How Labor Market Changes Affect Digital Transformation
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The days of working for one company for decades are long gone. The average American will change jobs 12 times in their lifetime, and that number is likely to only increase in the years to come. More than a third of the American workforce changed jobs in 2020, and even more are actively looking for new work as I write this. The Great Resignation is a bit of a misnomer. It has less to do with resignations and everything to do with the radical transformation of work. This is not a passing fad, but a profound and permanent change in the labor market.
Enter the era of remote work
Workers in the knowledge and technology sectors have more freedom of choice than ever. And with the prevalence of remote work, job seekers no longer have to limit themselves to jobs available in their physical location. They can work where and for whom they want.
There are now more than 15.5 million digital nomads worldwide, and a study by UpWork estimates that up to 36.2 million Americans will be working remotely by 2025. The era of digital nomads and remote workers arrived. People aren’t afraid to take advantage of their newfound freedom to quit the jobs they don’t like and pursue the ones they do (no matter how long they’ve been there).
Countries like Brazil have even started creating special visas exclusively for digital nomads to allow long-term stays for those working remotely. And that’s just the beginning. If we deny reality and try to leverage the same strategies we used before, we will fail to retain top talent and build healthy, successful businesses.
Related: Here’s How Your Workplace Can Survive The Great Resignation
Create a team
So what do all these changes mean for the future of workplaces? As many have pointed out, maintaining a stable team is harder than ever. Remote work has had a significant effect on working relationships and employee retention. When our interactions with colleagues are limited to Zoom meetings and phone calls, our working relationships become utilitarian. What do we need to accomplish in this meeting, or what do we need from each other — rather than togetherness?
Workplaces are, first and foremost, environments in which you relate to other people. Many work environments are now moving towards a large part of remote work. Thus, relationship building is done entirely through a screen. It is much more difficult to establish strong bonds once present in working relationships. The problem is that if we don’t create strong bonds with our colleagues, we also don’t create strong bonds with the company we work for. It becomes much easier for employees to jump ship when a better deal comes along. It’s because there are no relationships to sever or colleagues to abandon. They don’t leave beloved colleagues behind – they just take care of themselves.
We cannot expect business to continue as usual in response to this changing landscape. We need to evolve alongside it, establishing new mechanisms to foster company loyalty and better systems to support remote workers.
Related: 4 Ways to Design a Work Culture That Will Beat the Great Quit
The path(s) to follow
There’s more than one way to thrive in the new job market, but none includes a return to old ways. Remote work isn’t going anywhere (and I’m not advocating it either). People will continue to change jobs with increasing frequency. The path forward will require a flexible attitude, a strong commitment to the goal and a willingness to adapt.
Some companies may choose to embrace these changes and adapt their models to take advantage of short-term employee tenures. They can hire experts to create temporary teams for specific projects with a predetermined schedule. And thus break free from dependence on employees to stay with the company for years at a time. The lines between employees and independent contractors are already blurring. We have the opportunity to take advantage of this new terrain to collaborate with the best experts over shorter periods.
If temp teams aren’t attractive to your business, monitoring attrition should become an area of focus because it’s the pulse of your business. To minimize attrition, you will need to be proactive. Create programs that give employees a reason to stay by fostering a strong sense of company culture. This will likely include strong career development services, mentorship programs and employee events to cultivate a sense of community.
The change has obviously affected the outsourcing industry, both on the demand side and on the supply side of talent. A third way is to rely on other companies to provide you with the talent you need – and we can already see much greater demand for local services. But at the same time, you have to choose well so as not to be faced with the same problem of attrition, just under another entity.
Finally, there is no place for a flimsy or half-baked goal in the new job market. Leaders must lead by example to demonstrate their defined purpose. People won’t stick around to follow a leader who breaks his word as countless offers knock on their doors. It is not uncommon for people to receive several offers at the same time in this market. Some already hold several jobs simultaneously, which shows how much choice (and power) candidates have in deciding where they want to work.
Related: How Embracing The Big Redefine Will Help Your Business Thrive
Prepare to change
Some might argue that this overheated market for talent, especially in tech, could cool down with the next recession. However, I would say no. The gap between needed talent and available talent will continue to grow for the foreseeable future. This is because more and more businesses understand that technology is the backbone of any business and is actually the best way to fight a recession.
Companies cannot afford to be anything more than abstractions of people scattered around the world. We must adapt to create sustainable businesses that attract the best talent, whether in the short or long term.
Whichever path your business chooses to take, it’s time to accept that the changes we see today will continue long after the Great Resignation musings are over. The future of work is changing. Are you ready to change with him?