While it’s only natural for people to consider their financial well-being when job-searching, these days there’s an increasing number of other factors that they are bearing in mind, such as the work’s purpose, the company culture, opportunities for career advancement, career-path options, flexibility and job location.
Put simply, post-COVID, people want a career that is personally and professionally fulfilling, rather than one that simply focuses on monetary remuneration.
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“The best things in life are free. But you can give them to the birds and bees. I want money. (That’s What I Want)” —so sang the Flying Lizards in 1979. But it’s now 2023 and we’ve come a long way, baby. The lyrics of this song don’t necessarily hold true any more (except to the roughly 2,668 billionaires in the world who hold an estimated US$12.7 trillion).
Don’t believe us? In 2022, PwC released its third Global Workforce Hopes and Fears Survey, which drew from more than 52,000 workers across 44 countries and territories, making it one of the largest such surveys conducted.
Some of the results were a resounding wake-up call. “Workers who feel empowered by their current circumstances—that is, those with specialised or scarce skills—demonstrated that they are ready to test the market. More than one-third of respondents plan to ask for a raise in the coming year, and one in five said they are extremely or very likely to switch employers.”
The conclusion? “Retaining these employees will require more than just pay; fulfilling work and the opportunity to be one’s authentic self at work also matter to employees who are considering a job change.”
Now, if you figure in Gen Z, who in the middle of the COVID-19 pandemic started graduating from university, then it isn’t hard to see that the workforce is morphing into a whole new shape, and the influence of external circumstances and evolving demographics is changing the rules, and the goals, of the game.
Disruption as a catalyst, change as the norm
It’s important to contextualise Gen Z and understand who they are and why. They are societal catalysts who care deeply about the environment. They are often angry about the state of the planet and the imbalance in prosperity, and they want to do something about it. They are ethical in their actions and their behaviours, be it consumption, recreation or purchasing trends. They tend to be social media activists who are racially, sexually, identity-wise and religiously diverse. Ignore their collective voice at your peril.
All of these factors need to be considered when thinking about what the future of work will look like. In a PwC report entitled, “How prepared are employers for Generation Z?”, the authors provide this definition:
“Gen Z’s are now the youngest constituents of the workforce, following the millennial generation. They were born in the late 1990s to early 2010s, with the eldest currently aged around 24/25 years. This generation is the workforce of the foreseeable future
According to recent studies, Gen Z and millennials currently make up approximately 38% of the global workforce and this percentage will rise to about 58% by 2030.”
This is a generation that has grown up in the middle of the COVID-19 pandemic disruption. They are also digitally fluent in a way that earlier generations struggle to be, often seeing technology and its applications as extensions of themselves.
They strongly believe in remote working and flexibility and their insistence in this area influences the expectations of those around them. They seek a sense of purpose in their work, and are more open about their mental health and well-being. This fosters a desire that these elements be foundational elements of their career paths.
Understanding this generation and what it demands and what it has to offer is crucial. And just as important is to create a workplace ecosystem where they interchange with more senior generations with a mutually beneficial goal of each learning from the other. This will be key to building a harmonious and more diverse corporate culture.
There’s no arguing with the demographics: Gen Z will make up an increasing percentage of the global workforce. Employers who fail to develop holistic career paths that satisfy workers —who more and more seek personal fulfillment and meaning at work— will be missing opportunities to build a new world and level of trust that can lead to positive outcomes at the personal, professional and even societal levels.
Retention strategies must understand that meaning is as important as money
Meaning matters to employees
Most important factors when considering a change in work environment, % of respondents1
As the above graph shows, when it comes to retaining employees, money is the top factor. If you figure in recent rising inflationary trends and geopolitical uncertainty, this makes perfect sense. But you can also clearly see that money itself isn’t enough.
Job fulfillment and the ability to be one’s true self at work were ranked second and third among employees considering a job change. These findings align with PwC’s 2021 survey results, in which 75% of employees said they wanted to work for an organisation that makes a positive contribution to society, and fully half reported experiencing discrimination at work.
Many people do place a high value on the salary and benefits they will receive as part of their employment, but finding, keeping and training those people means offering them a meaningful, tailored journey where they feel happy, safe and engaged.
The Luxembourg context
We think it goes without saying that the job market in Luxembourg and across the globe is weighted in heavy favour for the employees rather than the employers. Profiles with specialised training are in demand—and don’t they know it.
Luxembourg still punches above its weight. In recent years, however, its competitiveness in this area has slipped and, in fact, the country failed to hold its position in 2022 and dropped from third place in 2021 to seventh. While every country has its challenges, Luxembourg is increasingly finding it difficult to attract the right candidates.
It’s time to listen
More and more companies are waking up to the fact that they have to listen to what people are expressing and then work on offering a meaningful journey, tailored to the individual, in an attractive workplace. A person with purpose who feels safe and valued and who has room to develop is more likely to stay with an organisation. That just makes sense.
It’s no small effort, however, for companies to attract talents who come from other countries or live across borders, and keep them all happy and cared for. Luxembourg’s labour market continues to be challenged by post-pandemic seismic shifts, such as remote working (made more difficult by those cross-border works and their country’s differing tax and social policies), the great resignation and other factors, some of which we already mentioned in this blog.
It’s for these challenges, in comparison to other European countries, that Luxembourg-based firms need to make extra efforts and investments to develop their talents while growing the workforce in absolute numbers.
Another big problem is affordable housing. Even with a high salary, Luxembourg is becoming less competitive in terms of purchasing power, the main issue being affordable housing. To continue to attract foreign workers one has to ask why would they come to Luxembourg if they have to live in Belgium, France or Germany just to make ends meet, knowing their commute would be very demanding? It would be very helpful for lower income workers and people starting their career if there were stronger measures or incentives.
The other big Luxembourg sticking point is this generation of employees’ desire for flexibility in the form of hybrid work. Luxembourg has made inroads into making this option more accessible, but this still remains a considerable obstacle that needs to be tackled vis-à-vis larger countries with greater human resource pools to draw from.
For companies, this is where creativity and innovation come in. What PwC did to try and ease this for the workers who live cross border was develop satellite offices so that, so long as a large number of workers need to come to Luxembourg, the availability of these seven satellite offices reduces the length and stress of their commute, which is also good for the country —and the environment. This is in addition to commuting solutions such as car pooling.
Conclusion —there’s plenty to consider
With all these challenges, employers have to realise that the demands and desires of this generation of workers have changed, and their influence is changing the shape of everything.
What’s one of the main takeaways of the 2022 Global Workforce Hopes and Fears Survey for senior leaders? “Companies face a range of challenges, including geopolitical and economic uncertainty, climate issues, social changes and cyber threats. In this kind of environment, they’ll succeed only if their people are fully engaged, motivated and eager to contribute.”
To continuously offer the best holistic package possible, employers need to listen to their own people and also carefully to the markets. The goal should be to allow the people who work for an organisation to have a real say in the sustainable growth of the firm.
Once people have been hired, or for those who have been working at a company for some time, considerable investment must be placed into upskilling them, and this includes training on sustainability core behaviours: values, Diversity & Inclusion , environmental, social, and governance (ESG), physical and mental health, and others.
This is the only way to build the strong, thriving and engaged workforce so important for any company’s (or country’s) sustainable growth.
Now we would like to hear from you.
What we think
For PwC Luxembourg, there are four Strategic Human Capital Pillars: a Healthy Environment, Competitive Compensation, Talent Management and a Differentiated Career Path. Providing maximum flexibility, maintaining pay equality on all levels, fostering an inclusive and diverse work culture and upskilling talents are all key for both the attraction of these valuable profiles and their retention.