In this month’s instalment of our Market Burst, we dive into how Gen Zers push the DE&I frontier, the latest trend of acting your wage, and the cost of living crisis.
Gen Z pushing the DE&I frontier
Although Gen Zers are new to the workforce, they already have a massive influence on how workplaces operate. One example of this: young workers expect companies to prioritise DE&I strategies. Data shows that 75% of Gen Z candidates would reconsider applying to a company if unsatisfied with their diversity efforts, while 6 in 10 pay close attention to whether or not the organisation hires and promotes diverse talent.
Employers must continue seeking effective ways to recruit and retain candidates from underrepresented backgrounds as it’s essential for young employees to feel visible and supported in the workplace. Organisations that fall short in this area will find it hard to compete in an increasingly complex job market.
AI is a powerful tool in the search for qualified candidates. The technology can take human bias out of the hiring process and help identify more diverse talent by analysing CVs for pronouns, schools, and memberships with diversity organisations. Additionally, AI tools can understand how underrepresented candidates react to the job market for a particular role. They can also identify weaknesses in hiring strategy by analysing how the TA team interacts with minority groups.
Hiring diverse talent is essential, but so is creating career growth pathways for all employees. By promoting diverse workers from within the company, employers develop a more sustainable DE&I strategy for the long term. Goldman Sachs recently succeeded in this area, naming a record number of diverse partners in its annual promotion cycle. The bank promoted 23 female and 28 non-white employees, as well as two individuals who identify as members of the LGBTQ+ community. This is a continuation of the bank’s efforts to drive the diversity agenda internally.
Recruitment engagement reimagined
Our Global Workforce of the Future report reveals that nearly 5 in 10 workers are actively monitoring the job market for opportunities and applying for attractive roles. This reveals the need for employers to tap into recruitment marketing and gain an edge over their competitors. Rethinking candidate attraction and engagement strategies is fundamental if organisations want to fill positions with top talent. Traditional approaches are unlikely to engage sought-after candidates in 2023 and beyond, and firms need to turn to technology to streamline recruitment and accelerate hiring.
For example, today’s job seekers see flexible on-demand interviews and assessments as the norm. Asynchronous interviewing tools have been widely adopted since the start of global lockdowns. Many organisations’ recruitment processes already involve virtual screening options, such as behavioural and cognitive ability assessments, task simulations, and job knowledge tests. Pontoon’s Digital RXO offering integrates technology with streamlined recruitment processes to enhance the candidate experience, increase visibility, and improve cycle times. It also leverages advanced analytics to enable workforce planning and help find and engage untapped pockets of talent. Elliot Owens, Head of Pontoon Analytics, believes that predictive talent analytics is vital to improving candidate engagement, hiring processes, and performance management. Recruitment and analytics teams must work together to use available data for discovering and engaging talent ahead of the competition.
Acting your wage – a twin of quiet quitting?
“Acting your wage” is yet another job market trend going viral on social media. Like quiet quitting, acting your wage refers to a growing reluctance to participate in a culture of overwork. Employees are raising concerns about what’s expected of them compared to how much they earn.
These trends emerge as employee engagement is dropping. In the US, only 32% of full- and part-time employees feel engaged at work, while 17% are actively disengaged, according to research from Gallup. If organisations are to nip this tendencies in the bud and tackle engagement issues among their workforce, they must act now.
When managers identify an employee “acting their wage”, they should start with an open and respectful conversation about the reasons behind the lack of engagement. While it may seem obvious that this has to do with non-satisfactory pay, it’s often connected with the lack of career progression or development opportunities. Managers need to help their staff recognise their long-term potential and allow them to develop skills while on the job. Recognition, praise, and setting highly motivating challenges can reignite employees’ passion for their job.
Firms must support their workers by developing clear career progression paths. This can include growth opportunities and learning initiatives. By rewarding the employees in various ways, not just in basic compensation, companies will find it easier to keep their workforce engaged.
Deploying internal mobility to attract digital nomads
Flexibility continues to be a top priority for employees, even after the pandemic. Data reveals that 73% of workers rank full flexibility as important to their work-life balance. This includes the ability to choose on-site, remote or hybrid work, flexible hours, and unlimited vacation, among other factors.
Digital nomadism is a natural solution that ticks several of these boxes for many workers. While digital nomads can work remotely from anywhere on Earth, they also face a unique set of challenges – like health insurance coverage and varying local tax laws. Despite these hurdles, 60% of employees want to become “digital nomads” for at least a year within the next three years.
Global companies can appeal to remote workers by inviting internal mobility across different company locations if they want to leverage the digital nomad trend. This approach may be attractive to current and prospective employees interested in remote work as it offers the stability and career progression typical digital nomads lack. Employers should see this as an opportunity to retain talented employees rather than lose them to competitors who offer more flexible work arrangements.
The cost-of-living crisis and how firms can help
There’s no denying that a recession is on the horizon as inflation skyrockets worldwide. This has triggered a cost-of-living crisis on a global scale, squeezing employees financially. 5 in 10 workers in Europe are becoming increasingly concerned with paying for essentials, and 25% worry about not getting a pay raise. Employees are unsure whether their companies will continue to invest in people as the economy worsens, and many are turning to second jobs or gig work to make ends meet.
Employers may be exposed to lower employee engagement and retention if they do not address the crisis. Companies that are unable to raise wages should consider alternative benefits.
For example, IKEA expanded their support with a €10 million social fund to help in-need workers. They also increased employee discounts on groceries and energy-saving products from 15% to 30%. Rolls Royce awarded a £2,000 bonus to help their 14,000 UK employees overcome rising living costs. The firm also partnered with their workers’ union to give shop floor staff a 4% pay rise that was backdated to March 2022.
More organisations will likely follow suit if they are serious about talent retention and keeping their employees on board.