The past year has been a mixed bag for the American workforce. Inflation has cooled off, and a recession looks less likely. Companies are investing in their employees, resulting in higher levels of engagement and easing labor shortages. However, one-third of employees are still open to leaving their company as many people face financial challenges, and the impact of Generative AI has brought new stress over job security.
In Mercer’s 2023 – 2024 Inside Employees’ Minds© study, they identify five areas that companies can focus on to meet employees’ evolving expectations better.
Focus on Financial Security
Topping the list of employee concerns is financial security. Even with inflation slowing, short-term finances and long-term security remain an issue. Personal debt has risen over the past three years, even with less discretionary spending. To their credit, employers have taken steps to help. For example, healthcare deductibles and out-of-pocket maximums have remained constant since 2021. Suggested employer actions from the study:
- Develop a holistic financial well-being strategy
- Take advantage of Secure 2.0 provisions that can drive both short – and long-term financial security
- Start with affordability to drive health equity
Re-engineer Work for Wellness
Unsurprisingly, work-life balance continues to be a concern for employees. When asked how to support their mental health, employees cited more time off, reduced workloads, more flexibility, and better resources. Even with more access to mental health professionals, changing work practices could be as big or a more significant benefit to employees. Wellness is improving, with nearly 75% of employees feeling valued, empowered, and connected. However, 33% feel overwhelmed and frustrated. Suggested employer actions from the study:
- Assess employees’ behavioral health needs
- Reengineer work for wellness
- Assess the true impact of remote and hybrid work on productivity and collaboration
- Find ways to offer flexibility to hourly employees
- Evaluate and expand your paid leave program
Build Trust through Transparency
Compensation is still the top draw to a new organization and the main reason people stay. Pay transparency legislation gives employees more visibility into pay than ever before. Companies that are transparent in pay structures have employees with higher levels of engagement and retention and the potential to attract more top-level candidates to open roles. And it doesn’t end with pay, “improving career transparency starts with skills-based talent models…that create transparency around careers by providing employees with information on the skills they need to succeed in their current and future roles. Suggested employer actions from the study:
- Embed transparency into your talent philosophy
- Assess readiness for pay transparency
- Build the business case for expanding pay transparency
- Define your narrative around compensation
- Educate and empower career navigation through skills
Unlock Potential Through AI
Generative AI has moved beyond repetitive, rules-based work. As AI and ML evolve, employers seek to increase efficiency and productivity. As we’ve seen in the past, new technology tends to create more jobs than it eliminates. Employees surveyed are evenly split on the benefits vs concerns of AI technologies. It is early in the AI adoption cycle, as less than half of companies said they have started with AI initiatives. Suggested employer actions from the study:
- Be transparent in change management
- Engage employees in the process of redesigning work
- Reimagine ways of working
- Deconstruct critical and hard-to-fill roles
Embrace Values for Impact
Environmental, social, and governance (ESG) issues matter to employees. Living wages carried the most support, with 84% of respondents saying it is important. However, only 21% of companies have aligned their compensation strategies to living wages. Other values mentioned include diversity, equity, and inclusion (DEI), social justice, control over retirement plan investment options, and the impact of climate change on their health. Suggested employer actions from the study:
- Lead with your values
- Prepare your health program for the impact of climate change
- Support living wages by embracing new hourly pay strategies
- Provide sustainable investment options
Please read the full report for a more in-depth analysis of these five areas and the actions you, as a leader, can take. For more articles on the business and HR landscape, visit our blog.