Although job security and financial stability have risen in relevance due to the COVID-19 pandemic, respondents to a recent international survey rank good workplace relationships and a healthy work-life balance as the most desirable job attributes.
Like a sudden splash of cold water, the COVID-19 pandemic was a rude awakening for many organizations. The global surge in uncertainty intensified the need for operational responsiveness and digitalization, fundamentally changing the way employees view and approach work. According to the U.S. Bureau of Labor Statistics, 1.6 million organizations (19%) experienced a government-mandated closure in 2020, while 4.7 million organizations (56%) experienced a decrease in demand for their products or services. During the lockdown, 31% of organizations (employing 68.6 million workers) developed work-from-home arrangements for employees.
While some firms are now pursuing full back-to-the-office plans, many organizations are employing hybrid models that allow employees to blend working from home and working in the office. The decision to adopt a hybrid model is generally predicated on increased worker productivity, but realizing the benefits of such flexible scheduling requires the endorsement of both employer and employee. So, to move forward, organizations must understand what is important to their workforce. A recent survey of U.S. employees reveals that 75% of participants want to work from home at least one day each week, with one in three preferring to work from home full time.
Jenna Blanche and Jasmijn Bol
The pandemic is not the only factor influencing employee preferences. Pre-pandemic, the workforce was already changing. For example, politics used to be something that was “left at home.” Younger generations, however, feel they should be able to express their values at work, and many are now actively seeking out organizations that share and promote their concerns for social and/or environmental welfare. The Deloitte Global 2021 Millennial and Gen Z Survey finds that 44% of millennials and 49% of Gen Zers have made choices over the type of work they are prepared to do or organizations they would work for based on personal values or ethics. Another significant change in employee preferences is the prioritization of mental health and emotional wellbeing. People have always preferred work that is fulfilling and cultivates joy, but younger workers differ from those of the previous generations in their willingness to sacrifice financial compensation for nonmonetary means of fulfillment. Although job security and financial stability have risen in relevance due to the COVID19 pandemic, respondents to a recent international survey rank good workplace relationships and a healthy work-life balance as the most desirable job attributes.
Due to these concurrent changes, juggling short-term financial stability with advancing technology and growing demands for social and environmental activism has become even more complicated. Organizations are facing new operational risks, and while risk management has never been an easy task, it is increasingly challenging under the current constraints. It is essential for organizations to go about this critical task in a structured and meticulous manner. Our new book, Operational Risk Management: Organizational Controls and Incentive System Design, provides guidance for organizations on this quest. In it, we explore the concept of operational risk as well as the mechanisms used to diminish the impact and occurrence of risks: the organizational control system. Since the scope and scale of operational risks are unique to each organization, our objective is to explain the theory behind why and how managers respond to the unique combination of threats that challenge their organization.
We emphasize employee management and the design of management controls because all organizations need employee management. Each organization’s employees are, however, a unique group of people, and management must discover the unique preferences of employees in order to implement a set of controls that will best motivate their particular workforce. Financial and other explicit rewards are a critical part of the management control system, but there are many other ways organizations can motivate employees, and we discuss several approaches that are in line with the preferences of the younger generations. Finally, we highlight the importance of directing employee effort, a function often overlooked but critical in an increasingly digital and diverse operating environment. FB
Jasmijn Bol is Francis Martin Chair in Business and the PricewaterhouseCoopers Professor of Accounting. Jenna Blanche (MACCT ’19) is a PhD candidate at the University of Amsterdam. They are the co-authors of Operational Risk Management: Organizational Controls and Incentive System Design (Business Expert Press), which is available on Amazon and other book retailers.
