Power shift is a litmus test for how leaders make decisions about people: WTW’s Nick Lynn

With changing employee expectations about flexibility at work, almost every company is forced to come up with new policies. While a lot of leaders want to see their staff back at their desks, some are engaging with employees to find solutions that are right for everyone. “The best companies are reflecting on this transition broadly,” says Nick Lynn, Senior Director of Employee Experience Consulting at Willis Towers Watson (WTW), “to find solutions that can help them retain people who want flexibility and attract new sources of talent that perhaps weren’t open to you before.”

Nick has advised clients on how to improve engagement, culture, and leadership effectiveness for 20 years and is the author of the top-selling book “Employee Experience (EX) Leadership”.

In this exclusive interview with us, Nick shares some sharp insights on the global power shift and how employers should reframe their relationship with their employees. 

Here are the edited excerpts.

As the Great Resignation persists, employer-employee dynamics appear to be changing. How do you see the power shift globally?

During the pandemic, some people certainly re-evaluated what they want from work and decided to make a change. We saw indications of this very early on during Covid. Power is shifting, but things are complicated. In relation to the Great Resignation, there are many causes of turnover.  

• There are employees who feel they have been treated poorly by their employer during this period. There’s been a lot of restructuring, cost-cutting, and lay-offs. As soon as things opened up, people wanted to move on.
• Others, meanwhile, are frustrated by longer-term problems at their companies and have said: “enough is enough”. Studies have shown how toxic work culture is linked to high turnover.
• Looking at the data, there have been many sideways moves – perhaps also driven by people looking to earn a bit more as the cost-of-living increases.
• In certain industries, there’s a lack of people with the required skills, which means there’s competition for key talent. These are longer-term sectoral problems, however. Overall, it’s early to talk about a general shift in power coming out of all this.

In fact, the overall balance of risk has been shifting for a long while in the opposite direction, so more individual risk now falls on employees and workers than it has in the past. 

That’s one reason why there’s a large trust gap in many organisations. The best companies realise they need to address that by transforming employee experience.

Employers are now drawing people back to the office, but some employees are stubbornly resisting resuming their commute. How do you think this will unravel?

I think it’s a litmus test for how leaders make decisions about people generally. A lot of leaders are stuck in a command-and-control mindset. They want to see people back at their desks because they judge productivity and culture in terms of visible activity and “busyness”.

The pandemic has changed employees’ expectations about work flexibility. Before the pandemic, only 10% of people were working remotely and only leading companies had anything serious in place regarding flexible working. Now, according to our research, 56% of employees are working in remote/hybrid models and just about every company has been forced to come up with policies.

Most are approaching decisions about the future sensibly. They’re not rushing to impose rules but are engaging with employees to find solutions that are right for everyone. If you do that, then you can retain people who want flexibility and attract new sources of talent that perhaps weren’t open to you before.

The best companies are also thinking broadly about this. They’re considering what kinds of workplaces they need. They’re reflecting on what it means for their culture when you have people who must be onsite and others who could be anywhere. They’re thinking about the future of jobs, alongside other trends like automation.

There’s so much noise about this issue that it’s a great example of Roy Amara’s law, that we tend to overestimate the effect of something in the short run and underestimate the effect in the long run. A transformation is taking place, but we’re focusing on the short-term fuss rather than deeper structural changes in jobs and work.

How do you think employers should reframe their relationship with their employees?

When we look at what matters for transforming employee experience, there are four areas that companies need to think about.

1. There is a sense of purpose that people get from work. This means helping people understand how their work fits in. It’s showing them how they impact customers. It’s also about involving people so that the workplace is inclusive.
2. Many organisations that I work with have a sharp focus on the work itself. They’re looking to transform employee experience and business performance through simplification, work technology, and empowerment.
3. It’s important to clarify the total rewards that are offered in return for your contribution. Many companies are terrible at communicating the value of total rewards. It is more than talking about pay and benefits, it’s about helping people understand how they can grow and reach their potential.
4. Most leaders I’m working with are (rightly) very focused on culture. There’s a sense that culture has shifted over the last couple of years. Leaders also know that a culture change is required to be successful in a more volatile and uncertain world. 

What also matters is how you activate them by identifying the moments that matter for employee experience and through personalization and great technology. In our research, we found that only 9% of organizations have transformed employee experience in this way. Most companies have a lot of work to do.

How can organisations meet the rise in demand for flexibility, wellness benefits, and support for career growth?  

There are two aspects to this.

The first is taking an integrated approach. At WTW, we talk about physical, financial, emotional, and social well-being. All these are important. But well-being is not an isolated programme or initiative; it’s purpose-driven and woven into the fabric of your organisation’s values and the employee experience. It is inextricably linked to a myriad of policies, programmes, and benefit offerings as well as to desired culture, productivity improvement, longer term talent retention and sustainability of business results. Many organizations focus on individual solutions or tools, but you also need to understand the role and impact of senior leadership and day-to-day managers in establishing and maintaining healthy company culture.

A second key step is prioritizing programmes by really understanding employee needs. For example, we help leaders optimise their total rewards by capturing employee preferences and then costing different options. By total rewards, I mean everything from pay and benefits, to flexible working, to learning new skills and supporting careers. If you really understand what’s important to people, you can make better design choices. By changing the mix of total rewards that you offer, you may be able to provide more value without spending any extra money. When so many companies are worried about losing talent, and when you don’t have lots of cash to spend, this kind of insight is critical.

Related to this is the ability to personalize communications and drive behaviour change through digital technology. Ideally, you’re providing information in the moments that matter to people in a way that helps them make the best choices.

How will this power shift shape the future direction of work and the workplace, especially in today's volatile world?

What we have seen throughout the pandemic is high levels of anxiety. This indicates that we are operating in a time when things not only feel volatile and uncertain but brittle and hard to make sense of.

One way that leaders can respond is by zeroing in on the interactions that are most important. In our research, for example, we have identified five “breakthrough moments”. They’re all about addressing current and future challenges to achieve a high-performance employee experience:

1. Adapting to flexible work (not just where work gets done, but how and by whom)
2. Re-balancing your worker priorities, so you can deliver fair pay, align programs to meet the needs of a more diverse workforce, and invest in health and wellbeing
3. Equipping leaders and managers to lead through change
4. Connecting with employees by really listening to them
5. Building an EX strategy that’s integrated with your business strategy and fueled by technology.

In our research, we see a performance premium for those companies that do these things well, including higher productivity and lower staff turnover. 

Can you share insights from your customers about how they are navigating the employer-employee power shift? 

In practical terms, our clients are doing lots of different things to address those “breakthrough moments” I described.

For example, we’ve worked with a large transportation company to develop an EX “blueprint” that’s designed to power their overall business transformation. This meant assessing their current employee experience, helping leaders articulate their aspirations, and then prioritizing programs based on where they need to close gaps the fastest.

We also recently worked with a financial services company to completely revamp their approach to well-being by focusing on the employee experience. This involved creating a digital navigation tool, which begins from the point of key moments of need from the employee’s perspective (physical, financial, social, or emotional).

And we’re working with an auto manufacturer that’s making a huge investment in skills, effectively re-wiring the whole organization to operate in an EV world. Alongside this, we’re building a strategy for the future of jobs and a whole new career architecture in order to transform employee experience and engagement.

In all these examples there are three common elements:

1. Understanding workforce needs through things like pulse surveys, virtual focus groups, and smart analytics. We have great software to do that, including for making sense of qualitative data.

2. Prioritising programmes and changes so you focus on the moments that really matter.

3. Sparking behaviour change through digital communications, people leadership capability, design thinking, and involvement. This is another area where we have a big focus. For example, we have a very smart “EX platform” that our clients use for personalizing communications at scale.