By Jared Lindzon* – Feb 2022
According to an Edelman Trust Barometer report, employers are increasingly ranking employees ahead of other groups as the most important stakeholders for achieving long-term success. Forty per cent of employers surveyed ranked employees as most important, compared with 34 per cent who prioritized customers and clients. Another 14 per cent put their community first, while 12 per cent indicated shareholders are their top priority.
This marks a clear shift in priorities during the pandemic period: In a Jan. 2020 edition of the study, 40 per cent of business leaders indicated that their most important stakeholders were customers and clients, while 37 per cent put employees first.
“Pre-pandemic was the last point in time when customers were considered the most important stakeholder,” said Lisa Kimmel, president and CEO of Edelman Canada. “We’re living through a fundamental shift in dynamic, with employees having much more power than they’ve ever had before.”
Recent trends, such as new employee priorities and expectations, as well as widespread talent shortages due to the pandemic, have allowed employees to edge out other stakeholders, according to Ms. Kimmel. While the impetuses of this transition are relatively new, she emphasizes that the power dynamic was already in the process of evolving prior to the pandemic.
“Even if the economy cools off, I think the changes that we’re seeing in terms of the employer-employee dynamic will have changed forever in many ways,” she said.
Ms. Kimmel adds that as faith in other public institutions – including government, media, and non-government organizations – continues to decline, employees are increasingly looking to their employers to serve as agents of societal change and to champion their values. According to the report, 59 per cent of those who are currently changing jobs are seeking an employer that better aligns with their values, compared to 31 per cent who are leaving for better compensation or career advancement.
“They want to ensure their personal values are aligned to those of the company,” Ms. Kimmel said. “If their values match those of their employer, they’re going to be highly engaged, they’re going to advocate on behalf of the company and they’re going to be loyal to the organization.”
The study suggests that employers are also considering how their decisions will impact employee sentiment and satisfaction. According to Ian Cook, the vice president of Analytics for Visier, a Vancouver-based people analytics firm, the trend represents a significant transition in how businesses make decisions.
Mr. Cook explains that organizations traditionally operated as finance-centric, and made decisions primarily based on the bottom line. More recently, many shifted toward a customer-centric model, using metrics like customer satisfaction and engagement to benchmark company performance. Now, he says, we’ve entered a new people-centric era of work, where employees have more agency over how they achieve results.
Mr. Cook also points to a recent letter published by Larry Fink, the chairman and CEO of BlackRock, considered among the most influential investment management companies in the world, as acknowledgment of this transition within the business community at large. “Companies not adjusting to this new reality and responding to their workers do so at their own peril,” Mr. Fink writes.
There are limits, however, to how much power and control business leaders are willing to relinquish to their staff. While many are giving employees more control over when and where they work, most decisions regarding company priorities and culture are still made at the top.
“We’re still facing organizations that are quite bureaucratic, quite centralized, where the decision-making power is still in the hands of management and capital owners, much more than in the hands of employees,” said Tiziana Casciaro, a professor of organizational behaviour at the Rotman School of Management, and co-author of Power for All. “In that sense, the internal power has not changed all that much, it’s more external options that people are considering now that they were not considering before.”
Ms. Casciaro explains that employees now feel more empowered to leave organizations they feel are not making decisions that represent their values, but aren’t in a position to make those decisions themselves.
“That’s what people are demanding, but it is unclear to me that the leadership of companies is ready to provide that additional control, to shift it from their hands to the hands of employees,” she said. Whether or not that larger transition of decision-making power comes to fruition may depend on what happens after the disruptions of the pandemic ease.
“If that lingering feeling of needing more balance and autonomy and control over how I work remains vivid in us, employers will be forced to adopt new ways of organizing, new ways of distributing decision-making autonomy in the company,” she said. “Workers will not accept a return to a regime that the pandemic has exposed as broken.”
Matt Lundy is an economics reporter for The Globe and Mail’s Report on Business section.
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