New ways of employment - freedom and employee loyalty
1 May 2018
It is said that employee loyalty is key to creating value and productivity in your business. However, it has become more common for people to change jobs more frequently and while employee turnover increases in many organisations, companies must adjust to these changes. Millennials have different views on loyalty to generations in the past. The times where people had one job for life are gone and has been replaced by a new economy presenting new ways of employment. The LINK spoke to three Member companies to hear their views on how employment has changed and how they work to ensure loyalty in their organisations today.
The change in employee loyalty has led to the development of the “gig economy”, which entails short-term contracts. This provides the opportunity for more of us to make a living by working on “gigs” where we see ourselves as contractors rather than employees. Changes due to technology and human behaviour has led to fundamental transformations in the way we want to work, ultimately raising huge organisational and HR challenges, where companies run the risk of losing talent and skilled workers.
Pernilla Ramslöv, CEO of NOX Consulting, a network company of 1,300 freelancers, said that today there is a completely different way of looking at individuals, loyalty, leadership and company structures. “People stay in their jobs for a shorter time today. Around two to three years is more common compared to 10-15 years in the past. Loyalty is not necessarily tied to the employment contract. Loyalty for a brand or a company is much more tied to values,” Ramslöv explained.
HR needs to focus more on talent management and employer branding than ever before to be an attractive workplace for both employees and contractors. “Millennials are more focused on their own development,” Ramslöv said. It is more about self-development and “what do the company offer for me” rather than “what can I do for the company”. As a result, personal leadership is becoming an important aspect to keep this generation engaged. Millennials are also more focused on things such as sustainability, diversity and equality. For companies to adjust it is important to focus on values that employees identify with. In addition, it is important to work with incentives that make employees want to stay and deliver.
The LINK spoke with Claes Jacobsson, Managing Director of Scania UK. Scania is a company that values employee loyalty and wants workers to stay for some time rather than for the short-term, with the aim of keeping competence and knowledge within the organisation. Adjusting to how millennials desire to work, Scania implements benefit programs, incentive schemes, career planning and also provides an international environment where workers get a lot of opportunities for self-development and career advancement.
Today, people have ample opportunites to develop within the companies where they are working. However, freedom is becoming more important for individuals, which includes freedom to create your own development plans, decide how long your holiday is, and how to handle the money that you earn. “Therefore, freelancing is becoming much more attractive for many people,” Ramslöv said.
Emma Blackmore, Head of Partnerships Marketing at HR-tech company Gigstr, explained that the traditional employee relationship has changed, and that employers now must balance the desire to be flexible with staying legally compliant. This is something Gigstr, which has nearly 15,000 third party professionals registered in its app, strives for. Blackmore said: “Many businesses worry about investing resources in the contingent workforce because an employee might leave unexpectedly, but Gigstr have found it is important to offer workers a sense of camaraderie which in turn leads to better tenure and motivations”. The company balances flexibility with legal compliance by providing a ‘London Living Wage commitment’. This increases productivity through Gigstr’s commitment to looking after its employees, not just from a financial standpoint but also in terms of the psychological contract between them and their workers. “A gigstr [part-time/ flexible worker] can work as a shop assistant one day, be based at a Premier League football club the next, and at an advertising agency the other. Opportunities like these offer a new kind of employee loyalty,” she continued. Gigstr was recently nominated for the Living Wage Champion Awards 2018, the only Swedish company to be shortlisted.
So, what does the future of the gig economy hold in store and what will be the way forward for businesses hiring in the upcoming years? According to Blackmore, the gig economy is here to stay but making it fairer needs to be a priority: “The economic pressures to act speedily and flexibly in the digital age are unrelenting, and consequently the gig economy can only grow stronger.” Ramslöv agreed that the number of contractors will grow substantially over the next couple of years primarily because of two things; people desiring more freedom in their work, and the development of technology.
“Companies are able to use on-demand staffing solutions like Gigstr which has replaced the expensive middle-man and internal HR resources with technology,” Blackmore said. By using HR-tech companies like Gigstr people can be hired directly and by their own preferences and skill-sets. In this way they handle employer liability, payroll and administration, and make identifying, hiring and developing knowledge and skills less time-consuming and expensive.
Yet, as the gig economy is evolving, more traditional employers will not completely disappear. However, companies using more traditional ways of employment will only survive if they adapt to the constant change. At Scania, commitment is important to keep competence within the organisation. Jacobsson pointed out that the gig economy has its place especially for those who cherish freedom and independence. But he added: “You cannot build an organisation on only temps.” Scania engages people, especially millennials, by empowering them and providing interesting jobs that will attract and challenge people to make sure they deliver. “Experience is essence in our trade,” Jacobsson said.
When it comes to how Scania adapts to the changes Jacobsson concluded: “We always look at all alternatives, seek to adapt to the ever-changing environment, and take advantage of the new blend of opportunities”.