The days of employers taking their employees for granted are over!

Employers will learn (the hard way) that employees are driving the bus. For the first time in decades, employees are no longer at the mercy of employers that have enjoyed substantial leverage over their employers, such that they can force employees to take on additional responsibilities without compensation. One examples is where companies hire several employees for a specific job title, and then cut back on their employee count for that job title, distributing the work of those employees who are terminated to the remaining employees without any additional compensation. In the past, employees have no real recourse – they either sucked it up and did the extra work, or they had to quit.

With the work remote movement, employees now have options they did not have just a few years ago. I am a big believer in finding silver linings to clouds, and if there is one big positive coming out of the Covid-19 pandemic, it is the remote work movement. Now, employees are not tied to their home market. Rather than having to find a job in their immediate geographic area, or alternatively having to relocate at great expense, employees can literally look for jobs anywhere in the world. This is particularly powerful for employees with highly specific skills, and those that work in smaller markets, like Santa Barbara, California, where I live and where there are very limited work opportunities.

Now that employees have new opportunities to find new jobs, if they are unhappy with their current employment, employers will not be successful at forcing employees to take on additional responsibilities without compensation. Employees can and will say no. Employers no longer have the threat of termination to coerce employees into submission. While some employers, particularly large corporations, may have to learn their lesson the hard way, meaning that they will have to have a sizable number of employees quit their jobs before they realize they can no longer force employees to do this additional work without compensation, all companies now face this new reality.

One other related change that employers face, and that will force them to rework how they treat employees, is the end to underpayment of employees. All too often, especially with large employers, and especially in smaller markets, employers underpay employees. In the past, they have gotten away with this, because employees had few alternatives, so they just accepted it. Today, and again due to the remote work movement opening up new opportunities, employees will not sit by and accept being underpaid. This is a huge issue with employees that are hired by a company when they are younger and have less experience, and then they remain with the same company for many years, increasing their skills, expertise, and experience. Often their compensation does not reflect those skills, expertise and experience. In the past, these employees have accepted that they are being underpaid because it would have been too difficult, or impossible, to find a position that pays what they are worth. Today, with remote work opportunities, employees are far less likely to sit by and continue to work for less compensation than they deserve.

Smart employers will recognize and embrace these changes, and will treat their employees appropriately. For example, employers who want to retain their top employees will evaluate those employees each year, including researching what an equivalent employee would cost, should they need to replace that employee with an equivalent worker. The smart employer will adjust each employee’s pay, each year, or at least periodically, so that the employee is earning what they are actually work. In essence, they employer will treat the employee as if they are rehiring them at the market rate, at each evaluation point, (each year or at least periodically).

Gone are the days when these companies can continue to underpay people, taking advantage of the difficulties employees face with finding new employment. If employers fail to incorporate these new periodic evaluations and compensation adjustments, they will be doing the same research, to find a replacement employee, because their top employees will quit. Smart employers will have their HR departments continually gathering critical employee compensation data, including benefits and perks. By adjusting employee compensation to market levels periodically, employers will demonstrate their appreciation for their employees, and will have a much greater chance of retaining talent. Companies that fail to do this are going to lose their best employees to the competition.

The pendulum has definitely swung strongly back towards the employee in terms of the power to negotiate. Employees are going to get what they want, including remote work flexibility and schedule flexibility, and they are going to get compensated appropriately for the work they do. Employers that fail to recognize this new reality are going to suffer the consequences, which include losing their best talent to their competitors.