Whether you believe in the rise of the “gig” economy or not, the reality of today’s business environment is that it is inexorably continuing to impact the very foundations of the employee-employer relationship. While some would argue that today’s employers are increasingly in a better negotiating position versus employees, I would state that it is the complete opposite.
Why is that? The argument that employers are increasingly in a powerful position as they eliminate human based roles thanks to automation and artificial intelligence can easily be flipped to benefit rare and increasingly valuable employees. How?
The reality is that while employers can exclusively focus on reducing personnel costs with respect to tasks and roles that are repeatable and automatable, the increasing need for rare, high performing and adaptable individuals means that negotiating power, in certain instances, has shifted increasingly in favor of the individual.
Why is this shifting power dynamic relevant to entrepreneurs in the here and now when they have immediate concerns such as cash flow management? The simple reality is that regardless of how “automatable” roles may be in the future, the impact of higher turnover rates will negatively impact the ability of businesses to grow and expand in the short term. This is of particular concern to smaller businesses such as startups where the loss of one key individual may cripple the growth ability of a startup.
Many would argue that maintaining staff is easy and it merely comes down to finding the right price point at which an individual will stay and the Millennial phenomena of leaving for “better experiences” is a fad. I actually would argue the exact opposite is happening and individuals across generational segments are adopting the “better experiences” fad for a number of reasons including:
(1) A Lack of Faith in the Current Economic System: Even in high performing cities such as San Francisco and New York City, there is an increasingly sense among well compensated high tech professionals that they are merely “treading water” and not really getting ahead financially or intellectually. As such, they are constantly “hustling” from role to another, looking for that “golden ticket” to move them away from “treading water” to a path that allows them better flexibility and control.
(2) “I Know My Job Is Automatable So Why Am I Doing This Again?”: With everyone being bombarded with media posts concerning how their job is at risk of automation, it no wonder why individuals are seriously considering their options to ensure they aren’t part of the next batch of individuals who are laid off due to automation.
(3) “Why Am I Not Doing What I Want to Do with My Life Again?”: The previous social contract between employers and employees enjoyed by the “Greatest Generation” is increasingly defunct. Increasingly, for many, there are no guaranteed wages or employment terms and the work that they are doing provides limited intellectual stimulation.
As such, many are reconsidering what they are doing with their supposed “careers” and exploring more fulfilling alternatives. These alternatives increasingly put the traditional concept of work as secondary with fulfilling personal goals as primary. For example, numerous individuals are traveling the world while taking occasional contract work to continue to fund their nomadic lifestyles.
Entrepreneurs, of course, are stuck between a rock and a hard place. On one hand, the desired high performing individuals they need to grow their businesses are demanding “better experiences”. On the other, is the plain economic reality that businesses need to get things done to grow including mundane and boring tasks. So what are entrepreneurs to do?
Unfortunately, for entrepreneurs, there are no simple answers. The reality is that there is no defined methodology that will make all parties happy. We’re in the midst of a great socio-economic upheaval that is changing on a daily if not hourly basis.
That being said, however, there are some principles that entrepreneurs can think of adopting to keep their high value employees happy. These principles include:
(1) Stop Treating Your Employees Like Widgets: The most critical action that employers can do today is to stop treating their employees like widgets. We’ve all encountered those organizations that treat their employees as “fungible resources”. These are the organizations that fail to understand that people aren’t computers and that working them 18 hours a day for pittance wages is not the best way to build a high performing organization.
If you want your employees to develop the next multi-million dollar idea or concept, you have to give them the emotional and intellectual foundation to do so. This means building a work environment that encourages healthy communication and expression and acknowledges that everyone has something to contribute from the CEO down to the newly arrived programmer.
(2) Find Ways to Get Employees Off the Hamster Wheel: The compensation “arms race” is one that ultimately everyone, both employers and employees, are losing. As wages increase across the board, employers lose thanks to rising personnel costs while employees lose as their cost of living increases even as their wages rise.
To get away from the compensation “arms race”, we need to seriously start rethinking what we mean in terms of financial compensation. It could be everything from helping employees address costs such as student loans through employee benefit platform like Gradifi. Gradifi enables employers to offer a 401K like matching program to their employees to pay off their student loans. Such programs not only address the core costs that employees need to manage but potentially allow employers to further build employee loyalty.
(3) Find Ways to Intellectually Simulate Your Employees: While ever employer is always constantly looking for the “super star” to be able to do everything that is required of their role perfectly, employers constantly forget that “super stars” aren’t widgets and require intellectual stimulation to prevent boredom. Even the most lackadaisical employee gets bored of doing the most repetitive tasks after a sufficient period of time.
To prevent this, employers need to find ways to structure their organizations to enable mobility within not only their broader organizational structure but within individual roles as well to ensure that their employees remain intellectually stimulated. Indeed, this constant intellectual stimulation addresses the other perpetual need of employers which is for adaptable and flexible employees.
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