day.

• After job security, the company's brand and reputation are now the second most important reason for switching to a new employer (ranked 9th before the pandemic).
• Employees want to work for companies that reflect their personal values. 96 percent of employees expect their employer to pursue a sustainability agenda that balances financial results, social issues, diversity/participation and environmental impact.
• The need to respond in a more nuanced and individualized way to changing moods requires new organizational capabilities of listening, learning and adapting to identify and meet unmet needs. Yet only 55 percent of workers say their organization is meeting all their needs.

"Companies that fail to listen and constantly adapt to their employees and other stakeholders will lose the ability to raise capital, attract and retain talent, and stay relevant," said Ilya Bonic, Head of Strategy and Career President at Mercer. Authentic and credible companies, on the other hand, would be clear about what they stand for. In addition, he said, they make it a priority to set good labor standards that reflect the values of their stakeholders in a changing world. "They listen relentlessly to what drives consumer and employee behavior, and their strategy focuses on building cultures and practices that are adaptable by design," Bonic said.

2. partnership work
The study shows that people no longer want to work for a company, but with a company. Nearly all executives (96 percent) say we are in an employee-centric labor market, and 70 percent of recruiters predict higher-than-average turnover this year - especially with regard to younger workers and those in the digital space. Partnering means re-evaluating the relationship between employees and employers. Reliable companies are recognizing the value of "partnership" rather than "leadership" and are doing so by evolving their return-to-work strategies into sustainable models for the future of work. Kate Bravery, author of the report and Global Leader of Advisory Solutions & Insights at Mercer, adds, "The future of work will only be successful if everyone feels they are getting a fair deal and benefit from an equal relationship between employer and individual, regardless of employment status or the type of work he or she does. Today, it's not just knowledge workers who are demanding flexible options that work with their lives, but all workers - from shop floor laborers to truck drivers."

• Nearly all HR leaders (90 percent) believe more needs to be done to build a culture of trust within their organization, especially as many consider moving to a hybrid work model. Yet only 30 percent of leaders see ROI in building a healthy, resilient and equitable future of work.
• More than half (62 percent) of employees would only work for a company if they had the option to work remotely or in a hybrid work relationship, and 74 percent believe their company will be more successful with remote and/or hybrid work arrangements. In contrast, the majority of executives (72 percent) are concerned about the impact on company culture, as 75 percent say they now have a training culture where employees learn side-by-side rather than remotely - requiring a redesign of learning.
• Gig working remains a preferred strategy for the executive suite, with six in 10 executives expecting gig workers to largely replace full-time employees in their company over the next three years. However, with fewer than 6 in 10 full-time employees open to gig working, more needs to be done to make this a viable, attractive and safe option for workers.

"Authentic, credible companies are welcoming new work models (talent in flexible roles that are no longer fixed, agile ways of working, optimizing the interaction of people and automation) and different ways of engaging talent in work (gig, variable/seasonal, shared, part-time, full-time). But so far, fewer than one in five companies are reviewing the terms and benefits of gig working," says Ravin Jesuthasan, Global Leader for Transformation Services at Mercer. "It will be critical to ensure that all relationships across the talent ecosystem are fully supported to be active parts of the corporate culture when it comes to adopting a new work system and achieving the goal of sustainable agility."

3. improve the overall well-being
The pandemic exposed and widened the health and wealth gaps between different populations, underscoring that accessibility and affordability of care are not enough. Shifting the focus from reducing health care costs to optimizing investments to keep people healthy and engaged is key to "people sustainability."

• An impressive 81 percent of employees feel at risk of burnout this year (up from 63 percent in 2020) and cite not feeling adequately rewarded for their efforts as the top reason. Employee wellbeing is seen by leaders as the HR initiative that will deliver the second greatest ROI over the next two years (after retraining).
• Good mental health has always been part of overall well-being, but companies are doing more to help their employees achieve it. More than a third (36 percent) of companies are implementing a mental or emotional wellbeing strategy this year.
• Across all demographic groups, financial concerns have increased: Half (51 percent) of workers say they feel uncertain about their financial future.

"Employees are more stressed than ever - and the study's findings show that companies could be doing more to offer a holistic and inclusive wellbeing strategy that meets the needs of a multi-generational and diverse workforce," said Lutz Krepper, Commercial Head at Mercer Switzerland. "Our experience with many Swiss
Companies show that although the topic of wellbeing is often on the agenda, many organizations do not know how they can make the right progress here and also offer their employees the right benefits and support. What's important here are benchmarks to properly rank themselves within the market, digital focus groups to understand what employees really want, and also digital tools and platforms to reach everyone with benefits and wellbeing offerings, whether in the office or remotely."

4. build employability
The pandemic has accelerated the corporate retraining race, but in many cases, related initiatives have been disconnected from the company's strategy for the future. A strategy that addresses both current and future talent needs can ensure employees are and remain employable. Skills-based models allow companies to deploy talent more flexibly and draw on broader and more diverse talent pools - already a priority for one in three companies.

• Nearly all employees (91 percent) reported learning a new skill recently, but a staggering 98 percent of companies report significant skills gaps within their organization. Visibility into what skills are most needed can help employees maintain their own employability and focus their own learning efforts on the skills that will drive business growth.
• The biggest concern for HR managers is that retrained talent will leave the company. One way to solve this problem is to provide employees with more opportunities to use their newly acquired skills. Nearly 90 percent of companies have already implemented or plan to implement an AI-powered internal talent marketplace platform to facilitate the transition.
• In 2019, 25 percent of workers said they intend to leave the workforce entirely when they reach retirement age; this year, that number has dropped to 16 percent. In response, 39 percent of companies allow employees to customize retirement benefits to fit their personal circumstances, and 38 percent proactively offer older workers a variety of employment options, including phased retirement.

"As skills become the currency of work, there is an urgent need to rethink how work is done and how skills are made visible. Authentic and credible companies not only know the potential of their employees in their talent ecosystem, but are using AI and technology to figure out which careers to
could have tomorrow," Ravin Jesuthasan explains.

5. use of the collective energy
The pandemic has accelerated the adoption of new technologies, business models and modern ways of working. Experiencing this magnitude of change in a compressed period of time, in addition to the fatigue caused by these events, has taken its toll. The percentage of employees who report feeling energized has dropped significantly - from 74 percent in 2019 to 63 percent this year, the lowest in the seven-year history of this study. At the same time, employees are more optimistic about the future: When asked what the future of work will look like, 51 percent of respondents said they expect it to be more balanced, with more time for family, hobbies, health and learning.

Nearly all companies (97 percent) are planning an enterprise-wide transformation this year, but employee fatigue is cited by all three stakeholder groups as the biggest barrier to implementation. Employees also cite organizational complexity as a critical barrier. It will be critical in the course of restructuring,
rethink the employee experience with energy in mind, as 65 percent of executives believe that automating HR processes has caused them to lose valuable contact between HR and the business. What is needed, therefore, is to promote digital adoption and improve communication, as Kate Bravery explains. In addition, she says, there is a need to redesign HR based on desired target interactions with the new personas who occupy jobs and workspaces.

Source: Mercer