What should employers do to make work more enticing?

For employers facing a hiring or a motivation challenge, Hamish McRae offers five simple ideas

Most companies proclaim that they respect their staff, but deep down, do they? (Getty)

Some day in the future, the Great Resignation will become the Great Scramble for Jobs, but not for a while yet. As unemployment continues to fall across the developed world, wise employers should figure out how to attract and retain talent.

The labour shortage is particularly acute in the UK, with unemployment at 3.6 per cent. In the US, there was a climb in unemployment in August from 3.5 per cent to 3.7 per cent, but that was partly because of the annual wave of new entrants into the job market, as young people started out on their careers. In July, UK unemployment was at a 50-year low.

In Europe, rates are higher overall, at 6.6 per cent in the Eurozone and 6 per cent in the EU as a whole, though rates vary enormously across the bloc, from 2.3 per cent in the Czech Republic to 12.6 per cent in Spain.

So what should companies do? To oversimplify the situation, there are two issues. One is how to hire and retain. The other is how to motivate. Not only are significant numbers of people dropping out of the job market, but there has also been a mood among employees that they should do their job they are contracted to do in the hours they are paid for, and nothing more. They should not go the extra mile to try and outperform.

There is the “lie flat”, or tang ping movement, in China, and “quiet quitting” in the US, where Gallup found that half the workforce apparently took this approach. In the UK, there is the longer tradition of “work to rule”, where workers precisely carry out what is specified in their contract but do nothing more. However, this has long been used as a form of protest short of a strike, rather than a new social phenomenon.

Quiet quitting is different from dropping out of the labour market altogether, but I suspect that the appropriate response to both from employers should be pretty much the same. It is for the business schools and management consultants to develop the complex reward schemes they are famous for, though the way bonus schemes have grown has created a lot of unpleasantness in the workplace.

But here are five straightforward ideas for employers facing a hiring or motivation challenge. If you want an acronym, there is the unfortunate one of TRASH.

Train: training is one clear thing that employers should do, not simply because better-trained staff are more efficient or do the job better – but because they are adding to the human capital of their employees. If people feel they are being invested in, they are likely to stay with the employer that does that investment. It is the moment they stop that investment that people feel they need to move on.

Respect: most companies proclaim that they respect their staff, but deep down, do they? Inevitably, there will be staff turnover but employers need to respect the choices that their people make, even if they disagree with them. And the other part of the bargain is if they do respect their staff, the chances are that in some way or another that will be reflected.

Accept: some staff will want a transactional relationship, where they simply do the job they are asked to do and nothing more. This is quiet quitting. If that is what people choose to do, that’s fine. Very few jobs now are for life. Companies grow, taking their employees with them, while other ones go bust. Even the public sector no longer offers security of employment, though it does in general have better pensions than the private sector. So there is nothing wrong with quiet quitting if that is what people want to do. Firms need to take that on board.

Share: one of the truly troubling features of the past few years has been the way in which huge incentives – share options and the like – are handed out to senior employees, while people in the middle and lower ranks get nothing. Of course, there are differentials in the rewards people get, and there have to be. But the system has become corrupted.

To keep up to speed with all the latest opinions and comment, sign up to our free weekly Voices Dispatches newsletter by clicking here

Pecking away at these excesses will take a decade and more, but the sooner a start is made, the sooner the world will recover its confidence in the mixed-market economy. One way to reduce the sheer unfairness is to find ways of getting all staff to have some share in the success of an enterprise, be it profit sharing, creating share options or properly-constructed bonus schemes.

Help: that is a culture that seeks to help staff in their daily lives, over and beyond the transactional relationship. Everyone at some stage of their life needs help – anything from funds to help raise the deposit for a home, through to support when family troubles require compassionate leave. A well-run enterprise will have resources that no individual has. Companies show their class when times are tough, as they have been over the past two-and-a-half years, and that is noted.

Of course, there are many other ways in which employers can cope with the hiring crisis, and the current situation in the labour markets will not last forever. But they need to realise that the world is very different from the long era of high unemployment that has persisted for much of the past 40 years. If they fail to adapt, it will be they who are trashed, not their employees.

Hamish McRae’s new book, The world in 2050, is published by Bloomsbury