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The battle for talent: Workers have an edge over employers as the pandemic wanes

June 7, 2021, 2:30 PM UTC
EMP.0721.Battle for Talent
Illustration by Selman Design

Americans experienced a magnitude of job loss in March and April of 2020 not seen since World War II. Early in the crisis, economists at the Bureau of Labor Statistics earnestly wrote that there was hope that “with government support, employers and employees could quickly return to pre-pandemic employment arrangements.”

Now we know better. 

People are vaccinated, offices are reopening, mask mandates are lifted. But workers are making it clear that they expect something more than a “return” to the status quo ante-COVID. Instead, many are hunting for better opportunities, and companies face an intensifying war for talent—to retain and appease current employees and woo the best of the seekers.

In the initial days of the pandemic, employers held the upper hand, as workers of the world united in fear and paralysis. The seesaw teetered, though, as the crisis continued. Expanded unemployment benefits and eviction moratoriums made people feel less insecure about losing work; employers’ work-from-anywhere flexibility gave a sense of leverage to those who stayed. After millions of women left the workforce, thanks to school schedules and the boss’s Zoom invites being so out of whack, employers began offering tutoring, childcare assistance, and mental-health support. We have yet to see how much of it will persist after the pandemic, but it all helped recalibrate employees’ expectations.

Jed Kolko, chief economist of Indeed, notes that the labor market never became “un-tight” in the pandemic: The number of unemployed people per job opening rose only modestly, and wage gains remained strong. People furloughed or in uncertain job situations weren’t as likely to be searching. Now it feels as if everyone is. More than a quarter of currently employed Americans are looking for a new job, according to a Prudential Financial survey—leaving companies to sprint to make up for their sins of the past year, from furloughs to frozen salaries to Friday afternoon strategy sessions (why?).

“We’re on the cusp of a significant change,” says Meredith Perez, cofounder of job-hunting platform UCandu. “We’re coming from a postindustrialized situation where people were seen as cogs in the wheel. Now experience and intellect are valued, but business policy hasn’t really caught up yet.” 

It’s not hard to locate the roots of current dissatisfaction. Laszlo Bock, cofounder and CEO of Humu, a tech company that sends “nudges” to managers to modify their behavior, rattles them off. “People will likely conflate having felt badly over the last year with their workplaces and want a fresh start,” says Bock, a former head of Google’s people operations. “Promotion was on hold at many organizations, so people may feel they need to go somewhere else to advance. People will have spent over a year apart from their teams and feel less embedded in their organizations, making it easier to leave.”

26%

SHARE OF CURRENTLY EMPLOYED WORKERS WHO PLAN TO LOOK FOR A NEW JOB AS THE PANDEMIC EASES

8.1 million

U.S. JOB OPENINGS AS OF MARCH 2021. SOURCES: PRUDENTIAL FINANCIAL; BUREAU OF LABOR STATISTICS

Existentialism is also driving the antsiness. We have just come out of a period of making life-and-death decisions, losing loved ones along the way as a constant reminder of what actually matters. One-third of Americans know someone who died of COVID-19. The pandemic “was a thief in the night that just came and stole our sense of what is familiar,” says Robin Smith, a prominent Philadelphia psychologist. “We may not have felt good about how we were overworking. We were underpaid and under-acknowledged.” But compared with the disorientation of the pandemic, she adds, “That was familiar.”

Over time, embracing the unfamiliar has grown more comfortable for many. Taronay Roohafzaii, 26, says her “kick-start moment” actually came before the pandemic. Then a data analytics consultant at EY, she felt less than enthusiastic about new projects and wanted to pivot to product management. It was during the COVID-19 lockdown, though, that she finally acted. She concentrated on networking and enrolled in courses through Zeit, a career-discovery platform. Roohafzaii recently landed a job as a product manager for a fintech startup called Amount. In late May, she flew from her home in northern Virginia to Chicago to meet colleagues in person for the first time. She might relocate, she might not, but she credits the pandemic experience for getting her to move in the professional sense. “I don’t know if I would have made the jump to product otherwise,” says Roohafzaii. “The pandemic brought uncertainties, but also opportunities.”

It’s not too late for employers to act; the question is where to start. One of the opportunities that employees prize most is the chance to keep working from home. In the Prudential Financial survey, 42% of current remote workers said that if their company doesn’t keep offering remote options, they’ll look for a job that does. Professionals surveyed recently for LinkedIn’s Workforce Confidence Index rated flexibility as more important than salary, benefits, or company culture. In late April and May, nearly a quarter of all job applications on LinkedIn were for jobs explicitly advertised as being remote—up from 7% at the same time last year. (For Fortune 500 CEOs’ take on remote work, see our survey in this issue.)

As many job-hoppers already know, there’s no better time to negotiate bumps in salary, perks, or location as when negotiating for a new job. The pandemic broadened benefits programs to include work-from-home stipends, weekly yoga or meditation classes, as well as access to therapists and emergency funds. 

We do all this work to understand our customers. Why don’t we apply the same level of understanding to our people?

Meredith Perez, cofounder of job-hunting platform UCandu

But one of the greatest rewards managers can give employees is free: their gratitude. According to workplace consultant O.C. Tanner’s research, 79% of employees who quit their jobs say a lack of appreciation was a major reason for leaving. Studies also show workers are more motivated by recognition than money. Autonomy and a sense of self-direction matter too. After recently consulting with managers in the automotive industry, Bock recounts one leader’s Management 101 epiphany: “I should ask people what projects they want to work on.”

Another challenge for employers will be to connect individual actions to a company’s broader values and mission, says Hana Hassan, founder and CEO of Blackmaple.io, a global talent marketplace. “By default, organizations are always about scale and numbers, not human capital as humans first,” Hassan says. A better way to frame a recruiting message, she suggests, is, “Here are these great people who built this great product, who built this great company.” Bock advises managers to lean into employees’ desire for purpose, coming up with clear answers to questions like, “Why does your team exist? How does their work impact others?”

The social justice movements of the past year are also shaping workers’ desires. Workforces are demanding not just more diverse ranks in leadership and hiring, but also more empathy, compassion, and understanding. They are unforgiving of hypocrisy and quick to call it out, in meetings or on social media. With HR and PR crises looming, more companies are trying to emphasize vulnerability in leadership and greater access than before. “We do all this work to understand our customers,” says Perez of UCandu. “Why don’t we apply the same level of understanding to our people?” 

In the race for talent, every move right now has outsize importance. Bock says that “imprintable moments” that make lasting impressions on a company’s culture “happen a few times in a person’s career: starting a brand-new job, the first time you become a manager.” The return to work after the pandemic, he adds, will be another. 

This article appears in the June/July 2021 issue of Fortune with the headline, “The battle for talent.”

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