What Is the New Employment Deal?

The employment deal has evolved since COVID-19, and progressive organizations are working with employees to increase both employee engagement and productivity. Three dimensions are key to the deal.

COVID-19 has transformed the relationship between employers and employees. Today’s new employment deal centers on positively impacting employees’ lives while improving talent outcomes for employers. Organizations are providing employees more flexibility than ever before, creating a shared purpose and building deeper connections with employees.

“The employers that get this right will have a more engaged workforce, greater employee retention and better ability to attract top talent,” said Brian Kropp, Distinguished VP,. Research, Gartner, at the Gartner ReimagineHR Conference, taking place virtually in the Americas and EMEA.

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3 key elements of the new employment deal

HR leaders at progressive organizations are evolving their employment deals in three ways that improve employee engagement yet encourage productivity.

No. 1: Driving performance via flexibility

When the COVID-19 pandemic struck, nearly every employer shut down their workplace, and employees began working remotely full time. Some employees are now back in the office, but many continue to work remotely. Progressive organizations have embraced radical flexibility, giving employees control over where, when, and how much they work in this hybrid model.

Where employees have some choice over where, when and how much they work, 55% are high performers

The Gartner 2020 ReimagineHR Employee Survey reveals that at typical organizations where employees work a standard schedule of 40 hours per week in the office, 36% of employees are high performers. When organizations shift from this environment to one of radical flexibility where employees have some choice over where, when and how much they work, 55% of employees are high performers.

Gartner research shows that the number of high performers in the average organization increases in environments where employees have choice over where, when and how much they work.

No. 2: Creating a shared sense of purpose

Organizations must go beyond corporate messages to real behaviors, and leaders must actively get involved with the societal and cultural debates of the day. A 2018 Gartner survey found that three-quarters of employees expect their employer to take a stance on current societal or cultural issues, even if those issues have nothing to do with their employer. Those demands have only become more urgent during recent protests demanding social equity and justice.

The number of highly engaged employees increases to 60% when the organization acts on the social issues of today

CEOs commonly get involved in current societal or cultural events by issuing a corporate statement, believing that by making a statement they will meet employees’ desires for the organization to get involved. However, Gartner research found that only issuing a corporate statement degrades employee engagement versus the status quo of doing nothing at all. When organizations put actions behind their words — by reallocating resources, changing suppliers, giving employees time off to volunteer, etc. — the number of highly engaged employees increases significantly. 

The Gartner 2020 ReimagineHR Employee Survey found that while 40% of respondents are considered highly engaged employees, this number increases to 60% when the organization acts on the social issues of today.

No. 3: Building deeper connections

HR often tries to increase employees’ performance at work by providing things — new technology, tools, infrastructure and training. These tactics solely focus on an employee’s work, completely separate from their life. The COVID-19 pandemic has made clear to employers and employees that work and life cannot be treated as two separate constructs.

Employers that support their employees more holistically realize a 21% increase in high performers

HR is now trying to help leaders forge deeper connections with their employees by asking different questions, including:

  • How can we support the individuals that work for us in their personal lives?
  • What can we do to support individuals in their family?
  • How can we support individuals in the community where they live?

According to the Gartner 2020 ReimagineHR Employee Survey, when employers develop deeper relationships with their employees, there is a 23% increase in the number of employees reporting better mental health and a 17% increase in the number of employees reporting better physical health. Employers that support their employees more holistically realize a 21% increase in high performers.

To build deeper connections with employees, organizations are offering professional counseling services to support mental health, providing free access to learning and development resources to friends and family members of employees who have been impacted by COVID-19, and helping employees who are also parents with childcare and virtual learning.

“When organizations take a more holistic viewpoint of their employees, employees report that their employer has a positive impact on multiple aspects of their lives,” said Kropp.

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