To attract and retain employees in the current tight labor market, companies are offering higher salaries and more benefits. This is becoming a ubiquitous trend; it is not just in tech, banking and consulting. Higher salaries and better compensation packages are a natural consequence of decreasing supply and/or increasing demand. Just as when companies sell goods or services, employees sell their time and effort, and they seek to get the most for what they are offering. Even if not every benefit is monetary, they all are part of the price of labor.
Yet traditional labor economics does not tell the whole story of why employees seek new jobs today. The pandemic—and the Great Resignation that followed—changed the ways people work and, as importantly, what people want out of life and work.
The lines between employees’ personal and professional lives have become blurred, and it’s not only a result of working from home or more flexible hours. Rather, employees no longer see their professional lives as separate and distinct from who they are off the clock (if that is even a thing anymore). Moreover, unlike the premise of the AppleTV+ show, Severance, employees do not want to keep these two lives separate.
More and more, employees of every generation—not just Millennials and Gen Z—are looking for work that also provides meaning and purpose to their lives. According to a McKinsey report, 70% of employees surveyed said that their sense of purpose is defined by their work. According to a report by Gartner, 65% of employees surveyed said that the pandemic has made them rethink the place that work should have in their lives.
When leaders articulate their company’s purpose, communicate it internally, and embed it in the organization’s ethos and strategic planning, they provide their employees with much more than just the company’s reason for being. According to Ranjay Gulati, cultivating a sense of purpose “is immensely useful as an instrument of value generation.” In his new book, Deep Purpose, he writes, “Companies can’t motivate workers intrinsically—forging powerful, emotional connections between employees, their work, and their employers—merely by setting ambitious strategic goals. They must also draw on our inherent human need to elevate ourselves by contributing to something bigger or transcendent.” This is not to say that companies need to found their own religions, but it does mean that people work best when their reason for doing so speaks holistically to who they are and not simply what they get out of it.
Of course, having a company purpose does not only benefit employees. It also provides customers and other stakeholders a means to know what a company stands for, why it makes the choices that it does and how it prioritizes its values when they may be in conflict. A clear company purpose is more than a branding or marketing platform, since it is inward focused as much as outward focused. It is also different from a company’s mission, vision and values. A mission statement articulates what a company does. A vision is what it wants to be or do in the future. Values are the principles that guide how a company operates. Purpose is the reason why a company does what it does.
Having a clear purpose can also make a company more flexible and able to pivot to new industries. Because purpose speaks to the impact a company wants to make rather than simply the widget it wants to sell, a company with a clear purpose can have an easier time evaluating and growing their market share according to the overarching market in which its purpose is embedded, not simply based on what it currently offers.
Purpose will not achieve everything on its own. Employees will still seek jobs with better pay and opportunity for advancement. Yet, after a certain level of financial security, economic or material benefits have diminishing marginal returns. We have already seen employees career downsize or take less lucrative jobs for the sake of improving their work-life balance. In addition, a company with a purpose-driven but toxic work environment that does not value its people will see many of them leave. People won’t sacrifice themselves for someone else’s higher purpose, especially today where other opportunities abound.
Yet, given the current demand for skilled employees and employees’ demands for more meaningful professional lives, companies that can articulate a sense of purpose will have both an organizing principle through which they can gauge impact and success as well as a means to attract and align employees around a common commitment.
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March 15, 2022 at 02:56AM
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Don’t Think Only Of Compensation Packages, Think About Company Purpose - Forbes
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