This year has been illuminating. Unexpected, once-in-a-lifetime challenges have exposed the flaws and strengths of every organization’s culture. Those that were thriving before 2020 have, in general, adapted and survived better than those that were not. The year also brought an equally rare opportunity. A window for organizations, leaders, and employees to leverage a sense of urgency and make meaningful improvements to their cultures. Of course, such changes can be challenging, too. But the courageous organizations that prioritize their employees and embrace new technology, interconnectedness, and modern leadership stand to reap huge rewards.
In last year’s global culture report, we asserted that organizations need to reassess their approach to employee experience and workplace culture. Regrettably, the old, time-based “lifecycle” methodology has proved difficult to uproot.
So, we continue this work in our latest global culture report, examining how outdated and disconnected technologies, programs, strategies, and leadership philosophies can obstruct individual and organizational performance. We see how haphazard implementation of technology has led to a tangle of tools and processes that hinder its effectiveness. Stale and impersonal recognition programs fail to achieve their desired effect on experience and culture. Superficial diversity and inclusion programs merely mitigate legal risk, rather than uplift employees and leverage their unique perspectives. Generational initiatives backfire by highlighting the differences of each group and ignoring similarities. Traditional, autocratic managers cling to dead philosophies that hurt culture and business outcomes. To prosper in a new decade full of uncertainty and adversity, organizations must forcefully shed “normal.” They must put the right action behind their good words and commit to a thriving culture.
This, our largest and richest report to date, is a synthesis of multiple research studies involving more than 40,000 employees and leaders from 20 countries around the world. One theme was unmistakable: things must change. The workplace—whether it’s in an office, a store, a factory, or a living room—can no longer be a tolerable grind with less-than-positive daily rituals. Instead, work must provide inspiring, challenging, and rewarding experiences for all employees. If there’s a new normal to be had, that’s it. Because for most employees in many organizations, great experiences have been the exception.
INTRODUCTION: CULTURE IN TIMES OF CRISIS
It’s been a unique year of change—for employees, families, companies, and countries. No one’s been immune to the challenges and uncertainty of a global pandemic that sent much of the workforce home in a matter of days, while those left on the front lines struggled to adopt new rules for safety. Millions of people lost their jobs, and millions of retailers, restaurants, and events shut down. Workplaces everywhere, disrupted. Then, at the end of May, a social movement demanding racial equality took hold in many parts of the world, particularly in the US. The need for diversity, inclusion, and equity in all areas of life, including the workplace, became an immediate priority to answer an overdue day of reckoning.
Traditional approaches to many aspects of daily life are gone, and a new normal, when it comes, may not be familiar.
But 2020 is more than a year of crisis. It is a year of opportunity and preparation for the decade ahead. Organizations need to look within themselves and commit to meaningful change. It’s not enough to discuss improvements; they must plan and act now.
How can companies keep their employees connected when everyone is physically apart? How can corporations create more inclusive cultures, so all employees are their truest selves at work? How can leaders rally their people through hard decisions and fearful forecasts?
The coming year will be a turning point. As workplace norms evolve, so must workplace practices. Without taking steps to improve the employee experience and bring people together, organizational culture will suffer. And with it, productivity, reputation, and profitability.
To better understand the pressing need for organizations to evolve, it helps to know which areas of culture need improvement.
CHANGES IN TALENT MAGNET AREAS
Each year we measure changes in the six core elements of culture that together determine an employee’s decisions to join, engage with, and remain at any place of work. We call them Talent Magnets™ because of their power to attract and connect people to their teams and organizations:
Figure 1. TALENT MAGNET™ SCORES FALL YEAR OVER YEAR
The current state of six essential elements that define thriving cultures.
Figure 2. The Talent Magnets™
Six essential elements that define thriving cultures.
Your organization’s reason for being besides profits. It’s the difference you make in the world, why your company exists. If your organization were to disappear, it’s the good that would go with it.
Employees need to feel connected to the purpose and understand how their job contributes to it. Once they do, their work takes on meaning and they can do it with a passion that they wouldn’t otherwise. Organizations have the responsibility to clearly articulate the connection between work and purpose and create conducive experiences.
The chance to develop new skills, contribute to meaningful work, feel challenged, have a voice, and grow.
Opportunity is more than the lure of promotions and pay increases. It’s about preparing and empowering employees to make decisions, inviting them to the table, and offering them projects that will expand their skills and relationships. Opportunity is enabling employees to impact the organization and experience the satisfaction of personal and professional growth.
The thrill of accomplishment, innovation, breaking barriers, playing on a winning team, and experiencing victories.
Employees must find success at the individual, team, and organizational levels. Most importantly, the success should be nurtured and celebrated with the help of leaders who remove obstacles and publicly recognize wins, large and small, as they happen.
Feeling valued for one’s contributions and being recognized for one’s worth.
Appreciation is as essential to employees as oxygen. Without it, systems fail. People need to know their leaders and peers notice and are grateful for their efforts, especially above-and-beyond work. Appreciation is most effective when delivered in timely, personal, and meaningful ways.
Caring about the employee as a whole—their physical, emotional, social, and financial health. Wellbeing ensures employees can be their strongest, most capable, most authentic selves at work.
The importance of wellbeing is growing because more employees feel stressed, disconnected, and lonely at work. Leaders need to create an environment of inclusivity, work/life integration, and connection to foster a comprehensive approach to wellbeing.
The mentoring, coaching, inspiring, and facilitating that creates environments of collaboration and support. Leadership ultimately leads to the success of individuals, teams, and the organization.
As the most influential of the six Talent Magnets, leadership cultivates the other five. The best leaders are more than bosses who tell their employees what to do. Great leaders co-create a shared purpose for their teams and empower their employees to do great work.
Our latest research shows that globally, every Talent Magnet index has slightly decreased. Engagement also fell from 72% to 70% this year. Employee Net Promoter Score® remained at 5%, and intention to leave increased slightly from 59% to 60%, while burnout increased 3%.
These numbers are adjusted to remove the effect of Covid-19. To see our research and perspective on the impact of crisis on culture, please read the Crisis chapter.
While we saw promising gains in all of the Talent Magnets between the first two years of the Global Culture Report, this year marks a drop in all six areas, creating a pivotal time for organizations to improve their cultures. Employees still feel burned out and struggle with wellbeing and leadership. Organizations have an opportunity to step up during these changing times and build the cultures they need for the next decade. The Talent Magnets reflect overall cultural health and are good indicators of where organizations can focus their efforts.
ORGANIZATIONS FACE CHALLENGES ON MULTIPLE FRONTS
In addition to the Covid-19 pandemic, organizations today face adversity that threatens their ability to thrive financially, operationally, and culturally.
While these macro-challenges are significant, five equally troubling issues are confronting organizations at the micro-level:
1. TECHNOLOGY INFRASTRUCTURE IS FALLING BEHIND
Even before the pandemic pushed the majority of employees into working remotely, technology infrastructure was a growing concern for many organizations. Nearly a third of respondents (29%) report that their organization has stopped investing in cutting-edge technology, while another 31% report that existing technology is difficult to use.
There is a misconception that employees fear advanced technology at work, when, in fact, they welcome it and are generally excited about it. In many cases, this perceived fear prevents organizations from using technology to improve their employee experience and better connect their people. Even those companies who are investing in new technology often don’t successfully integrate it into the employee experience, risking harm to their culture.
2. STALE RECOGNITION PROGRAMS WEAKEN POSITIVE IMPACT
Recognition programs have become commonplace, but most have not evolved beyond their original implementation. A significant number of these programs focus more on the technology than the individual, turning what should be a peak experience into a transactional exchange. As a result, they fail to connect employees to purpose, accomplishment, or each other.
Our research finds 45% of employees feel their recognition program is stale and disconnected from what’s important in the organization. Additionally, 43% of employees feel their recognition technology is outdated, while 49% report that they use their recognition program as compensation, rather than recognition. These perceptions contribute to a 37% decrease in employees feeling appreciated. Organizations are missing a crucial opportunity to successfully integrate personalized, meaningful recognition moments into the employee experience—moments that cumulatively improve cultural and business outcomes.
3. D&I DISPARITIES CONTINUE TO DAMAGE THE EMPLOYEE EXPERIENCE
Despite the widespread corporate adoption of diversity and inclusion initiatives, many organizations still struggle to provide all employees equal access to opportunities and advancement. Too often, ineffective D&I programs focus on legal compliance and risk-mitigation, rather than actively understanding and promoting the rich diversity of employees.
Our research reveals that these disparities do not go unnoticed: 35% of respondents report their organization is not doing enough to address discrimination internally. D&I programs perceived as ineffective result in a 78% decrease in engagement, a 66% decrease in the perception of the employee experience, and a 44% increase in moderate to severe burnout. The renewed focus on racial equality in 2020 means that taking a stand to improve inclusion is no longer optional; it’s expected.
4. GENERATION Z EXPERIENCES SETBACKS
Prior to Covid-19, Generation Z was poised to inherit a promising work landscape with a strong economy and record-low unemployment. Now, instead of looking ahead to unlimited opportunities, Gen Z is staring into an uncertain future. In March 2020, half of Gen Z’s oldest members (ages 18 to 23) reported that they or someone in their household had lost a job or taken a cut in pay due to the pandemic. This was significantly higher than Millennials (40%), Generation X (36%) and Baby Boomers (25%) who reported the same.1
As Gen Z enters the workforce, organizations will find these employees are similar to other generations in many ways, but have slightly different communication preferences and leader expectations. Blending a new generation into the workforce can create frustration if organizations don’t adapt to the needs of each one and help them all work together.
5. LEADERSHIP DEVELOPMENT STILL GROOMS GATEKEEPERS
Modern leaders connect employees to purpose, accomplishment, and one another, and they play a central role in creating successful cultural and business outcomes. As a result, integrated strategies for inclusive, modern leadership development are key to ensuring organizations are able to adapt to a changing workplace.
Unfortunately, far too many organizations continue to perpetuate traditional leadership development programs that select only a few “high-potential” candidates for training and advancement. Consequently, leaders still learn how to gatekeep, rather than mentor and advocate. Our research confirms that 58% of organizations still embrace this outdated practice, and just less than half (49%) of organizations offer leadership development opportunities to all employees. If organizations want to create modern leaders—or move to more of a shared-leadership model of management—they will need to expand how, and to whom, they offer leadership training.
Addressing these five issues ensures a stronger culture that enables organizations to succeed during uncertain times in the near future, as well as overcome the challenges of the next decade. Organizations would be prudent to start implementing changes now.
SYNTHESIS: AN UNEXPECTED OPPORTUNITY DURING TIMES OF CRISIS
n. the combining of often diverse concepts into a coherent whole
Times of crisis either tear people apart or bring them together.
The people who comprise organizations represent different geographies, experiences, mindsets, races, genders, ages, abilities, talents, preferences, and perspectives. So how do organizations rally all of these different people? Connect them to one another? Help them work successfully together?
As we determine how to integrate technology, recognition, and a new generation—as well as strive to improve inclusion and leadership—we need to factor in the many layers of people, data points, and employee experiences. This complex task requires intentional, disciplined synthesis.
“We are approaching a new age of synthesis. Knowledge cannot be merely a degree or a skill.… It demands a broader vision, capabilities in critical thinking and logical deduction without which we cannot have constructive progress.”
—LI KA-SHING, HONG KONG BUSINESS MAGNATE, INVESTOR, AND PHILANTHROPIST
Instead of absorbing people into an existing culture, organizations should aspire to synthesize a stronger, more resilient one. As in chemistry, synthesis combines different elements into a new entity that’s greater than the sum of its parts. A synthesized culture involves uniting all of your employees, complete with all of their differences, in ways that ensure they work together towards a common goal and achieve unprecedented results.
Organizations, fortunately, are a natural place of connection for people. While the world continues to feel more separated and isolated in a time of widespread crisis, employees are turning to their organizations for a sense of community, purpose, and security.
Prior to the pandemic, employees often thought of co-workers as their family and workplaces as their second home. Nearly three-fourths (74%) of employees discuss their hopes and dreams for the future with their colleagues, and 83% say their work family makes them happier.2 When employees suddenly began working remotely and distancing themselves from most of society, their work projects became critical places for connection.
For many employees, their organization’s purpose provides a common identity when other points of connection are in flux. An organization’s purpose can bring meaning to an employee’s personal life and help them feel they’re making a difference in the world.
This next year of uncertainty and change presents a choice for organizations. They can assume their culture is good enough and risk having people feel disconnected, disengaged, and tempted to look elsewhere. Or, they can do what’s necessary to build a great employee experience and culture that appreciates, recognizes, and combines the talent of each individual to create business success. This report is for anyone who’s curious about the second option.
- “Worries About Coronavirus Surge, as Most Americans Expect a Recession—or Worse,” Pew Research Center, March 2020.
- “This study identified the 5 people that make up a ‘work family’—which one are you?” Ruth Umoh, CNBC, December 14, 2017.