Employees demand better despite job insecurity

Globally, employees are less likely to protest about perceived injustices at work - but business leaders believe that the proportion of workers “keeping their heads down" will fall in the near future.

A new report published by Herbert Smith Freehills suggests that continued economic anxiety, coupled with rapid digital transformation in many workplaces is combining to revitalise fears about job displacement.

Similarly, it reveals that the economic pressures changing workers’ priorities have also impacted employer behaviour; with 81% of business leaders questioned saying that the cost of living crisis, inflation and the threat of recession are driving changes to workforce policies.

Economic pressures

“Financial worries appear to have stemmed the flow of employee activism. However, it is entirely possible that the same economic pressures causing employees to think twice before acting today, will be the catalyst sparking higher levels of employee discontent tomorrow,” says Emma Rohsler, partner and regional head of Herbert Smith Freehills' employment practice. “This means employers need to strike a balance between doing what's right for their organisation and their employees, without falling foul of regulations and meeting the demands of disparate groups within the workforce.”

Jacqui Reed, senior associate in Herbert Smith Freehills’ Johannesburg employment practice adds: “A workplace which actively and practically encourages diversity, inclusion and equity clearly continues to be one that is sought-after by employees. Employers that do not embrace these concepts both internally and externally will not only fail to attract quality candidates and fall behind in the race for talent, but will also struggle to maintain a diverse workforce.”

Report findings

Called “Balancing Acts”, the report is the third in a series of three exploring the future of work, with the first released before the global pandemic. The latest report is based on research among the C-suite in global organisations with annual revenues of at least £250 million.

Its key findings include:

Scepticism breeds control: As regulators, investors and consumers increase scrutiny on organisations; fewer employers now view activism as a positive force (20% today compared to 37% in 2021). As a result, 97% of employers have “moderate or high” restrictions on activism; representing a turnaround from 2019 when 53% claimed to have no restrictions in place.

Lack of appetite for activism: Focusing on the state of the economy over the past 18 months, only 59% expect employee activism to rise – a figure that has fallen from 72% in 2021, and 81% four years previously.

Sticks and carrots: Employers are also exploring ways to influence employees’ working preferences through incentivisation. Nearly 47% expect remote working to become a privilege earned through trust; while 43% have plans to differentiate pay between remote and on-site workers in the next three to five years.

Employee demands

“Our research highlights the continuing impact of economic, regulatory and societal fluctuations on expectations and attitudes to work - underlining the challenges employers face when building effective teams and maintaining morale,” says Nick Wright, partner in Herbert Smith Freehills' London employment practice.

Although employee activism is falling in the immediate term, the report goes on to reveal that employers are under increasing pressure from their employees to provide better working environments. Three quarters (75%) say that employees are demanding greater support for their health, while a similar proportion (74%) argue that having a sense of purpose is essential for employee well-being. Against this backdrop, 62% actively encourage regular breaks from work, 49% give employees the “right to switch off” and 37% provide access to counselling.

However, it is also clear that generational attitudes make it hard for employers to please everyone. The research shows, for example, that 46% agree that the entrance of Generation Z to the workforce increases the risk of employee activism. At the same time, 53% argue that differences in beliefs and values between generations make it hard for employers to meet expectations on environmental, social and governance-related issues.