Sam is an Australian based Non-Executive Director and former CEO. She chairs the Remuneration and People Committee at Newcastle Permanent.
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I find it fascinating that postpandemic is now being used as a single word. We are no longer living in an era that comes after Covid-19—post-pandemic—but in the Postpandemic Era. It’s a thing. It’s official.
Another thing that’s official is that businesses that look after their people properly are more productive and far better off in the long run. The science is in. There’s no need to discuss points of view or back them up with compelling arguments and statistics. This fact is universally acknowledged now.
This idea has been around for a long time, but Covid-19 certainly brought it to the fore. The dynamics between organizations and their people have been scrutinized like never before. It was essential to recalibrate workplace relations in order to get through the last three years, and of course, the outcomes have been astonishing. The attitudes and expectations of both directors and workers have shifted dramatically—in my opinion, for the better.
The carnage and misery notwithstanding, many positive things have resulted from the pandemic. This is one of them: Many companies now accept that it is no longer acceptable to do the bare minimum when it comes to employees. Actually, the preferred nomenclature now is people, rather than employees. Because that’s what the workers at an organization are: its people. And in the postpandemic world, they demand to be treated as people, and as individuals. Not as numbers. Not as dispensable.
In fact, in 2023 in Australia, people—far from being dispensable or replaceable—are in demand, in a big way. There’s a critical shortage of people. Arguably the number one dilemma for many businesses across the board is labor shortages.
The Australian Institute of Company Directors (AICD) regularly surveys Australian directors to ascertain what’s on their minds. Questions probe AICD members’ opinions mainly around national and international economies, government policies and regulations. A recent "Director Sentiment Index" survey by the AICD (conducted toward the end of 2022) revealed that labor shortages are the top concern for directors—60% agreed that the issue was the most critical economic challenge for businesses in 2023. They also indicated that they expect the situation to become increasingly difficult.
Interestingly, the survey figures suggest that most directors feel that the outlook for the Australian economy is still seen as fairly strong in comparison with the rest of the world. According to the DSI survey results, many Australian directors regard China as a cooling economy, Europe as unstable and the U.S. as a concern.
Issues identified as "keeping directors awake at night" in the current climate include cybercrime, the role of the Reserve Bank of Australia in fighting inflation and the need for trust in state and federal government. Also, advancing reconciliation with First Nations peoples is seen as a major governance priority for boards in this country.
But by far the stand-out story from this latest survey is widespread concern about ongoing labor shortages. A majority of directors expect that labor demands, as a business condition, will increase in the next 12 months. The consensus is that skilled migration levels are not keeping up with labor demand and that this will impact future growth.
However, the problem is obviously broader than simply worker shortages. The overarching issue here is our wider people and culture approach in this postpandemic age. As we know, things have changed; so how are we dealing with it?
Global Human Resources consultant Gartner advises that every business needs to reinvent its Employee Value Proposition (EVP). It proposes "The Human Deal," which orients toward employees as people, not workers; provides the attributes that are critical to that person’s life experience, not just work experience; and delivers a positive emotional response.
Gartner says that five key elements help us to clinch the human deal:
• Deeper Connections: build inclusion, focus on families, improve trust
• Radical Flexibility: give people more choices, adjust roles and activities, find manager-tested ways to scale flexible work practices.
• Personal Growth: provide career coaching, empower employees to design their own development
• Holistic Well-Being: hold employees accountable for their own well-being, reduce the stigma around well-being, establish manager guidelines to support employees’ well-being
• Shared Purpose: develop cross-organizational ownership, prioritize societal issues aligned to organizational priorities
In the detailed steps that are provided around actioning these plans, the role of managers pops up a lot: coach managers to do this, train managers to do that. So that managers can in turn establish better personal connections with employees, assess and assist their people with their roles, well-being, growth, purpose…
It occurs to me that in many cases this might be quite overwhelming for many managers. We are asking them to do some really hard yards with this stuff. For some of them, the material may seem unintuitive or very difficult to wrap their heads around.
As boards, we can’t simply expect managers to just get it done. They need to be specially schooled by directors and the rollout of these initiatives needs to be very carefully curated.
So what are actionable steps directors can take to support and teach managers about tackling the big, complex people issues?
1. A modern remuneration framework matters. The board is ultimately responsible for the entity’s remuneration framework and its effective application. Boards can work with management to ensure that remuneration practices are well supported by broader frameworks and policies that influence behavior and align with the employee value chain. This includes clear accountabilities and expectations for risk and effective consequence management. This can sound a strong tone from the top that talent retention and attraction are key enterprise priorities.
2. Commitment to training, reskilling, upskilling and volunteering. A board can support management by assigning budget and ongoing strategic importance to employee training, reskilling and upskilling. Initiatives and opportunities inside and outside the business can be customized to suit employee growth and development. Coupled with volunteer days for employees to give back to significant causes in the community, an organization can provide meaningful, flexible and customized employee experiences that make people feel cared for in a holistic sense.
This is why every boardroom needs a specialist workplace relations, people and culture director—to support management as they tackle the big, complex and multidimensional people issues.
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