How socioeconomics is impacting your workforce: What every leader should know
History has shown that in uncertain times, social and economic factors impact the workforce at high levels. As personal and professional begin to overlap for most employees — these outside factors will evolve what’s important to them. It’s critical that every leader be aware and understand the impacts of the current economy and social environment on their employees — and how to maintain performance, engagement and motivation in this new world.
What is socioeconomics?
Socioeconomics is the study of social sciences that seeks to understand how economic activity affects and is shaped by social processes. In general, it analyzes how modern societies progress, stagnate or regress because of their local, regional, or global economy.
There are five socioeconomic factors:
- Social status
- Social expectations
- Job security
- Economic safety
- Social responsibility
All carry equal individual and united weight in relation to impact, but when looking strictly at the effects on workforces – two outshine the others: job security and social responsibility. In this article, we will focus on the impact on, integration with, and rising importance of these two factors in relation to performance and engagement.
Job security: The impact on safety and security
We know that job security is on the minds of people nationally and globally. While some organizations are thriving, others are merely surviving. In June, U.S. Bureau of Labor Statistics reported that 40.4m people had been unable to work at any point in the last four weeks because their employer closed or lost business due to the coronavirus pandemic, which is a total of 16% of the civilian noninstructional population.
Approximately 28% of those people were unemployed at some point in the four weeks surveyed. With numbers like these, it’s no surprise that job security is at the top of many people’s minds – and is directly impacting the workforce.
How leaders can take action
Having a compelling vision of the future and high trust and confidence in leadership rise to the top as directly impacting the feeling, or concern, of stability and security.
Leaders who can reinforce a future vision and a sense of belonging in their employees can minimize these fears and see engagement and ownership in the organization rise.
This is not only done through effective communication, but also effective listening – reinforcing to employees that they have a voice and that what they feel and say matters.
In fact, in a world full of crisis and unrest, it’s never been more critical. It’s no longer just about “the company” for employees – it’s about “my company, my life, my family, and my fears.” There is a tangled web of emotions and factors at play for employees, and the complicated part is that every one of them is different. Each is experiencing different impacts, different choices, and different experiences – so each has to be considered separately, as well as a whole, for leaders to be effective.
Effective communication in practice
WSA has seen the results of effective listening, communication and leadership visibility across our customers’ workforces. For example, a prominent Midwest banking institution who made it a priority to communicate around safety measures, future actions and make themselves more visible during the crisis increased pride in the organization by 7%, and overall engagement by 7%, despite the uncertain times. In fact, engagement increased by 5% pre-and-post pandemic as the survey spanned the onset of the initial stages of the global health crisis.
Balancing precautions to make employees feel safe
Safety plays into trust in leadership in larger numbers than we have ever seen previously and deserves to be mentioned as a critical piece of the equation. Traditionally, safety was a concern for certain industries and departments, i.e., manufacturing and healthcare. But in today’s new world it is important across all industries and all job families. And, a balance must be struck by leaders.
Too many precautions cause fear. Too few precautions cause anxiety and angst. The balance must be found and flexed as new dangers or new safety measures are developed. Organizations must take into account not only the safety of their employees but the perception they have of their own safety due to customers’ behaviors. We cannot control what customers say, do, or how they act, but we must take our best efforts to ensure employees feel like leaders have their best interest at heart when dealing with customers.
A large resort that sent employees home during the rise of the pandemic and is introducing all employees and teams back to the workforce uncovered their employees’ worst fears around safety. Employees were worried about contact with others–employees and customers alike. In turn, they surveyed their employees to ask them what measures they would like to see taken. It’s not a guessing game–it’s a science. Done the right way your employees will lead you in the direction of engagement, motivation and performance. As leaders, we just have to listen effectively.
Social responsibility: Diversity, equity and inclusion (DEI)
Social responsibility is more complicated for organizations. There has been a call for organizations to be better corporate citizens, which in the past has referred to how it interacted and embedded itself in society or communities. This is being expanded to include internal Diversity and Inclusion efforts. Senior leadership must take the lead here, but it is up to leadership at all levels to implement.
How leaders can take action
Diversity, equity and inclusion should begin with data. Simply looking at the numbers can reveal critical insights such as:
- What are the workforce demographics overall and by departments, teams, and job level?
- How are promotions determined?
- How does that compare to the applicant population?
- Who gets growth opportunities?
- What is the demographic profile of the lowest and highest paid people?
If data uncovers areas to explore, companies should move carefully and deliberately – you get one shot to get it right. WSA has seen organizations attempt and succeed, and others attempt and fail.
Those who succeed do so because the foundation for the efforts is strong, including:
- A clear focus, ownership and mandate from leadership
- The data being used is the right and correct data to evaluate
- The right people have been incorporated into the efforts
- There is accountability on actions and outcomes
DEI efforts essentially have two pieces, 1) the overall executive and senior leadership team needs to commit to the efforts and 2) leaders need to not only act, but communicate clearly to the workforce on the importance of DEI to the success of the organization.
Leaders need to do more than talk about it. They should establish criteria against which the organization can measure its success to be reported regularly in leadership meetings because we know that what gets measured, gets managed.
True DEI is when employees feel they are all treated as individuals, regardless of age, race, gender, sexual orientation, religion, or other attributes. It’s when employees feel they can be their authentic selves at work.
Time to take action
It’s the first time in many years that we have seen socioeconomic factors impacting the workforce in such critical ways. As leaders, we have to stand up and pay attention. As organizations, we must be aware and formulate a plan forward. The world and the workforce are watching and waiting. For help on managing these impacts across your organization, visit https://workforcescience.com/
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