The Chief Psychology Officer

Ep59 The Changing Shape of Work - Part 2

Dr Amanda Potter CPsychol Season 3 Episode 59

Discover the critical forces transforming today's workplace as Dr. Amanda Potter, the insightful CEO of Zircon, returns to our podcast to examine the dynamics of fairness, accountability, sustainability, and technology. As we navigate these waters, we'll scrutinize how these forces not only shape employee engagement but also the broader operational landscape. Unpack the tensions between high salary expectations and the pursuit of ethical practices with Gen Z talent at the helm, revealing a generation that champions both financial security and corporate responsibility. We'll also discuss strategies that businesses can employ to attract this new wave of purpose-driven candidates, enhancing their operational efficiency and financial health in the process.

Stepping into the digital era, we explore how the integration of technology is revolutionizing the workplace, fostering a climate ripe for innovation and diversity of thought. With Dr. Potter's expertise, we dissect the evolving psychological contract between employers and employees, considering the external forces and daily interactions that shape it. As we prepare for the CIPD Festival of Work, our conversation pivots towards practical measures companies can take to create a nurturing environment for their talent pools, emphasizing the importance of development, inclusion, and community. Join us for an episode brimming with insights, ensuring your organization is primed for the future of work and ready to tackle the complexities of today's employment landscape.

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Speaker 1:

In an increasingly complex and dynamic business landscape, organizations are having to be even more agile, especially when it comes to employee engagement. Join us as we explore the main factors of engagement in part two of the changing shape of work. This is the Chief Psychology Officer, with Dr Amanda Potter, chartered Psychologist and CEO of Zircon, and I'm Angela Mellick. Today, we are continuing our look at the eight main forces impacting how employees engage and operate at work.

Speaker 2:

Hello Amanda, hi Angela, thank you so much. So last time we met, we talked about the first four of the eight forces that are impacting how people view and engage with their potential or current employer. The ones we talked about last time were place of work, work-life balance, diversity and inclusion, and mental health, and I really enjoyed that conversation, actually, so I'm looking forward to today yeah, I did too and what are the last four that we're covering today? So this time we're going to look at fairness and accountability, sustainability, debt and digitalization. That's the eight forces that, from our research, are impacting how employees are looking at their potential or current employers, and it's impacting the psychological contract and the way in which they are engaging with those employers.

Speaker 1:

The first four were very much about the impact on employees' personal and individual experiences of their work life. It seems like these last four are big picture themes.

Speaker 2:

I think you've summarized it beautifully. Actually, these are much bigger, organization-wide topics rather than the very micro or individual challenges and changes that we focused on last time. That affects them as individuals, as humans, and we mustn't forget about those four because they are so important and they're very much protecting the mental health and the wellbeing of the employees With. This one is much, much bigger. It's about the context of the whole organisation or the whole family, so it's wider than just the individual. These last four.

Speaker 1:

The first one, fairness and accountability, makes a lot of sense already. I don't know many who would want to work in an unfair situation.

Speaker 2:

No, no, definitely, and it's one that I think it's a good one to start with, particularly as the new generations are coming into the world of work work, there is an increased need and expectation around transparency and value generation and ethical conduct and inclusivity and cognitive diversity. So fairness is really core and the expectation that reward will be distributed equitably and openly and that everybody will actively contribute to success and be paid relatively for that success is really seen to be key for new employees coming into organizations, for the new generation.

Speaker 1:

We've talked about accountability before. When discussing workplace culture, remind me of some of the research you've come across.

Speaker 2:

So the Gartner 2021 Reimagine HR survey found that employees who work in an environment which is highly fair and where accountability is encouraged, they're much more likely to perform at a level which is higher than those who are not treated fairly and are not given accountability. There's also a lovely relationship between accountability and fairness and intention to stay as well. So feeling like you're being trusted and you're given accountability for outcomes, and being treated in a way that is consistent or fair with your colleagues are two of the most important things that you can do to engage your employees and to keep them on side, if you like, and keep them committed to the organization and to the brand.

Speaker 1:

And, if we look at it on the other side of the coin, unfair practices and a lack of accountability. They really impact an employee's experience. So I know that, according to Expert HR, the top three reasons for employee grievances are bullying or harassment, relationships with managers and relationships with colleagues. And it's interesting because you actually spoke with Caitlin in a previous podcast about bullying and we had such a response to that episode, so it is something that really does impact everyone 67% for bullying and harassment Isn't that interesting Because we didn't mention that stat in that podcast.

Speaker 2:

And you're absolutely right, the outpouring of feedback has been incredible since that podcast. It was really tricky to record. I felt quite uncomfortable listening to myself when we went back to check the content, but actually it's really hit a chord for many people and they've thanked us for raising such a difficult topic. But then when you look at that number of 67% are saying that one of the main reasons is the main reason for grievance. Then, according to that research and if we go back to the whole point of this conversation, which is about fairness and accountability, managers don't go to work intentionally not wanting to be fair or not wanting to share accountability.

Speaker 2:

But very often what we found out through that bullying podcast is that when managers are under stress, when their resilience is low, they make in the moment decisions and they don't necessarily operate in a way that is truly inclusive and supportive and they may be slightly rash with their decision-making and it will really undermine that feeling. And it's all about the feeling, the feeling of a fairness and the sense of accountability, which is the foundation, of course, to psychological safety. Everything we talk about comes back to psych safety these days, absolutely.

Speaker 1:

I think it's also it's very reciprocal, isn't it? So if you are in a situation where you can see that your manager is not being accountable or not being fair, you're less likely to feel like you should be accountable to the organization or that you should treat the organization fairly because you feel, well, they're not fair anyway, so why should I be?

Speaker 2:

Why should I be fair? No, it's so interesting that that law of reciprocity it really does play a part. No-transcript, and that will give them accountability and ownership of successes and results.

Speaker 1:

What's interesting is that I was in a conversation recently with someone who specializes in the early talent attraction and recruitment side of things and she told me that she wasn't sure on the number but she'd seen a stat, a very high stat, that said a whole lot of the pupils at sort of a level already felt like the recruitment process in any organization was going to be unfair, it was going to be rigged against them. That's crazy, yeah. So how does an organization lay a foundation of trust where they can combat what is essentially a negative perception that they haven't even done anything to earn just yet?

Speaker 2:

I think there's two points there. One is around answering your question, which is all about the role modeling and the communication, and it's about the information that's shared in the press, of course, and it's all about the way in which the company is operating and the way they're seen and written up in the press. That's the first thing, and social media obviously has a massive part to play in this. But the second thing is our role as psychologists, the role we play in building assessment processes. Our job is to create objectivity, to create fairness in our assessment for recruitment strategies.

Speaker 2:

That's so sad that A-level students immediately think that organizations are going to be biased and not objective, when occupational psychologists, particularly in the assessment arena, we've dedicated our lives and our careers to creating objectivity and building processes for helping to assess and recruit the right talent for an organization. So that's such a shame. But I actually think it's the first part of that question that really answers it, which is it's all about the role modeling, it's all about the comms, it's all about that social media.

Speaker 1:

And I guess it's all about not just ensuring that your employer brand is good, but also going above and beyond to have a very, very positive brand.

Speaker 2:

That fits beautifully with our second point, which is sustainability, and, given the message you've just shared, angela the new entrants, early career, early talent. Shared, angela that new entrants, early career, early talent they want to align themselves and work in an organization that meets their values, and one of the values that is really important for them is around sustainability. So having access to information that helps them to understand how environmentally conscious that organization is is really important.

Speaker 1:

Well, it goes beyond just environment. It goes into social responsibility and really thinking about it, an organization that has a conscience in everything that it does.

Speaker 2:

Again, it's about being ethical, isn't it? Are they prepared to make the right decisions for the environment? I mean, I'm big on the environment, as you know, but for society, for environment, for people, even if it's not going to make them the most money. And I think that the Gen Zs in particular are much more vocal about the need to consider environment, society, people before organizations, before the profit line of an organization.

Speaker 1:

I came across this term actually climate quitting, and that is around environment, but it's this idea of dropping an employer, switching jobs and sometimes being quite public about that because you believe that their practices are unethical or that they're not environmentally conscious enough. One example in particular was Caroline Dennett. She actually went viral on LinkedIn about a year ago and she resigned from an 11-year career at Shell because of ethical and climate reasons. In the end, shell not only lost a long-standing skilled employee, but also got a reputation hit.

Speaker 2:

Yeah, particularly because she did it so openly and on social media as well. And the stat that I've identified in preparing for the podcast is that 40% of the Gen Zs are focusing on a company's sustainability credentials and would take a pay cut to work in an environmentally responsible business, which is interesting, because actually a lot of the clients that we're talking about saying that many of the new entrants are quite, I want to say, unrealistic, but that seems unfair Quite demanding is a better word in terms of their pay expectations following university.

Speaker 1:

Yeah.

Speaker 2:

They're expecting a lot, but the other point is they're not planning on staying for very long, but I was going to make that point later on in this conversation. They want a lot, they're not planning to stay very long and they expect a lot of their employees is really the message.

Speaker 1:

I think the thing around sustainability is that it's almost self-feeding. So culturally especially these newer entrants to the workforce now culturally amongst themselves, it's really really not okay to work for a company that is perceived publicly to be unethical. So then it turns into this thing that you don't want to advertise where you're working if it's not a place that you can be proud of, and many of them will then take a pay cut because they'd rather be able to talk about their work with their friends when they're out and talk about it on social media, which is where a lot of them live.

Speaker 2:

It's a very interesting point because there is actually a link between the sustainability agenda and success. There's some nice data to show that 33% of businesses that actually do integrate a sustainability strategy and care about the environment and people and society. Actually it can help to create efficiency, can drive down costs and, of course, it does attract really good candidates who care about these things and therefore are more likely to be purpose-driven. So, whilst it might seem like just a good thing to do, or the right thing to do, to care about these things, actually there are business benefits too. So I think there's a real message for this one, which is around the changing shape of work, is that the expectations of the future entrance into the organisations is changing. They're expecting a lot, but the good news is, if organizations get it right, it can have a very positive impact on the bottom line.

Speaker 1:

Well, and speaking of the bottom line, the third factor impacting employee experiences and how they engage at work is debt, and globally we're actually in more debt than we've ever been at a country business family level Shocking.

Speaker 2:

I couldn't believe it. Actually, when I did the research, looking at the forces and debt kind of hit me between the eyes that we are a country in debt. In fact we are not the only country that lives on debt, but we need the debt in order for this country to survive. Almost it just seems a crazy place for us all to be, I think at a macro level.

Speaker 1:

A lot of people cannot wrap their heads around it because it's such the numbers are mind-boggling, literally. But at a personal level, I'm sure almost everyone can relate, because I don't know a person who doesn't have some bit of debt, even if it's just a small amount. But the average, oh, I can't remember the average. You might know it.

Speaker 2:

I've got it. Yeah, the average is about 34,000 per adult.

Speaker 1:

The debt in this country. That's crazy. That's a lot of money per person 66,000 for families, which actually that's. That's literally like someone's annual salary.

Speaker 2:

Yeah but that does include mortgages, so that would include retirees, so it's adults, not children, but it would include people who have retired, probably paid off their mortgages, or I hope they have. So in some ways, it felt like it was lower, because some people have got much bigger mortgages, much bigger debt than that, but some people may have none at all. I mean, this is average, but it's still a lot of money. So, as of April 2022, the people in the UK owed 1.7876 billion, which is now 1.839 billion. That's a crazy number.

Speaker 1:

When you start thinking about it like that, you just can't. It just feels like fake numbers, then like imaginary numbers. I couldn't even say it.

Speaker 2:

But I mean, what does this tell us about the changing shape of work? What does debt tell us? That's the point here, isn't it? Is that it motivates us towards certain environments, certain activities because of money worries?

Speaker 1:

It's a tough world out there. It really is. Money worries are obviously a common concern, but what does that really have to do with your employer? I mean, how do you address this as an organization? Do you just raise salaries?

Speaker 2:

That's exactly what employees would want, of course, but companies can't always afford to do that.

Speaker 2:

We've got a client that has 15,000 employees 12,000 employees on national minimum wage, and they're seasonal workers, and so, as there have been national wage increases, those increases are having a significant impact on the cost to the business, and the impact of that cost is that it's a really tricky and vicious cycle, because they need to increase their incoming funds in order to pay the salaries, so they're putting their prices up, and so the living cost for employees is going up.

Speaker 2:

Therefore, the salary's got to go up, and so the living cost for employees is going up. Therefore the salary's got to go up. And so it just seems for me it seems just a really tricky situation when the profit margin is smaller and they're having to retain as much of the profit as they can in the organization in order to be successful and to drive that ongoing growth and to continue investing in the organization. It's really hard. How do you keep the employees, how do you keep them engaged, how do you keep them happy? How do you pay them in a fair way, but whilst, at the same time, make sure that you provide a service that isn't too expensive to the customers as well.

Speaker 1:

Well, I know at Zircon we fairly recently introduced a new employee assistance program and that offers a lot of benefits besides just things around debt. But debt advice and financial planning was part of the range of services on offer, so I guess that's one way an organization could address it without taking a massive hit on their payroll.

Speaker 2:

I think it's right. I know we offer it as part of the employee assistance program, which is why you've mentioned it, angela, which is a great thing, and I think many organizations now do as part of their employee assistance programs. But I think the two points that we've just identified the sustainability versus debt they're almost in conflict with one another, if you like, because, on the one hand, you may be thinking, angela, I really want to work for an organization that fits with my values, that cares about society, but, on the other hand, you'll be thinking, I just need to earn as much cash as I can in order to pay for my mortgage or my baby or whatever in my life. So I think, therefore, everybody then has to give up on something. But what are you prepared to give up? Because we don't necessarily always get both. There are some incredible brands, like Innocent, who I've worked for as a client. We've got so many organizations that do try to get both right and they do an incredible job, but they're often, I think, it's choosing one or another.

Speaker 1:

I think it's interesting what you're saying about sustainability and debt, kind of competing with each other and the compromises that we have to make with ourselves. I feel like that's just life, though, too. Life is kind of about compromise. You can't have everything that you want all the time, unless you're incredibly lucky, but I don't know anyone who doesn't make a compromise somewhere.

Speaker 2:

But what does this say about the psychological contract again?

Speaker 1:

Angela.

Speaker 2:

Because that's the point of this whole podcast, which is the choices people are making about the organizations that they're proposing to work for and either stay working for or leave, and it comes down to the balance. What is more important? Is it around ethics and sustainability? Is it around money? Am I just going to go to the next organization because it will pay me more? Or is it because they treat me fairly and they give me ownership and they give me accountability, or they take care of my mental health and all the things that we talked about last time? They include me in conversations. It's a great place to work and work from home I get the balance. All those things impact how we make decisions and which ones are the most important, and actually what's so interesting is that very often, we make the decisions on the basis of this one money that becomes almost the primary decision maker, the primary motivator.

Speaker 2:

But actually it can be quite a negative one. And we know that money is a negative motivator because once you've got it you want more of it, and if you don't get more of it, then the motivation dips. And so this one's a really funny one for me, and it's really tricky for organizations to get it right not to pay too much, not to pay too little, to motivate appropriately. Hence there being so many great pay and reward consulting firms out there.

Speaker 1:

I think, for the organization. Basically you've laid it out. It's around looking at your workforce as a partner and trying to come up with ways to treat them with respect, basically. So, as you say, you might not be able to afford top, top, top pay, but as long as you as an organization are thinking about fair compensation, that's already a massive step in the right direction. You're not taking advantage of your workforce then. You're just trying to run a business and also treat people fairly.

Speaker 2:

And one of the things I think is missing maybe in our eight areas around the change shape of work, it's development. In research I conducted, goodness, 20 years ago for American Express. We were looking at what's the most important thing graduates are focusing on. Back then 20 years ago, when we did the research for Amex, it was all about to what extent will you develop me, what's my succession potential, what's my career pathway and my opportunity through the organization? That's what they were focusing on then and I haven't included it in the eight because that doesn't change. They're still focused on that and it's made me think about the next topic and the final topic for this podcast, which is digitalization and AI. And the reason why I think that's important is because, with the increased digitalization and the real rise of AI in organizations, I think there's a real risk that many of the very basic starter roles that individuals would normally take and learn from they are being automated. We are using technology to support those roles and technology are doing a number of the tasks that somebody may normally do.

Speaker 2:

So my other half he works in an organization. He's a layout artist. The technology has fundamentally changed in the 30 years he's been working in that organization and a lot of what he used to have to do manually is done electronically, and whilst he does many, many more pages and does loads and loads of work, it has a real impact on how he does. Somebody new coming into that organization wouldn't have that same learning journey that he has had over the 30 years of working there, and so I think there's a real risk that we don't learn and earn our stripes with the increased and the change of world of work around digitalization and AI. It's great because it brings a huge amount of learning into the business, but there's some real risks too.

Speaker 1:

One thing that's come up in some of my own research in the early career space has been around a skills gap where organizations are really having to compete hard actually, for skilled employees who are hot on digital, hot on tech, hot on AI and really know their stuff. So it's kind of a funny one, isn't it? Like technology is taking over the world. It's getting rid of some of these menial jobs which for someone who's unskilled might mean they need to upskill, they need to retrain, they need to choose a different path, but it's also opening doors for a lot of people who do have those skills. Then the organization is having to grapple with all of this fast progress and compete for it.

Speaker 2:

Yeah, gartner data was saying by this year, so by 2024, which is when we're recording the podcast 90% of organizations will be using automation and AI, and 83% of organizations, as of last year, were saying AI is part of their strategy and is a high priority, and global AI market is set to reach half a trillion US dollars this year.

Speaker 1:

Yeah, it's amazing. It's not a surprise, but it's amazing.

Speaker 2:

I mean it's bonkers. I mean there's lots of benefits, aren't there around standardization, efficiency, consistency, learning, but we do need to understand the impact it's having on roles and that ability to earn your stripes, to learn and to progress through the organization, trying out different tasks.

Speaker 1:

Well, and also, how does it impact employee engagement? Is it something that employees are excited about or fear, or what was your research there?

Speaker 2:

The research has shown that it is really varied. The people who are motivated and engaged by digitalization and AI and want to create careers in there, of course they're excited about it, but for many there's fear the issue that I've already raised around starter roles being automated and the worry that actually it will be harder to get into organizations and to get established. So fear is one of the things that we're seeing around AI and, of course, it's still the unknown. None of us know the true impact it's going to have. I see universities being very pragmatic about the risk of AI. The same with organizations, too.

Speaker 1:

Yeah, especially in the recruitment space. There's a lot of AI flowing into that. They're using it to speed up their processes, but also they're seeing candidates using it too, so they're having to grapple with that. So how do we ensure that the impact of digital is?

Speaker 2:

positive overall. Well, I think it's learning from it. Of course. I mean we've got to learn from the efficiencies that the technology brings. We've got to continue understanding and also we've got to listen to the candidates who are coming in, because the truth is, the new candidates, the new generation, the Gen Zs, are bringing cognitive diversity into the organization.

Speaker 2:

They are more likely to be pro-digitalization and AI than my generation, for example, who's probably a little bit more fuddy-duddy now I am I'm talking about myself, by the way than my son is, because he's now moving into the university era. So he challenges me all the time and kind of looks at me and rolls his eyes when I ask him very simple questions about technology and social media. So I think we just need to be open to the ideas and to the insights that they're bringing in, because the truth is, those early career entrants are going to bring so much creativity, so much innovation, particularly around digitalization so we've talked about fairness and accountability, we've talked about sustainability, debt and now digitalization, and, in part one of this series, we talked about place of work, work-life balance, diversity, inclusion, mental health.

Speaker 1:

That was a lot of content.

Speaker 2:

That was a lot of content.

Speaker 1:

I hope the listeners are still listening, so they've all have a significant impact on the psychological contract and we spoke about the psychological contract last time that unwritten, intangible agreement between an employee and the employer that describes the informal commitments and the expectations and understandings that make up that relationship Completely.

Speaker 2:

The whole point of this is that the forces that are changing outside of the organizations are impacting how employees see those organizations, and the psychological contract is built from everyday interactions, actions, statements, promises between the employee and the employer, and so how that organization operates in the world of work and then how that individual interacts with the manager and with that organization all starts to inform that psychological contract. And it's those eight forces that are having, I would say from my research, the greatest impact on the decisions that future employees and current employees are having or making about that organization.

Speaker 1:

I know from some of my conversations with talent professionals in the early career space that the expectations coming out of that psychological contract are becoming more and more tricky to manage and to meet. What have you observed?

Speaker 2:

I completely agree. I think expectations are definitely changing. Each generation, each new generation coming in, are much clearer about what's right and wrong, fair or not fair. The standards they're setting and expecting of their employers are higher than ever. Yet the fascinating point and the research you've identified, angela, and we've been talking to clients about is that they're not planning to stick around for long. They want to learn, they want to throw themselves in, but we have to realise as employers that they will only potentially be with us for a few years max and then they'll want the next activity, the next challenge. And we see, as an established yet agile organization of 24 people, that our colleagues often go into very big organizations from us. They'll go into the large corporations, the large, large consulting businesses and partnerships so that they can experience both sides of the coin. They see something quite different in us and they learn something from us, and then they go into a very different business.

Speaker 1:

And you do see that, with generations wanting to learn from each of those different environments, so main takeaways, Amanda, what are your top tips for organizations to help set, manage, meet expectations and ultimately have a more engaged talent population?

Speaker 2:

manage, meet expectations and ultimately have a more engaged talent population. Well, let's go back to the research 20 years ago. The first one is development. So let's make sure we put in place great learning and development strategies that are exciting, that give people increased clarity and an opportunity to choose and understand what career might be great for them. The next one is around inclusion, of course listening, bringing people in to opportunities, variety. People don't want to be doing the same thing over and over again, so the opportunity to get involved in activities is great, and community as well. So the sense of community and being part of something that is important is also very important too.

Speaker 1:

Speaking of inclusion, Amanda, I'm really looking forward to hearing your talk at the CIPD Festival of Work in June. For our listeners who don't know, the CIPD Festival of Work is a free event for HR professionals. That's happening at London's Excel Centre on the 12th and 13th of June. Zircon will be there at stand A74 and Amanda will be talking about harnessing diversity to achieve psychological safety. That'll be on the 13th of June from 10 30 in the morning on the EDI Insight stage. Isn't that right, Amanda?

Speaker 2:

It certainly is. I'm super excited about speaking and sharing our research. So I'm going to be looking at why demographic and cognitive diversity are both so important for team success. I'm going to be looking at why demographic and cognitive diversity are both so important for team success. I'm going to be looking at the links between cognitive diversity and because one of the pieces of feedback we get very often from our customers, from our clients, is, now that we've created the awareness, now that we've created the understanding of psychological safety, what do they do in order to create inclusive, safe teams? So it's going to have a real focus on the so what in that session.

Speaker 1:

Amazing. It sounds really useful. I can't wait to hear it, and you'll be at the stand afterwards, won't you?

Speaker 2:

I will. In fact, I'll be at the stand on both days, on the 12th and the 13th, and I'm hoping, if at all possible, to wander around the conference too, meeting people. So I'm really excited about meeting new people and also old friends.

Speaker 1:

Me too. I'll be at the stand on the 12th and 13th as well. You know I'm a sucker for in-person conversations, amanda, and in the lead up to the event, we've actually created a comprehensive psychological safety resource pack which our listeners can download for free and be entered into a competition for free accreditation as well.

Speaker 2:

Amazing and in fact I've seen the pack. What I love about it? Of course it's electronic because we're trying to save trees, but it's brilliant because it's got all of our thinking and a couple of publications all in one place is really helpful.

Speaker 1:

And to get your free psychological safety resource pack, just visit Zircon's page on LinkedIn. The download link will be in one of our top featured posts. And if you are going to see IPD Festival work, come visit us at stand A74. It's right near the EDI Insight Stage, which is where Amanda will be talking on the 13th of June at 10.30 am. Thank you, Amanda, for another wonderful conversation today.

Speaker 2:

Thank you, angela, and thank you everyone for listening. I hope you have a wonderful and successful day.

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