The Employee-Employer Value Exchange - Why It Matters

This week in HR, we turn to the employee and employer needs. In grad school, I learned a lot about the "Customer / Seller Value Exchange," and at some point in the last few years, I heard myself talking about the idea of an "EE (employee) / ER (employer) Value Exchange" in training and in consultations with business owners and leaders - all the time.

The statement "It's all about the EE / ER Value Exchange" became so ubiquitous in my daily consulting practice that I starting framing HR challenges, like attrition and employee satisfaction, as precipitants of a deficiency on one side or the other of this model or ratio. I haven't encountered the statement anywhere online and in all of my HR studies, and as I elaborate on and develop new products and services of Crescent's HR Advisory division, the statement is turning into more of a "Model" - a method and assumption about how to essentially balance two competing positions--or even better, how to align two traditionally competing positions of value derivation into synergy. Rather than zero-sum thinking, everyone wins, if proper balance is achieved.

We can make several assumptions to start to define the statement when we disaggregate it: Employee side value from the employer and Employer side value from the employee. What value do each of the stakeholders in this equation get? The employee, obviously, gets a paycheck. The employer, obviously, gets productivity. Is that all?

We need more analysis to get to the crux of the matter: The needs of each side must be understood to achieve balance. We are constantly hearing and reading about the changing economy. There's even talk of a great reset. Whatever is happening, change is in the air, there is an industrial revolution that has occurred and continues to bring to bear on everyone, especially workers and employers the world over. This tumult isn't unique to just the American supply-chain worker, or the receptionist of an office building that is only a third occupied.

Employers are frenetically grasping at the latest technologies in a race to automate everything and reduce costs. Hell, at grocery stores in some major markets, you might never even see an employee; even shopping carts are smarter than the shopper, with built-in scanners and weight scales. Technology, as it has advanced today, has only barely been adopted by the average person. It changes so rapidly. A cell phone is only a small step toward the intensely comprehensive world of the Internet of Things or IOT. What I'm trying to say is employers aren't sure what value they need out of employees, if not innovation. Innovation outpaces the average employee's capacity in many ways, rendering many jobs obsolete, before anyone even detects the shift.

Employees are similarly restless in the pursuit of finding value in their own lives, let alone finding meaning in their contribution to employers. There's an underlying anxiety about technology that I think brings to bear on a worker's daily capacity to function in a fast-paced society and changing work. Each of the 5 worker needs in Maslow's Hierarchy of Needs Pyramid is profoundly affected by technology's encroachment across every single career, from the most menial to the most intensely complex; farm workers and brain surgeon's lives have sea-changed in mere months and years, not decades and centuries.

Mercer's 2016 Global Talent Trends Study: A lack of development, outdated processes, and discontent with the role of managers are among the main drivers of workforce dissatisfaction.

Kate Bravery, Partner and Global Solutions Leader for Mercer's Talent business wrote, "Employees today have more options than ever before. They are demanding a new value proposition that combines greater career support with flexibility to manage their work and more opportunities to develop their skills. HR professionals are challenged to meet employees' demands and achieve a talent advantage, especially if they don't have a seat at the table – and this is crucial if they are to remain a viable part in the talent ecosystem."

There are bridge-builders for the employee/employer needs-chasm like empathy, meaningful and inspiring values, cultural awareness, agility, and embracing of technology-enabled trends like remote work and flexibility. I say these are bridge-builders because they're the fundamental principles upon which compromise and progress are built.

I think a good starting place for employers, rather than racing headlong into a compensation-increase binge to stop attrition and keep employees happy, is at least the following: 

• Perform a market analysis, using a model like PESTLE. Look around your business at everything from salaries to technology and assess what employees may feel they deserve. Benchmarking is a lot about perception.
  
  Taking assessment of the market, too, has other business advantages - it should be a regular exercise - like revealing important changes in consumer behavior, which in turn impacts your products' life cycle.
• Acknowledge employee concerns. There is upheaval, there is anxiety around technology, there is inflation, there are rational concerns out there, don't be the employer that is deaf to employee anxieties.
• Consider the skills your employees need to not only make your business a success, but that align with their own career goals - there should be synergy between employee training and employer vision.
• Recognize values that strengthen your organization and drive you closer to the achievement of your vision.
• Increase flexibility - According to a workplace strategies study conducted at the end of 2021 by Gallagher, 65%+ workers are seeking or have found jobs that offer flexibility or are remote. Some would take a flexible or remote job even if it pays significantly less than an in-office position.

The Employee / Employer Value Exchange is predicated on mutual understanding of expectations. How can an employer evince value in what they want employees to do, without knowing where they're going as an organization and having a clear strategic vision with expectations that are carefully codified in Job Descriptions?

I need to simplify the point. If you want workers to demonstrate excitement and buy-in, to function at their best, to contribute value to the organization, you should have defined what value looks like. Understand the needs of the employee and provide value-adding opportunities that go beyond pay--to address their needs. Otherwise, why bother? There is no sense in asking employees to perform without tools and resources to help them perform to your needs.

What do employees want more of, besides pay in this time of hyper-inflation? According to numerous studies:

1. Better tools and technology that reduce meaningless work, and free the employee to creatively perform
2. Training that is important to the employee and is in clear sight of what the organization needs from the employee
3. Recognition of their hard work and value contributions that matter in your organization
4. Flexibility - no one wants to ask for permission to go to a doctor, employees never have to ask to work through lunch or to stay late...
5. Empathetic managers that truly care about the employee's professional and personal development.

Most of these measures actually save companies money, increase efficiencies, and improve quality. When you lower costs, increase output, and foster better work through happier people, this is synergy.