Those of us who study people at work know that people matter. A lot. But this hasn't always been the case.
Recently I interviewed a few board directors and heard firsthand that putting people first is still a novel idea for many leaders.
"Historically, leaders focus mostly on heavy financial and traditional operators, but that has to change." Another director told me, "It's the people side of the business that is really going to be the most important thing in the future."
Forty years ago, 80% of U.S. companies' market value came from tangible assets — material things like machinery, buildings, and plants. Organizational behaviorists knew that people brought value, but it was difficult to measure and often overlooked. Because of that, employees' well-being, emotions and feelings have not been top of mind when measuring value creation.
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Only 60% of people feel supported by their employer since the pandemic began.
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Today, 85% of market value is driven by the intangibles people create, often working alongside technologies. Are companies better at measuring how their employees drive value today than 40 years ago? New research we conducted revealed some unexpected findings.
People still are sidelined by companies
We surveyed over 15,600 global workers and found there is trapped potential throughout organizations. In other words, businesses are overlooking people and missing out on the value they create.
Here are some data points:
- Almost half of the workers below manager level do not feel they realize their work potential (the ability to use their skills and strengths). The pandemic has made this problem worse.
- Only 60% of people feel supported by their employer since the pandemic began. More than half of all workers are exploring new sources of income and contemplating career changes. People are in flux, while many businesses scramble to survive.
The pandemic has also illuminated that business survival and value creation hinge on people. If your workforce isn't willing to weather this storm, you risk losing business continuity. And that would happen at a moment when we need businesses and communities to keep running.
Three "people at work" myths — debunked
People must be at the center, but first, we have to debunk some common myths about people at work.
MYTH: It's not personal, just business
There is a long-held and outdated notion that business is only for profit. It's better to keep business and personal separate. Even workers themselves often draw an imaginary line between personal and professional lives.
As human beings, we all have core human needs that drive our behavior both inside and outside the workplace. People are wired for connection, purpose and stability.
The research we did helped you identify six needs that matter most to people. As you can see in the chart below, when organizations can meet these six needs, they can unlock upwards of 64% of people's potential at work. If you're looking to drive value, understand how personal business really is to your people.
MYTH: Your workforce is mostly motivated by money
Another surprising finding was that most executives believe a paycheck makes people join and stay with their organizations. Even leaders thought people were mostly motivated by extrinsic factors.
The reality is much more complex. Employees have multiple core needs that drive their behavior at work. While money certainly matters, it is not what matters most. People care about the emotional, relational and purposeful needs too. These are the needs that, when met, accelerate performance in the workplace.
If you're looking to unlock people's potential, ensure you are taking responsibility for more than just their financial needs.
MYTH: Good HR is all about efficiencies
The old thinking is that CHROs create efficient policies, but modern HR leaders know it's not about driving efficiency. It's about finding a way to make people thrive. And that's not an easy thing to do or measure.
A modern HR leader can handle the ambiguity and know that people drive the bottom line. They also realize that not everything has to be measurable to be successful. The CHRO's new mandate is about creating value through people, not just mere efficiencies.
Here's what Christy Pambianchi, a true modern HR leader and Verizon CHRO, shared with me during our research interviews:
"[As the CHRO] you don't have me around to drive costs out. You have me around so we can help the company thrive and grow by having the right talent in the right place at the right time. And if my only metric of success for the HR function is how much cost I took out, I don't think that aligns directly with how I am helping the firm thrive, grow and develop people who are unleashed to add value."
The era of the enlightened workforce is here
Your employees and customers are expecting your company to move beyond transactional relationships. They want you to meet their core evolving human needs. With so much at stake, now is the best time to ask yourself what matters most to your employees? It makes perfect business sense to do so.