Legislative initiatives and a generational shift are changing the dynamics of the American workplace. Elliott Dinkin of Cowden Associates urges employers to be aware of these developments and find ways to benefit from the changes.
(Pittsburgh, PA) December 24, 2019—On January 1, California Assembly Bill 5,which significantly limits the circumstances under which a company can classify its workers as independent contractors, takes effect.1 The passage of this legislation may be echoed in other states as well, among them New York, Washington State, Oregon, and New Jersey.2 “No matter what ultimately results from the new law in California,” says Cowden Associates President/CEO Elliot Dinkin, a nationally known expert in actuarial, compensation, and employee benefits issues, “we are going to see a new level of attention—and in some cases scrutiny—given to employer-employee relationships in 2020 and beyond.”
An important factor in today’s workplace, notes Dinkin, due partly to a generational shift and partly to some of the issues surrounding the new legislation, is a pronounced change in the way employees prefer to relate to their employers. Human resources experts refer to it as consumerization, meaning that people in the workforce—more than half of whom are now millennials—look for an employment experience that empowers them to make at least some of their own choices about tasks and goals. Simply put, employees now bring a customer mentality to the workplace.3
Among the vital areas affected by workplace consumerization, says Dinkin, is an organizations’ ability to introduce new technologies, whose success is generally dependent on employee acceptance, understanding and use. Rather than simply imposing innovation from above, studies show that employers should use surveys and group discussions to explore employees’ feelings about new technologies and elicit their help and suggestions—in effect, their managerial collaboration—in making the implementation a success.4
While the consumer-in-the-workplace mentality can help raise employee engagement and smooth a path to ROI, it is, cautions Dinkin, a double-edged sword. One reason the customer experience has become so important in today’s retail economy is that gaining an advantage on the basis of price or assortment is now all but impossible, leaving customer service as the only available differentiator. Consumers are aware of that and have become increasingly demanding: in a recent survey of customers who had encountered poor service, 39 percent said they would never use the offending company again.5
“This same dynamic,” says Dinkin, “plays itself out in the workplace.” Case in point: In a recent Deloitte study of millennials, 49 percent said they would leave their current job inside two years. About 25 percent said they had left an employer within the past two years.6
“The constraints of the economy, such as a projected 6 percent increase in employer-based healthcare costs in 2020, make it difficult for most employers to offer a significantly competitive advantage in terms of salary and benefits. The key is to do what the market requires and at the same time be a valued supplier to your consumerized employees. Make them feel they have a stake—and a hand—in your success. Your candor and consideration will pay big dividends in loyalty, retention, corporate agility, and profit.”
- Said, Carolyn, “AB5 gig work bill: All your questions answered,” San Francisco Chronicle, September 16, 2019.
- Conger, Kate, and Scheiber, Noam, “California Bill Makes App-Based Companies Treat Workers as Employees,” New York Times, September 11, 2019.
- “20 New HR Trends & Predictions for 2020 You Should Be Thinking About,” financesonline.com, November 2019.
- Jaiswal, Kapil, “Digital Dexterity: What is it and Why Does it Matter?”, whatfix, November 14, 2019.
- Hyken, Shep, “Businesses Lose $75 Billion Due To Poor Customer Service,” Forbes, May 17, 2018.
- Friedman, Zack, “49% of Millennials Would Quit Their Job Within 2 Years,” Forbes, May 22, 2019.