(American Management Association Quarterly Column)
By Jeffrey Dunn
So this morning, the morning of August 27th, 2018, I looked up the U.S. unemployment rate. According the United States Department of Labor, the unemployment rate for July 2018 was 3.9 percent, down from 4.0 percent in June. The numbers for April and May of this year were 3.9 percent and 3.8 percent respectively. This means that essentially everyone who wants a job has a job, and employers have to dig to find and successfully recruit top-notch employees. This is good news for employees, but bad news for employers – especially employers who want to grow their workforces to meet the demands of a rapidly expanding national economy.
It’s a job seekers market. And the job seekers of today are different in many ways than those of the past. It’s no secret that millennials are the largest generation in the labor force, a ranking that generation seized in 2016. Gen X is close behind. With a combined total of just more than 110 million in the workforce today, these two demographic groups dwarf the rapidly shrinking Baby Boom generation which currently accounts for 40 million workers. That 70 million worker gap is only going to rise as more and more Boomers retire each day.
Who Are These Employees?
The demographic morphing of the workplace means the workers of today have values, expectations and priorities related to their careers and the businesses and organizations for whom they work, many of which are directly tied to corporate culture. From personal observation and reading countless studies of generational differences in the workplace, I’ve found the following key differences between generations in the workplace are:
• Baby Boomers are viewed as far more reserved in their communications, while millennials strongly favored collaborative and in-person interactions.
• Millennials relate far better to a coaching style of management than a traditional authoritative or top-down management style.
• Gen Xers and Millennials tend to hold the view that change brings opportunity and don’t view it as a threat to stability.
• Gen Xers and Millennials are more fulfilled when working as part of a team (even if an individual is a member of several different teams working on various projects) than working solo on repetitive type tasks, whereas Baby Boomers take the view that “it’s part of the job.”
• Gen Xers and Millennials have a need to see their individual or team work in the full context of the organization’s goals. Boomers and members of The Silent Generation (there are still some in the workplace) tend to be comfortable knowing their role, understanding their task and executing it with little question.
• The idea of doing work that is meaningful or having a positive impact on the community is important to the younger generations. This doesn’t mean Boomers have no interest in community service; it just means they tend to separate work community involvement.
• Gen X and especially Millennials strongly prefer to be valued as people first and employees second. They expect their efforts and expertise to be appreciated by their managers and/or employers.
• While Boomers often have the expectation they will remain with an employer for decades, members of Gen X and Millennials have no such expectation and are comfortable moving from employer to employer.
• The younger generations are more comfortable with adapting to not only new employers, but shifts in job tasks.
In short, significantly more than half of today’s workforce has specific, high expectations of their employers/workplace culture, need to be valued and appreciated, and are absolutely comfortable with changing employers or careers if their expectations aren’t met.
In an economy with a unemployment rate below 4 percent, organizations that understand this land top employees and often have their pick of excellent applicants, while those that don’t can have tremendous problems with recruiting. And with tools such as Glassdoor and LinkedIn, readily available, job seekers can – and do – find out in seconds everything they need to know about a company’s culture. And don’t forget, your clients and prospective clients are also looking at your culture (more on that in a future column). The questions then are:
• “How would you describe your company’s culture?”
• “What are people saying about the workplace you have fostered?”
• “Would you recognize a problem or problems with your company’s culture?”
Today, I’m going to help you answer those questions.
Look in the Mirror
Given the rapidly changing demographics of today’s workforce and the highly competitive nature of not just the American economy but the world economy, organizations who value hiring top employees have no choice but to do a thorough, honest, self-assessment of their culture and determine if this culture is helping or hurting their recruiting efforts.
My law firm did precisely that five years ago. Certainly, we found we had some core strengths, strengths that had brought us a great measure of success. We had an excellent focus on client service. We had a large number of exceptionally talented lawyers who achieved outstanding results for our clients. Our staff featured a high proportion of dedicated, experienced and skilled professionals who supported our lawyers extremely well. We were a very good law firm.
But were we a great place to work? The more we talked to people, the more we looked in the mirror, the more we listened, the more we realized we had room for improvement. Stress was high. Lawyers too often put undue stress and unreasonable expectations on staff. Younger lawyers often felt the more senior lawyers were not respectful. The list goes on. But the point was, we had room for improvement, especially considering our commitment to growing the firm significantly and our recognition of the fact that the expectations of younger workers – and those of our clients – were changing.
We asked nearly every member of the firm a series of questions and the answers to those questions helped us see not where we needed to improve, but that we needed to improve. Does your organization’s need to improve? Ask yourself the following questions and you’ll likely have a better idea as to whether your organization’s culture needs to improve:
• Approximately what percentage of your company’s workforce leaves in a given year? Check your employee turnover percentages from year to year; if they’re rising, you may well have a culture problem.
• How often do your CEO or do members of senior management meet with your rank and file employees? Gen Xers and Millennials derive great satisfaction from being heard by senior management.
• Does your company perform 360 evaluations on all members of the company, including senior management? 360 evaluations foster an egalitarian element of an organization’s culture, an element that younger workers often value greatly as it makes them feel valued by leadership.
• How often do members of your company, from entry level employees to senior leadership, discuss your company’s culture? Talking about culture shows building a positive culture is an organizational value and priority.
• How often do your company’s leaders talk about work-life balance? Have they enacted policies that increase work-life balance and flexibility? Study after study shows that Gen Xers and Millennials value work-life balance. They don’t oppose hard work, but they believe in the flexibility to manage their work and their lives in the ways that work best for them, while not hurting the organization.
• Does your company have a large number of managers, but few leaders? If your organization doesn’t understand the difference between a manager and a leader, trouble awaits.
• Is it not unusual for one of your company’s leaders to lose his or her temper? Explosions of temper by leaders do lasting damage to your culture.
• Do your company’s leaders and rank and file employees interact informally? For example, conversations in the hallway, sitting at the same table at firm events, etc.? Informal interaction leads to more honest and productive on the job interaction. And effective on the job communication gives senior leaders insights they never could attain otherwise.
• Is there a mass exodus of employees heading to the parking garage at precisely 5:00 p.m.? Nothing says “I’m glad to get out of that place” quite like a 5 p.m. traffic jam in the parking garage.
• Do employees regularly miss company events or celebrations because they are “too busy”? This is a sign that employees want as little to do with the organization and its leaders as possible.
• Do your employees refer friends, former colleagues, acquaintances, etc., to apply for positions within your organizations? If not, it’s a good sign your culture is a problem.
• Do your employees fear taking risks and are reluctant to strive for innovative solutions to problems? This is a sure sign your organization either doesn’t appreciate innovation – a true company killer – or that employees feel they aren’t heard or are getting excessive negative feedback for taking the initiative in problem solving.
• Does senior management seem genuinely surprised when top performers leave the organization? This means if you have a culture problem, it’s only getting worse because leadership doesn’t see it.
• Does the organization’s senior management fail to address ongoing problems? Are the same issues being brought to senior management over and over again? Obviously, issues viewed as chronic and never addressed by senior management lead employees to deduce management doesn’t care about them.
• Do people in your organization treat others with an understanding that people perceive events and actions differently? If not, your culture may not value empathy. And that will only lead to negativity.
• Do people in the organization feel comfortable reporting inappropriate behavior? The tolerance of bad behavior will manifest itself in high turnover, difficulty in hiring, a bad reputation with clients and lawsuits. It’s also inexcusable in the #metoo era.
• Does the organization provide training regarding cultural aspects of the organization? This is central to all employees not just feeling, but understanding they are valued. A winning organization draws talent from all potential sources and part of that is making employees of all backgrounds feel understood and welcomed.
• Do all members know the goals/mission of the firm/organization? Member of today’s workforce values understanding the full scope of their organization, and understanding how they fit into the organization creates tremendous job satisfaction.
• Do your employees say, “That’s not my job?” This attitude can be evidence employees either never “tuned in” to their organization or have become frustrated and have psychologically “bailed out.”
• Do employees voluntarily help others without being told to do so? The exact converse of Question 19, employees who take the initiative to help coworkers show they understand the “big picture” mission and value the success of the entire organization, and have empathy for coworkers, all signs of a positive culture.
What it all Means
More than a few wrong answers to the above means your business or organization has problems that may need to be addressed sooner than later. Negativity, once rooted in a culture, tends to grow much more quickly than does positivity. Fixing a bad culture takes tremendous time and resources. It also hurts recruiting.
At my firm we developed a top to bottom culture initiative built on the foundation of ten core Firm Values. And those values weren’t buried in our website and then printed on one plaque in one conference room. Instead, every desk in the firm features a small sign with our Firm Values. The Firm Values are an integral part of our recruiting process; candidates who won’t “fit” aren’t hired. Every new member meets with our President and CEO or a member of senior management first thing in the morning on their first day with the firm, and our Firm Values are front and center in the conversation. We have a Firm Values committee that goes through “Values Champion” nominations and evaluates which firm members best live our values. And adherence to our Firm Values is part of every members annual 360 evaluation and is a part of compensation. And yes, members – at any level – who don’t demonstrate our Firm Values may be negatively impacted in their compensation.
Five years after developing this initiative, we have completely changed our culture and our firm has prospered. We have nearly doubled in size, from both headcount and revenue points of view. And this spring we were a finalist for a “Best Places to Work” award, an award which we’d never even considered pursuing.
Are we finished? Have we developed a new culture? No, not completely. When it comes to culture and developing a continuing, positive culture, I don’t believe the work is ever done. You must always seek to improve. You must always realize the competition is trying to improve. And if you want to retain your best people, attract top talent, and keep your valued clients, you’ll keep chasing the perfect, yet unattainable, culture.
Jeff Dunn is a Shareholder with Sandberg Phoenix & von Gontard P.C. in St. Louis, Missouri. With nearly 20 years’ experience as a litigator, Jeff is leads the firm’s Values initiative, is a member of the firm’s Executive Committee, the former leader of the Health Care Services Practice Group and is a frequent speaker on law firm and corporate culture issues. He can be reached at 314-446-4245 or jdunn@sandbergphoenix.com