Employees hold the Balance of Power – Part 1

In this two-part Blog, I discuss how the balance of power in business has shifted from employer to employee post-pandemic. In Part 1, I outline the changes and factors leading to the balance of power shifting. In Part 2, I workshop what business owners (employers) can do to tackle this shift in the balance of power.

Prior to the pandemic, employers had held the balance of power over employees. There had been no real wages growth for 8-10 years and Australia was close to full employment.

During the pandemic, and post-pandemic, there were emerging factors that have led to there being a shift in the balance of power.

Now employees have their hand on the tiller and are controlling the agenda.

What has changed?

So many changes have occurred during the last two years including:

  • COVID-19 lockdowns

  • Working from home required (lockdowns)

  • Working from home conditions changed (post-pandemic)

  • Industry/sector shutdowns

  • Scarcity of labour in all industries

  • Skills shortage

  • Migration from large cities and metropolitan areas to regional and country areas being the sea-change & tree-change phenomena (including net negative migration in Victoria)

  • Border closures

  • Significant reduction in overseas students

  • Significant reduction in working visas

  • Vocational career change

  • Training & development ceased or significantly reduced

  • Workers finding easier ways to make a living

  • Employees reflecting on career and work/life balance including factors such as daily commute, attending a centralized office/factory daily and working hours

  • Employees more open to change as a result of lockdowns, changing working conditions and a shift in the traditional employment paradigm

What factors have arisen because of these changes?

Changes out of the pandemic have led to new and emerging factors including:

  • Employers grappling with introducing suitable virtual work models between physical attendance at business locations and working from home

  • Employees being offered significant pay rises to change jobs (up to 30% in some cases)

  • Employees being able to change vocation more easily

  • Employees have greater expectations around flexible working conditions

  • Employees seeking to work from home on a full-time basis

  • Employees seeking better terms and working conditions

  • Retention of talent is more challenging with a more transient workforce

  • Punctuality and attendance have been an issue with many employers

  • Difficulties faced by employers in replacing departing employees with new employees

  • Incumbent continuing employees complaining of being overworked because of labour shortage

  • Employers noting that employee demands becoming ever greater

  • Employers finding it hard to measure productivity under new virtual work models

  • Leadership noting difficulties in clarity of messaging to teams

  • Managers reporting a struggle to manage teams and individuals remotely  

  • Reported decline in knowledge transfer and training

  • Reports of reduction in incidental information sharing between employees/teams a as result of remote work model

  • Induction of new employees reported to be more difficult under remote working conditions

  • Professional development reported to be weaker as ‘on-the-job’ training not as strong as junior employees not sitting shoulder-to-shoulder with their managers and co-workers

  • Less mentoring is occurring through remote work model

  • Morale and culture reported to be weakening as teams are spending less time together in-person

  • Employers concerned over future career progression and promotion as employee development is not considered as fast-tracked as working together in central business location (For example, a Graduate needs strong hands-on guidance, supervision and direction in early working life)

There simply are so many challenges that both employees and employers face now.

With the balance of power shifting from employer to employee, business owners must now hustle to keep their teams intact and productive.

Business owners must now protect their businesses like never before in recent memory.

In part 2 of this Blog, I will extend this discussion to what business owners (employers) can do to overcome these massive challenges.

 

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Email me at darren@darrenkbourke.com to schedule a meeting (at no cost or obligation) to discuss how I can help you, your business and your team this year.