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This past year has marked a sea change
in the traditional relationship between employer and employee. We are
experiencing a paradigm shift, and the power and prominence that once rested
with the boss has gravitated toward the employee.
change may have been gaining momentum for years – but it’s likely the pandemic accelerated
it. The situation is reminiscent of a passage in Ernest Hemingway’s The Sun Also Rises, which captures the
human tendency to overlook issues until they become a crisis. When character
Mike Campbell is asked, “How did you go bankrupt?” he responds, “Two ways.
Gradually and then suddenly.”
consider the nature of the rapidly changing workplace, to which employers have
had to adjust. Many more employees now work from home. In-person company meetings
have been replaced with virtual formats. The once-familiar system of desks,
cubicles, offices and floors of employees working together suddenly feels
quaint and old-fashioned.
employees, the time, cost and aggravation of commuting seems to be in the
rearview mirror. But while there are fewer interruptions by co-workers when
working from home, other distractions from neighbors, kids, pets, delivery
services and elsewhere have become the new normal. New perils, such as the battle
for home bandwidth, have emerged.
Second, of course, is a historically
tight labor market. I’ve heard more than a few executive leaders say, “The war
for talent is over, and talent has won.” The ongoing competition for talent has
meant new concerns and issues for management.
According to this article
by The Washington Post, 4.4 million Americans left their jobs in September
2021 alone. The number one concern of employers is now employee retention. Every
day, we see companies respond with new ways to ensure their employees remain their employees. Sound recruiting
programs remain critical, of course. But we continually hear of fresh strategies
to foster employee retention, including shorter workweeks, retention bonuses, flexible
workplace, flexible hours and more flexible childcare.
related to retention is a concern for employee safety. Those concerns take so
many forms now, including providing access to resources to manage burnout and
other mental health ramifications. The natural human reluctance to wear a mask
all day must be balanced with the health concerns of others. An employer’s concern
about employee safety now extends to the health and well-being of the employees’
so long ago, the fashionable term and hot-button issue for employers was
“work-life balance.” That narrow concept was wholly obliterated with the onset
of the pandemic. A new term, “work-life integration,” seems to have found
purchase. We’ve entered a new normal that is much broader; employers must be
respectful of each employee’s concerns about the manner in which they carry on
with their daily lives.
recent article in The Wall Street Journal
addresses the movement towards a more compassionate posture towards work-life.
The article referenced those companies instituting “mandatory” vacation days
and blackout hours when no meetings can be scheduled. These companies are
working to address the stress associated with “density” of the days – back-to-back-to-back
commitments with no time in between to reset or prepare.
Further, the article cites statistics
that indicate that before the pandemic, 60% of employees said their own mental
well-being was their responsibility. Since, that statistic has flipped, and 62%
now say the employer has a share in that responsibility.
As a consequence, employers are searching
for innovative ideas in the workplace to simply demonstrate in tangible ways that
they care. This feels like a very new element to the employer-employee
turnover is costly; even highly profit-focused companies realize the importance
of employee retention on their success. The concept of bottom-line
profitability as the employer’s only concern is fiction. That goal has been
replaced by a focus on employee retention and well-being. It does seem that
2021 was the Year of the Employee, and we’ve entered a new frontier that is
emerging from this tectonic shift in the relationship between employer and
understand more than ever that without employees who are diligent about their
work and committed to the organization’s core values, profitability is less likely.
Organizations now face clear and present risks to their ability to continue as
a going concern. The safety and happiness of their employees are now paramount.
Joe Herbers is Pinnacle’s managing principal and a consulting actuary with more than 30 years’ experience. His practice focuses on providing loss reserving and funding studies for a wide variety of entities – both traditional insurers and alternative markets. Joe’s specialties include policyholder-owned group captives, large-deductible and/or self-insured entities, lawyers’ professional liability carriers, Florida property writers and non-standard auto writers in the state of Illinois. Joe is an Associate of the Casualty Actuarial Society (ACAS), a Member of the American Academy of Actuaries (MAAA) and Chartered Enterprise Risk Analyst (CERA). He served as long-time member and Chair of the American Academy of Actuaries Committee on Property Liability Financial Reporting (COPLFR), as well as several other professional committees. He is a regular speaker at industry events.
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