Newsroom

A Crisis of Talent or Leadership?

By Merage School Dean Ian O. Williamson

Irvine, CA - (April 03, 2023) -

What employers need to understand about trust in today’s changing workforce landscape.

In recent years, this idea of a so-called talent crisis—driven largely by the notions of the Great Resignation and Quiet Quitting—has forced companies to take a hard look at how they manage their labor force. Talent shortages, the prevalence of remote work and the rise of the gig economy have all shifted the power between employees and employers, such that employees feel more empowered to shape when and how they work. In turn, companies have had to find ways to strike a balance between their needs and the needs of employees to attract and retain talent.

But, consider for a moment, that the crisis isn’t really one of talent. Rather, it’s one of leadership. We’re also seeing fragility in the relationship between leaders and employees, especially with regards to trust. All of this is unfolding as we seek out a consensus on what the new normal should look like.

At the height of the pandemic, patience, understanding and empathy guided our actions and our decisions. Employers took extra precautions to help essential on-site workers avoid exposure, guided by close conversations with health and safety professionals who might have previously been unfairly perceived as nonessential. Meanwhile, office workers were sent to work from home, where they struggled to juggle video meetings as distractions of life played out in the background.

Yet now that we have moved past the emergency response phase of the pandemic, those who are eager to return to normal are facing resistance from those who prefer the flexibility and accommodations introduced to the workplace during the pandemic. And those safety experts—once so important to COVID-19 organizational strategy—are now being cast aside by some leaders. Taking into account these factors and anecdotes from around the business world, it’s evident the desire to return to work pre-COVID is pitting the wishes of management against the wishes of workers.

A global workforce survey by the Future Forum Focus found a number of disparities between executive and non-executive employees as it relates to remote and hybrid work that further illustrate this growing divide. According to the report, executives say they’re dealing with 20% worse work-life balance issues and 40% more work-related stress and anxiety year-over-year—clear signs that business leaders are still learning how to cope with hybrid environments.

By contrast, employees with full schedule flexibility—defined as the ability to adjust their own working hours and locations—are nearly 30% more productive. Furthermore, their ability to focus is more than 50% greater than workers with non-flexible work schedules.

Job satisfaction numbers are up while stress and anxiety have declined from 2021 to late 2022. Notably, African American and Hispanic workers are reporting gains for a sense of belonging, a noteworthy milestone that can be attributed to both flexible work and greater commitments to diversity, equity and inclusion (DEI) initiatives.

It’s clear from this data that the workplace is still shifting and unlikely to ever go back to the way things were before COVID-19. Too much has changed—and now business leaders must change their approach to work in kind. This may include reviewing how they think about employees, what benefits they offer and how they account for the larger geopolitical climate.

One unwise organizational decision can have ripple effects for years to come. To walk this tightrope properly, leaders must engage the resources around them—especially the voices of their own employees and workplace safety experts. In doing so, they can move carefully toward a middle ground where workers feel comfortable and operations continue running smoothly.

Debating In-Person vs. Virtual Work

Many executives have noted the importance of in-person interactions and an office culture where watercooler meetings and informal chats lead to personal growth, new opportunities and leadership development as key reasons against virtual work.

But for every argument about the value of real-life interactions, there’s a counterargument from employees who have established a camaraderie with colleagues and clients in other parts of the country via video conferencing or Slack messages. In fact, this is often the only interactive option for larger companies whose workforces share projects yet are spread across the country, or even the world. These employees argue they are more productive in a remote environment or have found a greater work-life balance through flexible work arrangements. Some workers have even found they spend more time working each day thanks to the removal of their commute.

For a generation of up-and-coming employees who have attended school online, fallen in love online and had meaningful online social interactions with people around the world, the idea that they can’t work online seems ridiculous. They see their lives as a seamless combination of virtual and physical interactions.

Increasingly, the data shows that this is what employees want. Consider that in March 2020, one in 67 U.S. jobs offered a remote work option. Two years later, about one in every seven U.S. jobs offered remote work. In addition, remote jobs on LinkedIn have attracted more than twice as many views and resulted in nearly three times the number of applicants.

Of course, not every position is eligible for remote work. Jobs in the manufacturing, construction and service industries—to name only a few—continue to require in-person interaction each day. But the safety hazards of those jobs are more easily defined, and workers in these fields are more aware of the associated risks than for remote workers.

Leaders would be wise to inform their remote workers about the mental and physical safety concerns that come with long-term remote work. Over time, a lack of face-to-face interaction—and countless hours spent hunched over a bright laptop screen—could have more negative effects than some employees realize. There are other safety concerns that arise when working from home, too. By articulating these concerns in good faith, leaders will earn goodwill among their employees and foster the kinds of conversations that promote a safe, engaged and productive work environment.

Intersection of Trust and Diversity

Several years ago, my colleagues and I studied the intersection of trust and diversity among workplace teams. We found that when a virtual work environment was introduced, the levels of trust were higher, and the team’s performance was enhanced. Why? Because it created a level playing field that allowed team members to thrive in their own environments.

Before the pandemic, some employees just didn’t thrive in the office—perhaps because they weren’t willing or able to perform some of the duties that leaders looked highly upon in office politics, such as staying late, performing menial tasks or even tolerating out-of-line comments from superiors. But now that we have a basis of comparison, we understand that perhaps the problem wasn’t the employee, but actually the work environment. Thanks to the pandemic, we now know an alternative way of working, and some employees are saying, “I prefer that approach.”

But are leaders willing to acknowledge and accept that the workplace culture must be broader than it once was? Are they willing to trust their employees when they say that once-prized behaviors, such as arriving first at the office, aren’t the best metrics of dedication or leadership potential?

Leaders who issue return-to-office mandates or otherwise implement policies that meet their own priorities but ignore their employees’ needs risk alienating employees and watching talent walk out the door—all because they reject an approach that’s proven effective simply because it runs counter to their idea of what a workplace environment should look like.

Those who are seeking out the best talent must realize that people have other priorities or commitments in their lives—whether it’s caring for small children or elderly parents, the desire to buy a home in a less-expensive area or the quality of life that comes with avoiding a horrible daily commute. We know diverse companies perform better, and we know an inclusive workplace culture attracts diverse groups of employees. What’s holding leaders back from embracing the future?

Redefining Leadership and Building Trust

Are leaders willing to adjust their perceptions of what constitutes an ideal workplace to acquire the best talent, or would they rather “settle” for candidates whose most qualifying trait was a willingness to physically come into the office? Will employers be happy with the result? Will these employees thrive and give 100%? How will customers feel about it?

How leaders answer these questions will have huge implications for the type of workforce that companies will be able to attract and retain. Ultimately, that will impact a company’s performance and its perception among customers.

Perhaps we’re on the cusp of redefining what it means to be a leader. When we talk about the return to normal, are we returning to the normal leadership we had in 2019, where managers strolled past desks to gauge work performance? Or, are we willing to create leaders who are more appropriate for the workforce of 2023? That is, leaders who view worker safety as a driving force behind decisions and who measure performance by more than just water cooler intangibles.

Business leaders are torn over which direction to go. But they also recognize that they aren’t going backward, either. Too much has changed to return to the business mindsets and strategic plans of 2019. What’s more, today's employees are too nimble and too willing to wield their talent as a bargaining tool to fall back in line again. Certainly, leaders are keeping Zoom for virtual business meetings, but are they also restoring their travel budgets back to pre-pandemic levels? If they want it both ways, certainly their employees do, too.

And with that comes some trust.

Any leader who demands that workers return to the office and the pre-pandemic way of working should be prepared to answer some tough questions about why a return to office is necessary, the toughest of which won’t have to do with work culture or personal growth.

For many employees, their fate will be determined by the answer to one simple question: If you trusted me once before, and I didn’t let you down, why can’t you trust me now?

 

Ian Williamson is the dean of the Paul Merage School of Business at the University of California, Irvine. He is a globally recognized expert in the area of human resource management and has assisted executives in more than 20 countries across six continents enhance firm operational and financial outcomes, improve talent recruitment and retention, enhance firm innovation, and understand the impact of social issues on firm outcomes. Williamson received his doctorate from the University of North Carolina at Chapel Hill and a bachelor’s degree in business from Miami University.

About The Paul Merage School of Business

The UCI Paul Merage School of Business offers three dynamic MBA programs – plus PhD, specialty masters and undergraduate business degrees – that prepare business leaders for our digitally driven world. Through our programs, students acquire the exceptional ability to grow their organizations through strategic innovation, analytical decision-making, digital information technology and collaborative execution. While the Merage School is relatively young, it has quickly grown to rank consistently among the top five percent of all business programs worldwide through exceptional student recruitment, world-class faculty, a strong alumni network and close relationships with both individual business executives and global corporations. Additional information is available at merage.uci.edu.

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