France appears to be catching up with the US and the “Great Resignation” whirlwind, with increases in normal staff departures and the number of resignations going out of control. What are the causes of this phenomenon which is creating so much turmoil in the French job market, and what can employers do in response to regenerate employee loyalty?
The French job market, the boomerang effect
“Potential recruits know that the situation is currently to their advantage. They look at employer brands and take the time to compare. There’s never been so much traffic on Indeed. Next autumn, at the end of the summer holidays, will be the best time for potential recruits to apply.” Éric Gras, job markets specialist for Indeed, Focusrh.com
More than 40% of employees in France are currently thinking of leaving. 50% admit that they are now less attached to their employers than they were before the Covid-19 pandemic. How did the French job market suddenly become so favourable to employees and why have they all fallen out with business culture? The first answer is a question of economics.
If you want to understand the current job situation in France, you need to start by going back to the pre-Covid period. At the end of the 2010s the job market was suffering from a marked lack of job offers. And this combined with a clear stagnation in salaries. Having so little choice, employees could not risk changing employer by choice. Such a high degree of tension was bound to end up with an inversion of the situation.
And the Covid-19 pandemic turned up when the job market was under the most pressure; it completely turned the whole thing upside down. It changed working habits as numerous sectors faced obstacles they had never had to deal with before, the pandemic allowed employees to become aware of their true value, economic weight and reconsider their deeper personal aspirations. So, at the end of the health crisis, it was no surprise when the job market switched to the advantage of employees.
A new concept of success that replaces the old careerist ambitions
“Status symbols have changed [...] A sustainable lifestyle is more important than money for many people, the true meaning behind what we do, or just achieving some kind of personal happiness - today, people are no longer interested in the perspective of a traditional career.” Hilmar Schneider, director of the Institute of labour economics (IZA), Courrier international.
The second major reason for the upheaval that is hitting the French business sector: employees are currently adopting a completely new definition of success. For a long time, success could only be achieved through a brilliant career, but now things have changed.
For an increasing number of employees, achieving a certain lifestyle comfort has become far more important than simply having an impressive CV. Primordial needs are becoming increasingly individualised to the detriment of the, now outdated, traditional social norms. A large majority of potential recruits consider their work purely as a means for them to achieve their personal goals. A career is no longer an objective in itself, but an unavoidable pathway towards the material comfort needed to achieve a desired lifestyle.
Once that lifestyle has been achieved, a certain psychological limit is reached where employees begin to demand more and more from their employers. Employees are no longer prepared to sacrifice their private lives for their professional lives. The opposite happens: work now has to serve personal interests. Once the financial situation is safe, other criteria will take priority when looking for work. These could be management style, workplace atmosphere, recognition or simply commuting distances. Reaching the top of the heap is no longer the driving ambition. For the employer this raises a whole new range of challenges, as they seek to meet the increasing and changing demands of potential recruits.
How can we improve employee conditions to avoid high staff turnover rates?
“Organisations that do not take staff commitment and loyalty into consideration will have to pay the consequences. In this new post-covid situation, if they haven’t already done so, they will need to review their management approach and working conditions, have greater trust in their staff, respect the need for a reasonable balance between private and professional lives and improve QWL.” Éric Gras, job markets specialist for Indeed, Focusrh.com
Employees are clearly taking control of employee-employer relations. And the companies that suffer the most are those that have neglected their management style and employer brand. How should businesses react when only 6% of French employees admit to being committed to their work? They need to start by reviewing their staff working conditions.
And beyond the issue of finding meaning in their work, what employees are really looking for is a completely new vision of staff relations. The increasing number of executives leaving their jobs tells us a lot about the subject: businesses whose operations are viewed as “toxic” are being deserted by their staff. The targets of much criticism: managers. They need to take a good look at how they communicate with staff, how they review workloads and they really need to reconsider their performance criteria.
Encouraging commitment implies taking a new look at how performance is evaluated. This is too often judged in terms of the time spent in the office. By replacing attendance statistics with more solid, realistic and motivating goals, managers should be able to strengthen their staff commitment. For example, this could involve a greater flexibility as regards working hours. Depending on the company and the profiles in question, more flexibility as regards work-from-home could be considered, provided that care is taken regarding the dangers of digital presenteeism.
“Presenteeism depends a lot on working conditions, corporate culture and the stereotypes generated by social norms. And so in France, a manager who works late is often seen as a high-performer, whilst in North America they would be seen as badly organised, obliged to stay late to complete the tasks that they were unable to complete during the normal working day” explains Dalale Belhout, Head of Content for DigitalRecruiters.
Staff loyalty can be built up through realistic and achievable missions, an easy to understand company hierarchy, clear, respectful and regular communication, high quality working conditions and a respect for an essential balance between private and professional lives. And these values will also contribute to positive employer branding and more success in recruiting new talent.
Incentive compensation, a genuine lever for reducing the effect of the “Great Resignation” phenomenon
“Incentive compensation also fuels employee motivation. For example, in the case of a mail order packing operative; unlike with bonuses based on the company’s financial income, over which they have no direct influence, their incentive compensation could recompense them for the work that they actually do: if a part of their salary is indexed to their order preparation rate and another on order completeness (the lowest error rate) and that the resulting bonus pay-out over a twelve month period is the equivalent of about an extra month’s salary, then the operative is going to have a greater desire to commit themselves.”, Fabien Lucron, Primeum Development Manager and Incentive compensation expert for, helloworkplace.fr
All things considered, people who work have quite conventional ambitions. They want to access to a fulfilled and satisfactory lifestyle. If the company does not provide them with the means to achieve this, especially in terms of their salary, they will not hesitate to move on. If companies want to meet the needs of their staff without increasing overheads, then they should consider incentive compensation.
Not every company can cover the costs involved in increasing standard wages. Such policies also lead to higher staff turnover rates and recruitment difficulties. Incentive compensation is a win-win process, for the employer it is a genuine investment and not just an extra overhead.
In deciding that a part of the wage will depend on their performance, the employer will increase employee motivation and incite them to commit to their job. If the defined objectives are reached, both the company and the employee will benefit. If not, the incentive compensation will be zero and the employer will have no additional cost to pay-out.
By setting the right ratio and using the most appropriate KPIs (Key Performance Indicators) for the employee and their job, the company will be able to implement a bonus scheme that will be coherent, engaging and effective for both its employees and its global corporate strategy. Companies must bear in mind that the implementation of an incentive compensation system will set the company and its staff on a virtuous circle. Employee loyalty will be strengthened and overall growth will be boosted.
A bonus scheme must be implemented methodically with the involvement of all of the management and executives. And, in the current context of a job market subject to a high degree of tension, successfully introducing incentive compensation must also involve human resources training.
This about-turn in the job market has been accelerated by Covid-19, consequently it has become a major problem for a large number of companies. They panic as they are faced with sudden waves of resignations, unable to attract new talents or find effective new ways to keep their existing staff on-board. Whilst the general condition of the job market will need to be harmonised at some point, employers will have to transform the issues they are currently facing into opportunities for objectively renewing their management styles and payroll policies.