Why the global job market now favours employees
Employees feel more confident than ever in the business environment and their ability to get a new job, giving them the upper hand in the labour market, according to CEB.
New data from the CEB Global Talent Monitor showed that global employee confidence in the economy reached 53.8 – its highest since Q1 2014 – while global job perceptions increased 1.2% globally. In fact, European employees' confidence in their personal job prospects, in particular, hit a six-year high in Q2 2017.
Despite employees believing they can secure new jobs in the current labour market, this has not translated into more consistent active job seeking across the globe. Employees are generally working harder and staying longer in their current roles.
Discretionary effort – employees going above and beyond – increased in every region in Q2 2017, with the exception of Asia, which remained flat. Likewise, intent to stay also increased, particularly in North America, which saw an almost 4.5 percentage point increase in employees who intend to stay with their employer.
While employees might be more committed to staying with their employers, and even working harder, they are not completely satisfied.
One reason is because employees are increasingly focused on getting respect in the workplace and ensuring they are treated fairly and respectfully by their employer. In fact, respect has moved up the list of attributes potential candidates consider when evaluating an employer and now ranks as one of the top five.
"Respect has been increasing in importance to employees, and now almost one-third of employees think about respect when considering an employer," said Brian Kropp, HR practice leader at CEB, which was earlier this year acquired by Gartner.
"Employees want to know how they, and their colleagues, are going to be treated by their employer. Given the very tight labour market – one where employees feel they are in control – workers will seek out new jobs if they feel disrespected in the workplace."
In addition to a growing emphasis on respect, employee expectations around merit increases are changing going into 2018. For the first time in several years, there has been a significant increase – almost one percentage point globally – in the expected annual raise year-on-year. Whereas this time last year, employees expected to hit almost 3% for their annual increase, the expectation is now a nearly 4% merit increase for 2018.
In such a labour market, this means employers and their HR departments must take several key actions to address the needs of their staff, avoid costly attrition and retain top talent.
When it comes to employees' desire for respect, CEB found that the best companies focus on:
- Looking at the values of the organisation and the principles it stands for and ensure that respect for employees is present.
- Making managers aware that the labour market has shifted and is now in employees' favour with respect as one of their top considerations; ensure managers practice candidate and employee care.
- Auditing systems and processes to determine if any violate the desire for respect among employees. Organisations need to answer the question: "Are we unintentionally demoralising employees?"
In the area of merit increase, the study recommended that employers can avoid an unpleasant experience at annual review time by benchmarking current merit increases to see if the organisation is aligned with employee expectations.