UHY GLOBAL JANUARY 2023 FEATURE


MEETING THE CHALLENGE OF CHANGE


 The pandemic accelerated generational changes in the way we work – and in what we want from work. Professional services firms need to adapt to a workforce with evolving attitudes and aspirations Workplaces and working patterns have always evolved, but in the past the pace of change has been gradual and manageable. By contrast, the pandemic has ignited a workplace revolution. Writing in Forbes, business leader Madhu Chamarty argues that this revolution “could be defined by the moment in which talent, more than capital, becomes the most critical factor for business”. That is because, in many sectors and geographies, talent is in short supply. Research from global workforce solutions company Manpower Group finds that, in 2022, three in every four companies (75%) have reported talent shortages and difficulty hiring – a 16-year high. Nor is this necessarily a temporary phenomenon. A report by organisational consulting firm Korn Ferry estimates that, by 2030, more than 85 million jobs could go unfilled around the world because there are not enough skilled people to take them. WORKFORCE TRENDS This skills shortage could hardly have arrived at a more volatile time for workforce relations. The pandemic has created an expectation of remote and flexible working and swept aside traditional objections around productivity and control. At the same time, new technology is coming on board – including artificial intelligence (AI) and machine learning (ML) – that is threatening some jobs while supercharging others. Perhaps most importantly of all, an influx of Generation Z workers (those born roughly between 1995 and 2010) is bringing new ideas, values and ambitions into the workplace. Among these, it is reported that Generation Z places less value on salary than previous generations and increasing importance on working practices and the wider environment. These are trends that cannot be ignored. Shifting workforce demographics, attitudes and aspirations mean the world of work is in flux. Against this background, traditional recruitment and retention strategies may fail to deliver. Workplace conventions are being turned upside down and every sector, professional services included, is feeling the effects. “The expectations in today’s post-Covid workplace are totally different to those of just two and a half years ago,” says Sungesh Singh, managing director of New Zealand member firm UHY Haines Norton (Auckland) Ltd. “Not only are remote and hybrid working and work-life balance major factors; a general resource shortage has created greater expectations in regard to career development.” Ken Shemie, partner at UHY Victor LLP in Montreal, Canada, confirms the trend. “With the worker shortage we are experiencing, employees are in great demand and are constantly being approached with promises of a better opportunity,” he says. “The result is that employees have become more demanding and they are looking for a better work-life balance, more mentorship and opportunities for growth, and a good work environment where they feel appreciated.” GENERATIONAL CHANGE The desire for decent pay, opportunities to climb the corporate ladder and recognition for good work is not new. But today there is a generational difference in what employees expect from work beyond those fundamentals. We have to guard against stereotyping generations, but research shows that workers in previous generations placed more value on long careers with well-established companies, while employees born in the last 30 years or so tend to be less loyal and more mobile. This is perhaps best exemplified by what the New York Times describes as a ‘techlash’ on college campuses. Jobs at Facebook, Google and Apple were seen as golden tickets for ambitious graduates just a few years ago, but big tech recruiters are now having trouble filling graduate programmes. Big tech has lost its allure for younger people, at least partly because of recent revelations around impact and influence. Technology firms once promised to ‘do no evil’. Now they stand accused, fairly or not, of undermining some of the basic tenets of democratic society. And what is true in tech is also true more widely. Younger generations are looking for employers that match their values as well as their ambitions. They want to work for organisations they see as good global citizens. With that in mind, Sungesh says businesses that want to attract the best talent must take corporate social and environmental responsibility seriously: “Today there is much greater awareness of a business’s ESG (environmental, social and governance) and CSR (corporate social responsibility) record and we find that this absolutely comes into play with both existing and potential employees,” he says. Roman Seredyński, managing partner at UHY ECA Group in Poland, is chair of UHY’s global ESG group. Like Sungesh, Roman sees a growing pressure on businesses to be ‘doing the right thing’. “UHY member firms are finding a growing call for demonstrable sustainability from their clients, and from a wide range of stakeholders,” he says. “We hear it from staff and potential hires because as consumers they have been moving to more responsible brands for some time. As savvy investors of the future they will do likewise. At UHY we need to ensure that our clients are equipped to meet this challenge. Having a sustainability strategy in place and a means to report non-financial business dimensions will be paramount.” Publicly-listed enterprises are mandated to report non-financial measures in many jurisdictions, but private businesses are also waking up to the importance of ESG. “Meeting expected standards in environmental, social and governance policy, process and action, and reporting on them, are viable indicators of performance,” says Roman. “As professional accountants we understand the commercial and ethical value of ESG and have the expertise to help clients build successful and sustainable businesses”. LIFE OVER JOB Younger employees want flexibility, freedom and an alignment of values. They wanted these things before the pandemic, but Covid showed what is possible – including a transition to home working almost overnight. At the same time, the talent shortage has given them the power to demand more from the organisations they work for. What it all amounts to is what Franci Žgajnar, director at UHY d.o.o., Slovenia, calls ‘life over job’. “Younger generations definitely prefer this and the question then is, what is a suitable motivation for them, to keep them working hard and achieving in your organisation? Career change is quite acceptable to them,” he says. That is perhaps the root of the issue. In a world with more roles than candidates, the appeal of a job for life is not what it once was. Younger generations were already comfortable with the idea of a portfolio career – one that combines multiple income streams. Increasingly, they are also prepared to leave secure and well paid employment if it fails to match their expectations in other ways, even if doing so means taking what older generations might consider a backward step. “I find that the new generation of employees lives in the present and is less concerned about the impact of career decisions in the long term,” says Ken. “It is no longer about what I must do for my employer in order to succeed. Now, it is what my employer is willing to do for me.” Sungesh takes the same view. “The factors that currently motivate professional employees the most are flexibility and freedom, with career paths being a secondary factor,” he says. “The younger generation, in particular, feel that work flexibility is no barrier to career transition.” THE NEED TO ADAPT In practical terms, how do professional service providers adapt to this rapidly changing world? Where possible, some form of flexible working model is almost certainly necessary, though realistically it is likely to be in the form of hybrid work rather than a fully remote strategy. And officially or otherwise, businesses need to show empathy when it comes to issues like parental leave and family responsibilities. Modern professionals also want lifelong learning opportunities, to equip them for what they regard as an uncertain future. And technology should be employed to take over basic data input and bookkeeping tasks, leaving employees free for more creative projects. In accounting, even less experienced employees may reasonably ask why they are being tasked with ‘drudge’ work when software is available to take away the pain. Wellbeing programmes will also help to show employees that your company cares, and with a new focus on work-life balance, managers should keep intrusive out-of-hours calls and emails to an absolute minimum. As we have already seen, a focus on ESG will help align corporate values with the personal principles of a growing proportion of your workforce. GETTING THE BALANCE RIGHT For some managers, adapting to workplace change will take a significant shift in attitude. “We have to be concerned about work-life balance,” says Franci. “As senior staff, we need to ask if it is really necessary for staff to be available for calls or video conferences at any time. And if staff are working remotely, how much control do we really need?” Sungesh admits that getting the balance right can be tricky. “From a firm’s perspective, the challenge is to manage the productivity of, say, working from home arrangements while balancing employee expectations. We believe flexibility works best when considered on a case-by-case basis rather than as a blanket policy.” As Sungesh suggests, firms are likely to meet these challenges in their own way, based on their own unique circumstances. Some will travel far and fast, creating flatter, more employee-focused organisational structures and rewarding work on the basis of output rather than hours. Others may be content to implement limited hybrid working and tweak ESG policies in the first instance. Whichever it is, Franci argues that there needs to compromise on both sides. On ESG, for example, staff need to be aware of the cost and accept the fact that even companies that want to do their best will not be able to do everything. Ken agrees that realism is required as both sides navigate the changing landscape of the post-Covid working world. “Those (employees) who succeed will be more practical and realistic and not idealistic in their beliefs,” he says. But firms that get the balance right stand to benefit in a number of ways. Employees of all generations who feel listened to and valued will work diligently for your business and provide the best possible service to clients. They will not simply be workers. They will be partners and colleagues determined to make a difference and help clients prosper. With that in mind, the key message is that firms need to do something to meet a new generation of employees halfway. Working life is changing rapidly. Younger generations have very different priorities to their older counterparts in some areas, and talented people are not short of options. Organisations that fail to recognise and act on these realities may find themselves in the recruitment and retention slow lane, struggling to keep their crucial human resources healthy, happy and engaged.


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