Change comes in all shapes and sizes—from slow and steady to sudden and seismic. While most leaders would prefer the former, we have seen a few of the latter over the past 25 years, including the internet boom of the late 1990s, the financial crisis of 2007-2008 and the COVID pandemic.
The internet boom heralded a period of upheaval and opportunity that helped shape not only new industries, but also the way almost every business operates today. Similarly, the financial crisis reshaped much of our financial system, changing the way capital flows throughout our economy. While those two chapters of our history have already been written, the book has not yet been closed on the pandemic.
While many businesses have returned to some state of normalcy, the tight labor market has shifted the balance of power from the employer to the employee, creating new challenges for leaders. Employees expect—and in some cases, demand—more transparency, more flexibility, and more pay. If they do not get it, they vote with their feet.
While today’s circumstances are unique, there are some striking similarities to the internet bubble. During that period, employees in the technology industry had much more leverage than employers, forcing employers to find new ways to attract and retain talent. Techniques used included more flexibility, remote work, increased perks, and higher pay. Sound familiar?
That period was followed by higher interest rates, a pullback in financial markets, a recession, and loosening in the labor market, all of which shifted the balance of power back to the employer. While that shift resulted in a deflation of the compensation bubble and a reduction in remote work, remnants of that era remain.
If we follow a similar pattern this time around, the next normal will not be “new;” it will be refurbished, reflecting a mix of the old and the new. Technologies like Zoom and Microsoft Teams—which were around well before the pandemic—will be with us until something even better emerges, reducing wasted time on the road. As labor markets loosen, employers will place much more emphasis on finding ways for employees to work together—something that is critical for development—while still providing more flexibility than they did before the pandemic. And while employers have been talking about work-life balance for more than a decade, we will see some real progress driven in part by the focus on mental health that boiled over during the height of the pandemic. On balance, these outcomes would be good news for both employers and employees.
All of that being said, today presents a unique opportunity for leaders to set their companies up for success in a post-pandemic world. A great place to start is by focusing on the things we all have in common. Everyone takes pride in a job well done, so leaders should challenge employees to stretch their skills and provide them with the tools they need to succeed. Additionally, employees want to find meaning in their work, so management should take the time to illustrate the tangible ways a company’s output impacts its customers. Finally, we are all wired to value relationships, which in and of themselves provide meaning. If leaders find a way to create in-person events to help build those relationships, then employees will want to return just as much as management teams want them to.
Efforts like all of these are hard—much harder than a mandate—but leaders who put in the hard work will find themselves with not only a healthy, loyal workforce, but one that will serve a strong foundation for their business for years to come.