Create a competitive advantage through a more engaging people experience: People and Organisation: Services: PwC

Secure your future people experience: Five imperatives for action - Chapter 1

The World Health Organization describes stress as the “global health epidemic of the 21st century.” Many people work in continually connected, extremely demanding work cultures where stress and the risk of burnout are pervasive. It’s not just a challenge for busy executives or a question of survival of the fittest, but a real barrier to organisational success affecting people at all levels. Research suggests that the 20% of employees with the highest engagement levels also report burnout. These ‘engaged–exhausted’ employees have deeply mixed feelings about work, reporting high levels of passion and stress concurrently. While they display desired behaviours such as high skill acquisition, they also have the highest intentions of leaving their job, even higher than unengaged employees. This means that companies may be at risk of losing some of their most driven and hardworking people.

This is the first in a series of five chapters on how your organisation can create competitive advantage through a more engaging people experience.

"Longer working lives are compounding these pressures as people strive to sustain spark, motivation and the relevance of their skills through extended careers that often stop, start and change. Careers are marathons, not sprints."

Bhushan Sethi, Joint Global Leader, People and Organisation, PwC US

Many HR departments have experimented with wellness programmes, usually involving exercise or mindfulness. However, these wellness initiatives often treat the symptoms rather than the cause. We have found that a more effective lever is to find ways to deliver vitality by addressing the work itself. Organisations need to ensure that their workspaces and working practices are capable of enhancing, and not inadvertently depleting, employees’ energy and vigour.

To understand how prepared companies are to nurture their workforce for the future, we sought to identify the key organisational capabilities they will need to succeed. Building on PwC research and working in collaboration with Lynda Gratton, Professor of Management Practice at London Business School, we identified 45 key organisational capabilities. We then conducted a global survey of more than 1,200 business and HR leaders from 79 countries to gauge how important those capabilities are to organisations around the world. We also sought to learn whether organisations are taking action today to get ready – and which capabilities are most at risk owing to a lack of action. The full results are published in Preparing for tomorrow’s workforce, today.

Our research found that most business leaders understand the importance of providing working environments where people can thrive, where workloads are manageable and where there is a good work–life balance. But many of them are not taking action to make this happen. In addition, there are major differences across regions in how much organisations accept workers temporarily ‘disconnecting’ from their jobs. Fortunately, there are steps businesses can take to address these issues.

Build in more periods of recovery

Overwork has become a symbol of status and success in many corporations. One consequence is that some people – especially men, research suggests – put in more time than necessary or even overstate their hours. However, there is considerable evidence that work performance plunges when people toil for extended periods without a break. Productivity in the US is rising by just 1% annually, despite employees working more hours. Overwork is a story of diminishing returns.

The restorative experiences employees have on vacation sharpen attention, bring mental clarity and inspire insights. After just a few days of leave, people’s reaction time jumps by 80%. Vacations not only are a boon to the way people think, but also foster greater life satisfaction. How often you take a vacation is a better predictor of your well-being than the amount of money you earn. A regular vacationer earning US$24,000 a year is generally happier than an infrequent vacationer earning five times as much. Yet two in five employees in the UK, for example, take just half their paid holiday entitlement. With the absence of recovery periods in corporations dramatically preventing people from building their vitality, it may be time to treat unused vacation days as a negative metric: one that indicates that a company is heading for burnout.

According to our survey, three-quarters of respondents (76%) consider “a workload that is manageable enough to enable periods of recovery” to be of high or extremely high importance in the future. However, only half are taking action to make this a reality.

Companies have experimented with different ways to encourage their employees to take more time off. ‘Unlimited vacation’ was touted for a while, but some companies found that employees actually took less time off because they struggled to decipher what was acceptable in the absence of clear rules. Kickstarter, for example, retracted its unlimited vacation approach because of this unintended consequence.

What is the solution? Frequent, scheduled, mandatory vacation. This is something managers must actively monitor and encourage. They need to understand and address the obstacles employees face in taking their time off, and put processes in place to ensure that the vacationer does not return to an overwhelming workload.

Be purposeful about short breaks during the workday

Humans need periods of internal recovery – both mental and physical – throughout the workday to perform at their best. But organisations striving to enhance productivity can easily undermine sustainable high performance by seeking to squeeze more out of their people. Instead, they should build a culture of protecting vitality and recognise that the highest-quality work can’t be done by humans working like machines; people need space and time for inspiration. Balancing work activity with brief moments of detachment from tasks can promote greater energy, mental clarity, creativity and focus, ultimately growing workers’ capacity for resilience throughout the course of the workday. The long-term payoff is that people preserve energy and prevent burnout over the course of days, weeks and months.

One strategy in particular has been found to help employees take regular breaks. Research shows that we naturally function in what is known as ultradian cycles, periods of high-frequency brain activity (about 90 minutes) followed by lower-frequency brain activity (about 20 minutes). Employees should, therefore, be encouraged to take a recharging break every 90 minutes, especially when using technology, which makes the brain overly active. If you try to push through the rest phase of your ultradian rhythm, some research shows that you trigger the body’s fight-or-flight response. That’s bad news because it causes the parts of the brain that handle logic to become less active.

Technology can also help: some apps and computer software remind and encourage people to take physical and mental breaks regularly through the day. PwC Netherlands uses such a system to encourage its staff and partners to take regular breaks, stretch and move away from their screens for a short, energising break.

Let employees choose when and where they work

The freedom to choose when and where to work is a growing priority for people struggling to fulfill the many roles they play within and outside work. Yet many companies still fail to make flexible working arrangements a reality for employees, or, if they do, they discriminate against those who take up the option. Our survey results highlight the gap between desire and reality: 59% of HR leaders agreed or strongly agreed that their organisations provide a good work–life balance and flexibility over hours and working locations. However, only 47% of non-HR respondents said that their organisation had developed this capability. HR may have initiatives and programmes in place to enable flexible working, but people are either unaware of them or reluctant to use them. It is vital to bridge this gap – but organisational barriers exist.

The desire for variety and flexibility, though proven to increase productivity and retention, and to be in line with today’s drive to reduce real estate costs, is still in conflict with the corporate preference for the standardised working times and operating procedures that have dominated organisational practice since the Industrial Revolution. Flexible working policies may have benefits for the offsite worker, but they also present drawbacks for those left behind. If workers become out of sync with others in their network, the value of their time is reduced, and that can lead to higher stress levels and lower well-being.

A company that disrupts the five-day workweek of eight-hour days could potentially create a competitive edge. A growing body of research and corporate case studies suggests that a transition to a shorter workweek would lead to increased productivity, improved health and higher employee retention rates. However, organisations must also be mindful of the unintended consequences of flexible working.

Poorly managed offsite working can lead to isolation and can intensify a 24/7 ‘always on’ culture as people lengthen their workdays to accommodate others’ needs for flexibility. To address this possibility, companies should lay out clear rules that establish the times when people must be available – either physically or online – and enable people to have ‘protected time off’ during which colleagues must respect their need for recuperation. In addition, the worth of flexible work will be appreciated only if leadership models the activity and ensures that all employees are sent the right signals.

Provide an ecosystem of workspace

In today’s workplace, we are always connected and prone to frequent interruptions that leave us feeling fatigued and burned out. Distractions are not only digital. Employees are corralled into numerous meetings, conducted in offices that afford little respite from noise. Studies indicate that many people who work in offices spend anywhere from 35% to 55% of their time in meetings. Furthermore, many employees work in an open office environment, and the size of their workspaces is shrinking. Evidence of our attention’s fragility continues to mount. It is important to give people the opportunity to combine coming into work with working outside the office.

The best work environments reflect the natural rhythm of collaboration: people need to focus alone to process information, come together as a group to build on their ideas, then break apart to take the next steps. Work environments should have both communal and private spaces. Individual personalities also shape how much privacy people require; open plan spaces may suit extroverts to the detriment of introverts. Organisations’ ability to nurture vitality will benefit from accommodating multiple work environments and rhythms. Our survey shows that the perceptions of HR and business leaders differ: only 39% of business leaders agreed or strongly agreed that their organisations “have designed workspaces to promote well-being…and to accommodate a variety of working styles,” compared with 52% of HR leaders who believe they have.

Mandatory leave at Buffer

In 2015, social media management platform Buffer introduced financial incentives to encourage employees to take more leave. Yet this did not yield the anticipated results. Like the unlimited vacation policy, it counterintuitively led to employees taking less time off. In 2016, to overcome employees’ reluctance to take leave, Buffer implemented a mandatory vacation policy. Each employee is expected to take a minimum of 15 days of leave. Keen to ensure that employees take up the allocated leave, managers are expected to monitor employees’ time off and work with them to schedule vacation time if the employee has not done so. The mandatory leave policy has started to show signs of success; company data indicates that 56% of employees will have taken all 15 days of vacation (or more) by the end of 2018, up from 43%.

Dynamic working at Barclays

Global banking group Barclays intentionally did not define dynamic working as a policy, but rather phrased it as a question: “How do you work your life?” The firm offers a range of initiatives to support people at various stages of their life, including those pursuing an education and those serving as caregivers and parents. Examples include working from home, changing or condensing working hours, taking career breaks and job sharing. Launched in November 2015, the dynamic working campaign aims to nudge behaviours through videos, case studies and a dynamic working portal showcasing how colleagues define it. These methods of storytelling, from Barclays’ 3,000 middle- and senior-level dynamic working champions, provide realistic role models across the organisation. Even the most senior levels provide visible support for the programme.

The organisation reminds people of the benefits of dynamic working; its data shows that dynamic workers may be less likely to leave the organisation. In 2017, 57% of employees identified themselves as dynamic workers, and their engagement scores substantially outpaced those of others, including 5% higher scores in sustainable engagement.

Flexible Talent Network at PwC UK

PwC UK has created the Flexible Talent Network, which provides opportunities for experienced individuals who want a flexible working life. Network members support client engagements during peak periods, enabling them to make use of their skills and remain connected to the organisation, while focusing on other interests and needs during the year. People in PwC’s Flexible Talent Network agree to a contract in advance, including the number of workdays that suits their lifestyle. They are eligible for holiday pay, sick pay, pension and a bonus. More than 2,000 people signed up to participate in the first two weeks after the programme was announced in August 2018.