CHAPTER 11
The Employee Experience and the External Environment
Manufacturing Cars and Shaping Societies
Henry Ford was one of the most successful business leaders in history. Although some things he said and did would be repugnant to modern social values, his actions reshaped the nature of work and organizations.1 Ford is often associated with the development of automobile mass-manufacturing technology, but what is less known is that many of his most innovative leadership decisions focused on the employee experience.i
Ford is widely remembered for using assembly lines to transform the auto industry. The idea of using assembly lines actually came from Ransom Olds, who created the Oldsmobile. Ford's genius was creating an organization that could use assembly lines to mass-manufacture affordable cars at a global scale. Ford devoted much of his attention and resources to develop a workforce able to sustain new high-volume methods of production. This led to paying workers well above market wages, providing health care and education benefits, supporting employee safety and well-being, building housing and schools close to the factories and plants, and taking other steps to support employees and their families. One could argue that Ford's greatest accomplishment was not developing mass-production technology that made cars. It was building a workforce that could use this technology to create a global manufacturing company at a scale never before seen in history. What is impressive about Henry Ford's leadership is not just what he did, but his willingness to challenge traditions and prevailing assumptions that existed in the early 20th century about the relationship between employees and employers. Ford's reasons for improving employee experience were far from altruistic.2 Nevertheless, many things about work we now take for granted, including eight-hour workdays, livable wages, and worker safety programs, can be traced to decisions made by Henry Ford to improve the employee experience at the Ford Motor Company.
Ford realized his company could not achieve its vision of creating mass-manufactured, affordable automobiles without increasing the investment made in its employees. His decision to invest in people was not just a reaction to external labor market pressures or shifting employee expectations. He did it because he believed the investment would pay off in increased employee commitment, performance, and loyalty. He also did it despite criticism from internal stakeholders and external business leaders that it would ruin the Ford Company and hurt the local economy. And what is perhaps most interesting, he did it in part to change the nature of the entire automotive economy, asserting that “unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One's own employees ought to be one's own best customers.”3,ii
This chapter looks at the future of the employee experience by considering how it is affected by broader socioeconomic conditions. Companies do not work in a vacuum. National and local social services, laws, and infrastructure investments have a massive impact on the availability of talent in the labor market and the expectations and needs of employees. The experiences that companies are able to create for their employees are enabled or constrained by the experiences people have outside of work. It can be difficult to talk about issues such as education, health care, and workforce regulations without sounding political. But these observations are not about politics. It is an examination of things in society that directly affect how companies must manage the employee experience to build successful organizations.
In this chapter—and in this book, generally—I have tried to steer clear of ideological beliefs, with one exception. I believe work should positively affect the quality of people's lives. Though one can make economic arguments to support this view, I hold this belief for moral reasons. Economic arguments are amoral in the sense they can and have been used to justify highly exploitive work arrangements, including slavery, which is the polar opposite of this belief.4 I believe the ability to pursue happiness is a fundamental right of all humans. Because most people have to work given economic realities, people should be able to find happiness in their work. It is ethically wrong to exploit positions of power to enrich oneself by restricting the ability of others to pursue happiness. Creating high-quality work environments positively influences the lives of employees, their families, their managers, their customers, and society at large. Higher-quality work environments create better world environments.5 Happiness is not about everyone getting the same level of rewards from work (if you question this, reread Chapter 7). Nor does it come from living a life of leisure free from any responsibility or obligations to others (see Chapter 2). Happiness comes from work that provides a sense of fulfillment, purpose, accomplishment, belonging, respect, and meaning. This is what a good employee experience is all about.
The reason I wrote this book is to help people create higher-quality work environments, recognizing that the only way to create positive and sustainable employee experiences is by creating successful and adaptable companies. Achieving this vision depends on how companies treat employees, but it also depends on the external social and economic environments where companies operate. These environments are shaped by cultural beliefs and government policies that reflect how societies view the nature of employment, what it means to not work, and the support people should receive to find meaningful work and pursue successful careers. The following are four areas where societal values and attributes significantly influence the future of work, the adaptability of organizations, and the quality of the employee experience.
- Blending learning and working. Digitalization is accelerating the speed at which existing jobs are automated and new jobs are created. Societies must rethink the concepts of education and working so that people can adapt to a changing economy through lifelong learning.
- Maximizing labor force potential. The changes caused by talent tectonics increase the importance of fully leveraging the capabilities of a society's labor force. This involves removing economic barriers that prevent people from working, making it easier to move into new jobs, and allowing people to structure jobs based on their particular needs.
- Technological accessibility. In a hyper digitalized world, providing people with safe, efficient, affordable, and reliable access to the internet is critical to the infrastructure of a functioning economy. Having access to the internet is in some ways as important to finding gainful employment and effectively performing work as having access to energy, safe transportation, and clean water.
- Corporate social advocacy. In a world where work and life intertwine, companies must play a greater role in supporting communities and addressing societal issues that employees care about. This creates a virtuous cycle where companies support communities, communities support people, and people support companies.
This chapter explores each of these areas, why they matter to the employee experience, and how social values, resources, and regulations affect them.
Blending Education and Work
Digitalization is predicted to automate as much as 50% of the work currently performed by people over the next 10 years.6 Although there is debate about the accuracy and economic impact of these predictions,7 what is certain is much of the work currently done by people will soon be done by machines. At the same time, technology is predicted to create millions of new jobs.8 The skills that people will need to perform these new jobs are likely to be significantly different from the skills used to perform past jobs eliminated by automation. This creates a challenge for companies and societies in general: how can we help people develop the skills to transition into new jobs and careers throughout the entire course of their lives?
When technology eliminates jobs, it does more than just affect the people who were performing those jobs; it also increases the anxiety of other people in the organization about the future of their jobs.9 It is important to position automation as a tool for transforming work and not as a method to eliminate employees. The goal of technology should never be to replace employees simply to replace employees. The goal should be to enable people to focus their time and energy on the kind of work that humans are good at and enjoy, and that machines tend to do poorly. Chapter 2 discussed this concept and how it relates to the employee experience. Companies can support this by finding ways to bring employees along in the digital transformation through development and training. This was much of the focus of Chapter 6. An important part of this is giving people confidence that they can acquire the skills needed to adapt to the changing nature of work. At a certain point, the gap between an employee's existing skills and the skills they need for their next job becomes too great to be addressed by their current employer. This is when society can either help this person transition to their next role or simply let them fend for themselves as an unemployed person with skills that no longer matter.
Companies provide extensive learning resources, but they are not educational institutions. It is unrealistic to expect companies to provide the level of training that people will need to make the large-scale career transitions necessary to adapt to the digitalization of work. For example, a hospital might provide development support so that a medical assistant can move into a new job as a x-ray technician, but it may be unrealistic for the company to train them to be a medical imaging technician.10 And it would be extremely unlikely for the company to provide the training necessary to pursue a career building and installing x-ray machines. This is why we have schools, colleges, and universities. There are some skills that are hard to acquire without investing significant amounts of dedicated time and resources solely to the practice of learning.
As digitalization accelerates the pace of job disruption, societies need to rethink the nature of schools, work, and education. The concepts of school and work as they are used today are rooted in social and political changes that took shape in the 1800s. The industrial revolution created a demand for more skilled labor, which led to a rise in public education. From a cynical viewpoint, the purpose of this education was not to better the lives of people. It was to graduate skilled workers to staff factories.iii Our society has historically thought about education and work based on a mindset that most of us will go to school to learn for roughly the first 25 years of our lives. We then graduate and work until we retire about 40 years later. This model does not make sense in a rapidly changing, digitalized economy that depends on a workforce committed to lifelong learning. In particular, it implies that learning and working are separate activities, that people are not ready to work until they graduate, and that most students are under the age of 30.
False Assumption 1: Learning and Working Are Distinct
The concept of “graduation” suggests a demarcation between being a student and being an employee. This demarcation may have made sense when educational resources such as books and teachers were physically located in schools, jobs involved repetitive tasks that did not require constantly learning new things, and work was tied to specific geographic locations. In the digitalized world, educational resources can be accessed anywhere at any time, jobs constantly change and require constant learning, a lot of work can be done remotely, and schools can be attended online. In this world, people do not have to choose between learning and working. They can and should do both throughout their entire lives. Every employee can be a student and every student can be an employee.
False Assumption 2: We Finish School Before We Start Working
There is value in certifying that people have mastered job-relevant skills before being allowed to perform different roles. But students do not need to formally graduate from a school to effectively use their skills. In fact, students may be more motivated to learn skills when they can apply them to solve real-world issues. This does not mean we should abolish diplomas or formal education, but students should not wait to graduate before they start exploring how to apply their knowledge and skills. Schools, companies, and societies should collaborate to make working part of the learning process, and vice versa.11 This includes companies creating job roles that emphasize the learning value of work so that students are not exploited as a cheap source of labor.
False Assumption 3: Most Students Are Young
Today's educational system is largely is built on the premise that most students will be attending school relatively early in their lives, before they have significant social and financial obligations (e.g., raising children, paying home mortgages). Many colleges and universities still refer to people who enroll after the age of about 25 and/or who have family care obligations as “nontraditional” students, even though these people make up the majority of students in many countries.12 The assumption that most students are young and without significant financial and family care obligations leads to the creation of educational programs that are insensitive to the realities faced by older people who do not fit that profile. As a result, the ability to access education often decreases as we age.
The assumption that most students are young is not just wrong, it is harmful because it encourages designing and funding educational institutions based on an outdated model of work and employee experience. Consider the previous example comparing the skills required of medical assistants, x-ray technicians and x-ray machine manufacturers. Imagine a woman working as a medical assistant had taken advantage of company-sponsored training to build her skills to become an x-ray technician, only to see her job eliminated due to automation of x-ray processing methods as a result of innovations in the medical technology industry (a very real possibility).13 Now assume that she is a working parent responsible for supporting the housing and care of small children (also a very real possibility).14 In many societies, it would be extremely difficult for her to enroll in a full-time college program and get the technical skills required to pursue a new career in the growing medical technology industry—the very industry that built the technology that automated her old x-ray technician job. This might have been a viable option when she was younger and had no family care responsibilities and few existing financial obligations. Now, it would work only if she had some way to attend classes instead of working, still pay her rent, and provide care for her children without taking on unhealthy levels of debt. She has the desire to pursue a new career and companies in the growing medical technology industry need more qualified employees. But she has no path to get from where she is now to where she and potential future employers want her to go. This is not a problem that employees or companies can solve on their own, though it negatively affects both parties. It is something that requires changing how education is provided across the broader society.
In a digitalized world, learning and working should be viewed as a single continuum between acquiring knowledge and using knowledge. We focus more on one or the other at different times, but people should think of themselves as both students and employees throughout their lives. By contrast, many societies treat work and learning as mutually exclusive. People are either getting paid to work based on their skills or paying to learn skills so that they can get work. In reality, one of the main benefits people can get from working is learning. Furthermore, if people in a society do not continuously learn new skills, then companies will eventually run out of qualified candidates to hire. This is why companies consider the educational infrastructure of cities when deciding where to open or expand offices and facilities.15 Companies need skilled people to grow their businesses, people need socially supported education to grow their skills, and societies need successful companies to grow their economies. This should create a virtuous circle among all three parties, but it requires societies to provide resources that ensure people can acquire education at all phases of their lives, regardless of their current economic status or family care obligations.
Maximizing Labor Force Potential
The health and resilience of a society's labor market is improved by increasing workforce involvement, movement, and flexibility. Involvement reflects the participation of members of a society in the workforce. It is affected by barriers such as affordable childcare that prevent capable candidates from securing meaningful employment.16 Movement reflects the ease with which employees are able to change jobs to support career progression or in response to shifts in the economy. It comes from having a fluid labor market where companies must attract and retain talent based on providing good employee experiences and where employees can change jobs without being constrained by factors that are irrelevant to their capabilities or career interests. Flexibility reflects the ability of employees to collaborate with companies to design jobs that fit their particular interests. It is about removing regulations and other constraints that force people to work in ways that are unrelated to the actual requirements of their work. All of these are heavily influenced by a society's cultural norms, support systems, and employment regulations.
Enabling Involvement
A company's ability to adapt to increasing workforce diversity and growing skill shortages depends on engaging potential employees across the labor force regardless of their demographic background or current economic situation. Chapter 8 discussed ways that companies can create more inclusive and diverse workforces. But many things that prevent people from participating in the labor market are outside the control of organizations. Most countries have regulations that place restrictions on the ability to employ people based on their citizenship or immigration status. These regulations frequently date back to the 20th century and do not reflect the realities of the modern global labor market.17 Many countries used to have discriminatory policies that specifically denied educational and career opportunities to certain demographic groups. Social policies of extreme discrimination have lasting repercussions that affect employment opportunities available to members of these groups decades after the policies have been abolished.18 Another factor that limits many people's ability to work is access to family care services. The closure of schools caused by the COVID-19 pandemic illustrated how many families were using the public education system as a form of affordable childcare. When the schools were closed, millions of working parents were forced to quit their jobs so they could care for the families.19 As skills shortages grow and demographic diversity increases, societies should strive to remove barriers that prevent people with the ability, skills, and desire to work from obtaining meaningful employment. This is not just about giving people jobs; it is also about providing companies with the talent they need to succeed.
Supporting Movement
The combination of growing skills shortages, accelerating rates of change, and more complicated career paths increases the importance of a highly fluid labor market where employees can easily change jobs. This enables companies to effectively compete for talent based on providing desirable career opportunities, gives employee greater career freedom, and encourages employees to proactively leave jobs that are likely to be eliminated due to automation or industry decline. The advent of online staffing has made it much easier for people to find new job opportunities. Employees are always just a few clicks of the mouse away from applying to another job. The move toward remote work is reducing the biggest historical barrier to labor market mobility, which is where an employee lives. The increasing willingness of companies to rehire former employees also makes the decision to change jobs less risky because people can return to their old employer if the change does not work out as planned.20 However, there are two major barriers in some societies that significantly limit the ability of employees to make career changes: worker protection laws and affordable health care.
Worker protection laws found in many societies trace back to the highly transactional and adversarial nature of employee-employer relationships that existed in the mid-20th century. At that time, many people expected to spend most of their career with a single company. Rather than encouraging movement, these laws were designed to protect employee livelihoods by making it hard for companies to end employment relationships. Although well intended, strict worker protection laws can reduce the willingness of companies to hire people.21 These regulations focus on protecting the jobs people already have rather than helping people move to new positions. This makes employees reluctant to give up existing protected positions for fear that they will be unable to get another position with similar benefits and protections. The problem is the jobs people have now may not exist in the future. Many existing workers protection laws do not reflect the realities of an increasingly dynamic world of work, and as a result they run the risk of limiting the success of the very workers they are designed to protect.
Having access to health care is a key factor affecting people's overall happiness and quality of life.22 Some countries, most notably the United States, have laws and economic structures that create strong links between a person's employment status and their access to affordable health care.23 Companies in these countries may be legally obligated to provide employees with health care insurance or some other method that ensures access to medical services. Making employers responsible for providing health care is a bit like making employers responsible for providing employees with family housing.iv It decreases labor mobility and prevents effective transfer of talent within the economy by hindering the ability of companies to hire employees and the ability of employees to change employers. People in many countries might find it odd to base career decisions on access to health care services, but this is a major factor in the job choices of US employees.24 Unemployment also becomes more devastating as families lose both their income and their health care simultaneously. People can control much of their spending, but health care is a cost that people have little ability to control. If countries want to encourage a highly adaptable labor market, then they should seek to break links that tie access to health care to a person's employment status.v
Supporting labor market movement is critical to building more resilient societies. Providing people with a basic level of economic security during job transitions enables employees to find better quality work and decreases health issues.25 It also decreases the negative effects that fear of unemployment has on employees and their families.26 This is good for employees and societies, and it is also good for companies. When employees feel supported in making job transitions, they are more likely to consider career changes. This enables companies to hire employees who might otherwise have remained in a less beneficial job for fear of what they could lose if they left their existing employer. It also increases confidence of existing employees to take risks to advance their careers knowing that losing one's job, although not desirable, is unlikely to devastate the lives of themselves and their families.
Allowing Flexibility
One rarely hears the words regulation and flexible in the same sentence. Job regulations and laws governing work processes and employee-employer relationships play an important role in societies, but many existing job regulations ignore the growing complexity between people and work. Chapters 4 and 5 discussed how companies are using flexible job design and job sculpting to create roles tailored to meet the unique interests of people. But I have yet to see a job regulation that can be shaped to fit the unique work preferences of individual employees. Job regulations force employees and companies to comply with standard policies regardless of whether they make sense or are even relevant to the job. To be clear, I am not against job regulations! The history of work provides countless examples illustrating why companies should be held accountable for treating employees fairly and creating safe and healthy work environments. The issue is that many existing regulations are based on assumptions that no longer make sense given how much technology has changed work. For example, mobile phones did not exist in 1938 when the United States created the Fair Labor Standards Act to govern how employees are paid for their time.27 As a result, many companies do not allow employees to access work systems on their smartphones for fear that they will be held in violation of not paying employees for time spent on work-related activities.28 Employees may want to access company smartphone apps from their homes but are prevented by a regulation that was written at a time when apps did not even exist. Other examples can be found that relate to one-size-fits-all laws applied to contract employment, part-time employment, and even use of e-mail on weekends.29 Regulations are important to protect employees from exploitive work practices and unsafe work environments but should not prevent employees from creating beneficial work arrangements tailored to fit their unique needs.
Technological Accessibility
Several years ago, I had an opportunity to visit Tanzania. While driving through a small remote village, our guide commented that within the year the village would grow into a small town. When I asked what was driving this growth, he shared “they just ran a power line to this town. That store is the first building in this entire area to have access to reliable energy.”vi His comment emphasized how much of an impact access to reliable infrastructure has on economic opportunities in a community. Reliable energy, clean water, and safe transportation were critical to the economic growth of communities during the manufacturing age. As we enter an age of work characterized by digitalization, an additional critical element of infrastructure is access to affordable and reliable internet connections.30
Almost every work practice and method discussed in this book involves online technology in one way or another. This includes solutions to find jobs, take training courses, collaborate via shared work platforms, or simply send an e-mail to a colleague. People cannot do these things if they cannot access the internet. The availability, bandwidth, and cost of internet access varies widely across societies, with the highest cost and lowest quality typically found in rural and/or poorer areas.31 People without internet access are prevented from fully participating in the labor market. Companies cannot access talent in these communities because there is no way to connect with them. At the time I wrote this there were over 10 million open online job postings in the US32 and about 25 million households in the US that did not have internet access.33 How many people in those 25 million households might be qualified to perform one or more of those 10 million jobs?
Corporate Social Advocacy
Corporate social advocacy refers to companies taking a stance to influence social-political issues.34 It is beyond the scope of this book to speculate how societies should solve issues as complex as providing access to health care, education, and technology, or rewriting employment regulation, but these issues matter to companies striving to improve the employee experience and create more agile, adaptable workforces. These are often viewed as political topics, but they affect the success, growth, and survival of companies, which is why companies should engage their communities around these broader social issues. Corporate social advocacy goes beyond making pledges on corporate websites and launching internal initiatives to attract and engage talent. It involves companies using their economic power to drive positive change in the societies where they operate. This ranges from supporting local programs focused on education, health, or environmental improvement to exerting pressure on governments to create more equitable and sustainable societies.35 The importance of corporate social advocacy was memorably explained during a conversation I had with several company leaders discussing social equity in the United States. The leaders noted that social equity is not just about creating better lives for those in the community. It is about creating better lives for employees and customers. Our employees and customers are part of our community. The community is us.
Notes
- i The term employee experience was not actually in use when Ford was alive.
- ii This statement was viewed as controversial when Ford said it in 1926. A century later many employees still cannot afford to buy the products and services they create. This is perhaps neither good nor bad, but it is interesting to think about when one considers the relationship of people to their work.
- iii Like most commentaries about history, this is only partially true. Providing public education was also fueled by altruism and the belief that democracies cannot effectively function without an educated citizenry.
- iv This was a common practice in the industrial age when “company towns” were extremely common. These towns could have benefits but were also the source of highly exploitive work practices because they gave employers such extensive control over the lives of employees (see The Company Town: The Industrial Eden's and Satanic Mills That Shaped the American Economy by Hardy Green).
- v This raises questions about who should be responsible for ensuring people have access to health care, which is an extremely politicized topic in the US that is well outside the focus of this book.
- vi Sub-Saharan Africa has some of the lowest levels of energy access in the world. Fewer than 50% of people have access to reliable energy in many countries ( https://www.oecd.org/environment/cc/climate-futures/Achieving-clean-energy-access-Sub-Saharan-Africa.pdf).