Research: Why Rejected Internal Candidates End Up Quitting

by JR Keller and Kathryn Dlugos for Harvard Business Review

There is perhaps no better experience for a hiring manager than seeing the resume of an outstanding internal candidate land on their desk. You can fill the job immediately and, because current employees know the organization and its quirks, they require less handholding in order to get up to speed quickly. You also rarely have to pay the premium typically required to lure in external candidates. As an added bonus, hiring an internal candidate signals to other employees that they too have a future in the organization, making it more likely that they will look internally when contemplating their next career move.

Given these benefits, firms have been expanding their efforts to make it easier for current employees to learn about and apply for new internal opportunities. Creating more open internal talent markets certainly increases the odds that a hiring manager will find that perfect internal candidate, but it also means that hiring managers more often find themselves in the unenviable position of having to tell other employees that they did not get the job. While good data on internal application patterns is hard to come by, recent estimates suggest that managers can expect to receive an average of 10 internal applications for every open job, a number that was confirmed in our conversations with talent acquisition leaders across more than two dozen large organizations. That means it is often the case that 9 employees — 10 if you hire an external candidate — hear “no” each time a job is posted.

How do those rejected employees respond? They respond poorly, at least in the short term. After all, no one wants to be turned down for a job, and the sting is often greater when you are told “no” by your current employer. Studies have shown that internal rejection leads to reduced job satisfaction and reduced commitment to the organization. Rejection can also engender feelings of envy toward the workers who “beat them out” for the job or lead employees to engage in counterproductive work behaviors, such as stealing from their companies. If employees stick around a few months after rejection, however, these negative attitudinal effects tend to fade away.

But many employees decide not to stick around. In fact, research indicates that rejected internal candidates are nearly two times as likely to leave their organizations compared to those who were either hired for an internal job or had not applied for a new job at all. The lost productivity, combined with the costs of finding replacements for these employees, is often substantial. We wanted to figure out how firms might systematically reduce the likelihood that rejected candidates will exit. Fortunately for firms, our research suggests that while rejection may be inevitable, turnover is not.

We analyzed just over 9,000 rejection experiences of employees at a Fortune 100 company over a five-year period. A key insight from our research is that employees do not apply for jobs solely because they want a new job right now; they also apply to learn what opportunities might be available to them in the future. If an employee is rejected today, they are more likely to stick around if they feel they will have good chance to advance tomorrow. Because flatter hierarchies, rapidly changing job requirements, and increased external hiring have combined to leave employees perplexed as to what career paths look like within their organizations, the easiest and most straightforward way for employees to figure out what opportunities are likely to be available — both today and in the near future — is to apply for a job. While a rejection is a clear indication that the employee is unable to move into a role now, employees also pay close attention to two aspects of the hiring process to determine whether they are likely to be able to move into a similar role in the future.

Did they interview with the hiring manager?

We found that internal candidates who were rejected after interviewing with the hiring manager were half as likely to exit as those rejected earlier in the process. The reason is twofold. First, because hiring managers usually only interview a very small number of candidates (recent estimates suggest about 2% of applicants), getting an interview signals to the candidate that they already possess many of the characteristics needed to move into the job. Second, an interview provides a forum for hiring managers to give feedback to candidates about any knowledge and skills they may currently lack, as well as how to acquire them if they wish to be hired for a similar job in the future.

In contrast, employees who do not advance to the interview stage tend to feel that their application was not given serious consideration and rarely receive concrete feedback about how to improve their chances of success in the future. They are therefore more likely to look externally for subsequent advancement opportunities.

Important to note: Having someone from HR interview a candidate is not a substitute for a hiring manager interview. In fact, we found that rejected candidates who interviewed with HR but not the hiring manager were just as likely to leave as those candidates whose applications were rejected as part of the automated pre-screening process baked into most applicant tracking systems.

Were they rejected in favor of an internal or external candidate?

We also found that a rejected candidate’s likelihood of leaving was cut in half if they were passed over in favor of an internal candidate rather than an external candidate. Why do candidates seem to pay such close attention to whether a colleague or an outsider was hired? Not surprisingly, employees believe that the past predicts the future. When they see their organization favor an external candidate, they assume they will have to face external competition for similar jobs in the future, lowering their own chances of being hired. When employees see a colleague get hired, they assume that internal candidates (like themselves) will be favored in the future. They are therefore less likely to explore external opportunities.

Additionally, seeing a colleague get hired initiates a positive, upward social comparison process, wherein rejected employees feel as though they can emulate those employees’ successful mobility attempts in the future. We ran additional analyses that supported this argument: rejected internal candidates who were more similar to the winning candidate (in terms of functional expertise and tenure in the company, for example) were much more likely to stick around following a rejection.

Given these results, what should companies do?While it is impractical for most companies to guarantee that every internal applicant will be interviewed, firms must be strategic in considering which employees are interviewed.

Consider the case where a star employee in the marketing department applies for a finance job. It is quite possible that the hiring manager has no idea that this employee is a star in marketing, and it would be reasonable for a hiring manager to be hesitant to interview someone that has little related experience. However, not interviewing that candidate doubles the likelihood that he will leave the company. Organizations should therefore ensure that their applicant tracking systems have a capability to flag applicants whom the organization wants to retain and require that they be interviewed. To prevent hiring managers from being overwhelmed with internal applicants, some of whom might not be right for a given job, we suggest that organizations be thoughtful about who they include on a “must interview” list.” They might also redirect workers to other jobs within the firm for which they might be better qualified. Companies such as IBM, for example, have developed technology that explicitly provides individualized information about alternative internal career paths through online career management tools.

While we do not suggest that organizations should only hire internal candidates, our work does suggest that organizations should carefully consider whether to hire an external candidate when there is a viable internal candidate. External hires can bring valuable knowledge and new perspectives into the organization, but doing so also increases the odds that current employees will take their own knowledge elsewhere.

In short, companies that strategically manage their internal talent market are better positioned to keep rejected employees onboard.

Rethinking total reward strategies

Pay, incentives, and benefits haven’t significantly changed for decades, but people’s preferences have. Employee compensation needs a rethink if companies are to attract and retain talent.

by Andrew Curcio and Alastair Woods for Strategy + Business

Recently, a major US insurance broker with 20,000 agents started to question why so many were leaving the company—and taking their business books with them. The answer lay in the data about reward. It turned out the company was significantly out of touch with what people wanted. The company’s employee preference surveys had not been translated into the type of benefits it was offering. Based on the new analysis, the company redesigned its performance-based compensation, reduced equity awards, improved supplemental healthcare, and implemented a personalized training and development portal. The result: increases in agent sales performance (of 5 to 20%), engagement (up to 21%), and employee satisfaction and retention (up to 20% in some areas). What’s more, all of these gains came with a decrease in compensation costs of 8 to 12%.

Similarly, a global bank was able to redesign a costly reward package that was failing to retain key talent when it realized that what employees wanted was more than money and shares. They valued choice—especially the flexibility to control certain aspects of the employee experience, including training, working patterns, and even their home office setup. The bank made a number of changes to its offerings, created a platform for individuals to mix and match different corporate benefits, and ended up saving as much as US$2,800 per employee per year while maintaining (and often increasing) retention and employee satisfaction.

These are good examples of why it’s important to regularly rethink old practices. Over the past decade, what people value in terms of employee benefits packages has changed, even though the fundamentals of corporate rewards have not. Year after year, most employers offer the same menu of choices—health benefits, pension contributions, gym memberships, cash incentives—without bothering to ask employees which ones they prefer and which ones they value most highly.

Such complacency has costs. If companies were to ask whether the rewards they offer make a difference, they’d get a shock. Today’s workforce is more diverse than it used to be, attitudes toward work are evolving, and employee preferences are changing. And the speed of that change is only accelerating in the post-COVID-19 world. We know this because for ten years we’ve been collecting data—more than 50 million data points from more than ten million surveys undertaken with global companies—on the trends in employee preferences for financial and nonfinancial benefits, and how much value employees place on them. What we’ve found makes it clear that it’s time to rethink the approach to rewards.

If companies were to ask their employees if the rewards they offer make a difference, they’d get a shock. Today’s workforce is more diverse, attitudes toward work are evolving, and employee preferences are changing.

A key trend we see in the preference data is that employee populations have become more heterogeneous. That means that standardized approaches will rarely lead to an optimal result. Employers need to understand preference at the individual level—in other words, from the bottom up, not from the top down. Rather than offering a plethora of alternatives for people to choose from, the list of options should reflect an understanding of the potential impact on every single employee, not just employees in aggregate.

Our proprietary analysis, which uses data collected via TrueChoice Solutions, a preference analytics company headquartered in New York, shows that the relative importance of financial compensation has declined by 11% over the past decade. The importance of other types of benefits—medical, dental, vision, and life insurance; wellness and supplemental health benefits; and child care—has doubled. Work–life balance options and training and career development have tripled in importance (see chart). But HR departments, overly concerned with what other companies are doing or what benefits are most cost-effective, are not keeping up.

Old-fashioned engagement surveys provide little or no meaningful insight into reward strategies because they focus on a point-in-time sentiment rather than a gauge of employee preferences. Companies need a new approach to understanding the big picture of reward that will allow employees to tailor their options. Our data suggests that in many cases, as with the insurance and bank examples above, this will cost companies less than their current blanket reward packages while yielding measurable improvements in engagement, satisfaction, retention, and performance. We suggest a four-step approach to designing reward packages that are fit for today’s changing world: start with the data, customize, communicate, and, continually monitor.

How we got here

Traditional incentive-based pay started with the dawn of industrial manufacturing in the 1920s, when workers were given one-time cash bonuses to meet quotas. The 1940s saw the introduction of longer-term incentives to deliver sustained performance. And through the decades, inducements have been introduced to encourage behavior change and drive results, especially as the global war for talent escalated.

The annual bonus and ratings-based performance management processes that most organizations use today took hold in the 1980s. Companies that wanted to offer more simply added benefits to their offerings, such as company cars, gym memberships, private medical insurance, and cafeterias with free food. Once these became standard, companies that didn’t follow suit became uncompetitive.

That takes us to about 2010. Although some tech companies and startups have sought ways to differentiate themselves (vegan cafeterias, unlimited time off), for the most part reward offerings have not evolved. Recently, environmental, social, and governance (ESG) issues have emerged as a factor in the way people view their relationship with their employers and technology. In a recent PwC survey of 2,500 employees in the US, 84% said they wanted to work for a company that valued ESG. That also includes how it rewards its staff. At more senior levels, bonuses are increasingly based on delivering on ESG metrics, for example.

Companies differ by sector in the types of employees they have. Not everyone wants a gym membership in lieu of higher pay, for example. Nevertheless, our underlying TrueChoice data shows that it’s important to ask people the right questions and understand that how the reward offerings are valued is changing. Some of the topics to ask about:

Well-being. In many instances, employees are willing to trade 20 to 25% of their salary for a much better work–life balance. Understanding this can reduce costs and improve employee well-being.

Healthcare. Supplemental healthcare offerings, such as dental care and private care in countries with a national health service, continue to increase in perceived value for employees and are now worth at least 1.5 times the cost of providing such benefits. This ratio might even increase in the wake of COVID-19.

Purpose. If a company is perceived by employees to live its “sense of purpose,” people consider that to be worth as much as 20% of the total reward in comparison with companies in the same industry that do not.

Training. The perceived value of training and development has almost doubled in the last five years. A person will accept a job at a company that offers a strong development path over a company that doesn’t, even if the job pays less. And digital upskilling is viewed as highly valuable by most employees.

Lifestyle. Benefits such as the provision of a car, a phone, internet service, and a travel allowance are increasing in perceived value even though they can affect taxes.

Pensions. For younger employees, pension contributions by an employer often yield a low perceived value when compared with the cost.

Even though there are demographic and cultural idiosyncrasies to the data, these insights start to help us think differently about what employees should and shouldn’t be offered.

A new urgency

The COVID-19 pandemic and its effect on where and how people are working have given HR departments good reasons to rethink their reward offerings now. The blurring of the boundaries between work and home and the emergence of hybrid working means that traditional structures are no longer fit for purpose. Couple that shift with an increasingly diverse workforce that is looking for new approaches to rewards, and it’s clear companies need to make adjustments.

For example, a London-based banking organization we’ve worked with is planning a “return to work” road map that incorporates flexible working. Its traditional offerings of a car allowance and high-cost-location supplement (also known as London weighting) are no longer relevant for some. Instead, it should think about providing well-being support, helping with home office setup, and offering training to future-proof skills in a changing organization.

In the current squeeze for global and local talent, PwC Australia decided to take a new look at its rewards and benefits options to understand what influenced people to work for the firm and stay. “Like many [other] organizations, we have been challenging ourselves to reimagine how we do things in response to the uncertain global environment. This drove us to consider something beyond the usual market analysis, benchmarking, and tinkering with our old systems,” said Catherine Walsh, head of people and culture at PwC Australia. 

The data showed clearly that although financial reward remained important, career development, skill-building, mentoring support, and well-being were much more than afterthoughts for most people. The analysis looked at the “whole person” and not just the “person on the job,” taking into account employees’ stage of career and stage of life. Then, using predictive analysis, the organization can restructure the menu of benefit choices. This approach can yield a return on investment that is up to five times by giving people what they want and not paying for things that are not valued. “From pay, bonuses, recognition, career paths, promotions, development, flexibility, and hybrid work to social inclusion and personal impact, our new model truly reflects what our people value most, depending on level and stage of career,” said Walsh.

Here are four key areas to consider to create rewards that work for you and for your employees:

Data and insights. Understand your employees and your workforce segmentation. Collect a series of data sets from engagement surveys and real-time preference analytics that give employees choices. These can be cross-referenced with other data, including demographics, locations, and career development goals, to elicit rich insights and identify what is valued. Companies can use predictive analytics to make evidence-based decisions and apply the results to reward offerings. Because financial compensation appears to be declining in importance compared with other rewards, companies should ask what employees would trade for cash, for example.

Customize and be creative. Understanding the data and insight allows companies to personalize their total reward packages, offering “deals” that bundle types of rewards, benefits, and experience. Our data indicates that if employees feel they have choice and control, they place greater value on the overall offering. Reward today might even include choices involving environmental impact or time with the family.

Using the data, companies can step out of the traditional rewards silo and come up with new rewards to match the new ways of working. Two of the main drivers of preferences and value are the life stage of an individual and that individual’s career aspirations. Understanding these drivers for each employee should inform the new ways of rewarding people, with more focus on learning, mentoring, career development, and well-being than on financial reward. Customization is challenging, as the added complexity generally costs more. We have found the best path to improved business performance is to apply an 80/20 rule: maintain 80% of the current offering (albeit streamlined and simplified) and redesign 20%.

Communicate and implement. Once the total reward offerings have been personalized, they need to be effectively communicated. The value proposition needs to be explained clearly. Our research shows that 80% of people expect a more consumer-based experience in the workplace. Importantly, employers need to combine such an experience with the ability to personalize offerings and provide support and guidance for those decisions. It should be as easy as using a restaurant delivery app, for example, to sign up for a customized reward package. A significant driver of perceived value can be found in helping employees answer the question “What is right for me?” However, most employers fall short in this area and in describing their total reward offerings. More than 70% of employees feel they do not know or understand what benefits their employer offers and would value better guidance and decision support.

Increasingly, companies are tying rewards messaging to a broader agenda—for example, upskilling and learning pathways, or agility and internal mobility. One company we worked with tied its offerings to “limitless possibilities” and gave individuals control over learning playlists, projects, and working abroad.

Monitor and evolve. Leaders need to be agile and recognize that the landscape will continue to transform. Employee preferences will change. Today, “learning is the new pension.” Companies can experiment with offering a learning pot, or allowance, for example, directed to new skills for the job; education could be traded off against pension contributions. Or there could be incentives for “intrapreneurship,” such as a points system for creative contributions to the company.

Customization doesn’t mean absolute choice. Employers create offerings based on employee preferences, which is why step one—data and insights—is so important. And trade-offs need to be quantified. It may be too expensive, for example, to offer everyone the same upskilling opportunities.

Today’s total reward offerings need to keep up with the dynamic and increasing heterogeneity of preferences and perceived values of employees. Competitive salaries are important, but they are only one piece of the puzzle. It is critical that companies focus on the needs of the whole person and not the requirements for the job, and offer the benefits employees value. The real differentiator for companies looking to attract, keep, and motivate talent today is customization and communication. Employers that transform their total reward offerings with this mandate in mind will create a sustainable win for all stakeholders and have a significant competitive advantage in the ever-present war for talent.

Author Profiles:

  • Andrew Curcio is the joint global leader of the reward and benefits practice of PwC. He specializes in solving complex people problems for global organizations, focusing on total reward and performance improvement. Based in Melbourne, he is a partner with PwC Australia.
  • Alastair Woods is the joint global leader of people analytics at PwC, working with multinational global clients. Based in London, he is a partner with PwC UK.

How To Say Thank You To Your People

Gratitude doesn’t have to be complex to be powerful. Dr. Bob Nelson, author of 1,501 Ways to Reward Employees, offers seven simple tips.

By Bob Nelson for Chief Executive Magazine

1. It isn’t about money. “Money is compensation,” says Nelson. “Compensation is a right, recognition is a gift. Part of why recognition means so much is you don’t have to do it.”

2. Timing is everything. Nelson urges leaders to lose no opportunity to praise swiftly, sincerely and proactively. “You can do a great praising in 10 seconds in the hallway. The sooner you can catch people doing something right, the more you reinforce it, the more likely they’ll be repeated. So, if you see something, say something.”

3. Be sincere. “It has to come from the heart to be sincere, which sometimes is a difficult thing to teach someone. Some of the sincerity comes from specifics. Use specifics. Tell them what you heard, what you saw, what came to your attention. That gives it more credibility.”

4. Make it personal. “Which of course is tough because you can’t be everywhere all the time. But when you can add the personal touch, when you can do it face-to-face or with a direct phone call, that’s going to have more power.”

5. Praise, then stop. “A lot of executives…they’ll say something nice and then, they’ll take it away with what was wrong with the project, that there were typos or whatever it might be. My advice is to just stow that for now. Keep it 100 percent positive. Managers and leaders do this so infrequently—so don’t mess it up when you do it, keep it pure.“

6. Make it a habit. “I like to think of ways you can work it into your daily pattern, for instance, at a staff meeting Monday morning, that type of thing. You can use that initial start time to call out recognition of good things individually for the team, for the company. That’s very powerful.”

7. Be proactive. “You’ve got to actually look for opportunities to acknowledge and be grateful for people. If you’re just reactive, you end up being reactive around the mistakes. If you’re an executive, it has more punch, more power. Often it’s more symbolic, and it sends a message to other people that this is something we all need to do.”

Work-life boundaries continue to blur: How the pandemic has changed co-living

By Suzanne Bearne for Digiday

With remote working now an option, last year Ellie Halls decided to swap Clapham in southwest London for the south of France for a month.

Rather than stay in an Airbnb apartment, the events manager, 41, decided she wanted more of an opportunity to meet new people. Inspired by a friend who had previously stayed in a similar set-up in Lisbon and New York, she booked a space at a co-living property in Montpellier.

There, Halls found herself with an instant crowd of potential friends. “As soon as I arrived everyone was really friendly. I headed to the beach with someone and joined a WhatsApp group for the building. There was always something to do.”

Halls, who booked her own private bedroom, said the extra cost of working from various meeting rooms meant she rotated between working in the restaurant, her room and/or in the shared living room or kitchen.

Halls enjoyed the experience so much that she stayed for six months. However, there were drawbacks. “Everyone was quite young. I think it’s better if you’re more like 25 years old than 40 years old. For me, it was a stepping stone, not something long-term,” she said.

It’s difficult to know how many digital nomads there are worldwide, but in the U.S., this cohort surged almost 50% between 2019 and 2020, to reach 10.9 million people, according to a report from business-professional talent marketplace MBO Partners.

With remote working becoming a way of life, and the acceptance of communicating over online communication tools such as Slack and Zoom, working from overseas is set to become even more popular, and no longer confined to digital nomads traveling for months on end.

Emmanuel Guisset, founder of co-living spaces provider Outsite, which has 27 locations worldwide, including in Spain, Costa Rica and Mexico, said it’s been a rollercoaster year for his company.

Local restrictions closed some of the company’s properties in places such as Portugal and Bali, but the U.S. locations remained open. Occupancy in this time, however, ranged. Places such as Hawaii and San Diego were full during spring and summer 2020. By September, Outsite saw “a huge surge in demand in lifestyle cities and remote and outdoor locations,” Guisset said. But locations like New York and San Francisco “only recently returned to normal occupancy.”

The company had to adapt the spaces and rules for the pandemic. “Some properties had shared rooms and we suppressed that. We also implemented COVID protocols in case we had COVID cases in the house.” He said they didn’t impose COVID-19 test or masks mandates in the properties but most of its members used masks in common areas. “We basically let our members decide what was best for them in every property,” he added.

Guisset said Outsite properties are now seeing demand from an influx of people who previously didn’t have the opportunity to work from a different backdrop.

“We are seeing new kinds of jobs but also more couples and small families,” he added. As a result, the company plans to change its positioning from co-living to “accommodations for remote workers and community.”

“A lot of those new members want private spaces and also community but that doesn’t necessarily mean they want to share living spaces,” said Guisset. Outsite is now experimenting with private apartments or bungalows in locations like Costa Rica where members get access to community activities and the co-working space. The company is also considering what it can offer families.

Demand for personal space is far more evident in the wake of the pandemic, said Ant Steele, co-founder of Yon Living, which connects spaces across the likes of France, Sicily and Gran Canaria with between 10 to 20 rooms for a mature crowd – typically anyone aged between 25 and 45 years-old – to co-live.

“It’s just about providing the option that, in any particular moment, someone can choose to be alone or to be with the group without a sacrifice to their experience,” said Steele, who added that each location offers a small co-working space, and each room has a private workspace. “Fortunately, we’ve always had this in mind as we’re going for a slightly more mature demographic and private space seems to hold much more value the older you get.”

Robert Litchfield, co-author of the book Digital Nomads and associate professor at Washington & Jefferson College, Pennsylvania, agrees. “We have all gotten used to more personal space and maybe that will mean people will be inclined away from anything that has a more packed-in, hostel-type feeling,” said Litchfield. “Co-living spaces will have to ask who is the customer they are trying to attract?” For these companies to reach their target audience, they should consider variables that range from cost to personal space to the amount of social interaction they might want to have, he said.

A remote, salaried employee might simply just seek a new experience, Litchfield said.

Steele agrees that this remote-working crowd of “traditional city workers” has a different mindset. “It’s more of a second life for them, for a week or two at a time but with some degree of regularity,” Steele said. To cater to those interests, Yon Living has adapted to offer more of a co-living “lite” experience, which is more akin to an experiential holiday with elements of normal living thrown in – like private desks and home workout equipment – where you wouldn’t traditionally have seen them.

“The boundaries between what is living, working or holidaying have totally blurred,” said Steele.

Employees are concerned about these situations when returning to the new office

by R. Dallon Adams in CXO  for TechRepublic

Turns out, ditching leisurewear is one of the hardest parts about going back to the office after a year of dressing for Zoom success. But what will the new office look like?

In the last year, companies have used a number of strategies and reshaped the traditional office to mitigate the spread of COVID-19 in-house. On Wednesday, Qualtrics released its Future of the Workplace Study highlighting the new office amenities employees want, the drawbacks of remote work and dress code expectations as workers return to the new office after more than a year of telecommuting.

Return to the office concerns

Overall, the Qualtrics study involved more than 1,000 U.S. adults employed either full or part-time. In order, the top two concerns respondents have about meeting coworkers in-person are “being socially awkward” followed by “following proper social etiquette,” and more than one-third of respondents said they would choose a “touchless greeting” when “they see their co-workers,” according to the report.

While the majority of respondents (60%) were comfortable “working in the same enclosed space” as other coworkers, these comfort levels vary markedly across age groups. For example, one-quarter of respondents 55 and older were uncomfortable coworking in an enclosed space compared to 13% of the 18 to 34 age group and 17% for people between the ages of 35 and 54, according to the report.

Office redesign and consolidation

The majority of respondents (62%) said they’d be “satisfied” if company office locations were consolidated to create improved facilities and amenities, according to the report, and employers opening “more satellite offices for smaller teams, like a WeWork” would satisfy about half of employees.

“Traditionally, physical office locations were necessary for employees to get work done. This past year has proven, that’s not the case anymore—employees can drive results and be productive from a variety of locations,”  said Julia Anas, Qualtrics chief people officer.

That means, as companies adapt to the changing workforce landscape, they will need to find compelling ways to make the office a destination space where employees come together to be inspired to connect in person with one another to collaborate and innovate,” Anas continued.

Citing Qualtrics research, Anas mentioned a few of the desired amenities employees want including “more natural light in their workspace, access to fitness equipment, and outdoor spaces where they can collaborate with colleagues.”

In a June report, Next Energy Technologies outlined a number of office redesign elements respondent employees wanted to see at the new office ranging from increased access to natural light inside and increased sustainability efforts like a “reduced reliance on single-use materials.”

Hassan Osman, director at Cisco Systems and Udemy instructor who teaches a course on hybrid work management, discussed a few of the ways companies could reimagine the new office in the months ahead.

“One way is to repurpose the existing office from dedicated workspaces to more hybrid-friendly meeting rooms and quiet spaces,” Osman said.

“Teams are going to be dispersed between in-office and remote so expect meeting rooms to be used for on-site collaboration and coordination of in-office team initiatives. And quiet spaces to be used for focused work and distraction-free conversations with remote team members,” he continued.

Additionally, Osman said companies could incorporate “hot-desking” strategies to allocate workspaces to employees only when they need them,” noting that this implementation would help organizations “save on real estate costs while maximizing their resource and asset usage.”

Dress code at the new office

Unlike the office environment, remote workers are able to forgo the traditional business attire during the workday and instead don more comfortable clothing. In March 2020, amid the switch to remote work en masse, Walmart sold more tops than bottoms; a conspicuous discrepancy that could be attributed to increased video meetings and the visual focus on attire from the waist up.

“When the global pandemic sent everyone home, work fashion moved to the bottom of everyone’s priority list. Video filters became a substitute for make-up, crocs became the new sneaker, and sweatpants became the norm,” Anas said. “As employees begin to return to the physical workplace they will be looking for ways to combine professional dress with the comfort they experience at home.”

When returning to the traditional office, one-quarter of Qualtrics respondents said that “dropping leisurewear” would be the “hardest change” and other difficult routine changes including “wearing makeup again and getting routine haircuts,” per the report.

As employees go back to the new office, 37% of respondents are planning to dress “casual.” A similar number of respondents (35%) were planning to dress business casual when they return to the office. In general, about half of respondents (55%) said they would “would dress more casually if their office didn’t have a dress code.”

Remote work drawbacks

While working from home may have its fair share of perks a la reduced commute and a lack of dress code, there are a number of professional drawbacks to consider. About half of respondents believe on-site office workers have “career advantage for promotions and raises compared to remote employees,” according to the report, citing “visibility to leadership as the primary advantage.”

“Hybrid work will be an adjustment for many companies,” Anas said. “Leaders who take time to listen to what employees are thinking and feeling and then acting on that feedback will have the ability to create an equitable environment for all employees—regardless of in-person or remote status.”

Additionally, Anas said employer-provided professional development opportunities like “mentorships, training sessions, and networking events” could help organizations “avoid unnecessary gaps between employees.” 

“Doing this in addition to making some adjustments—like increasing intentional communication from leadership, scheduling more frequent 1:1 meetings with managers, or hosting virtual happy hours—can ensure all employees have what they need to be productive and successful,” Anas continued.

What is your personal leadership brand?

To help build authenticity, be clear on the specific values that have guided your career and that you expect others to embrace.

By Adam Bryant For LEADERSHIP magazine

Early on in our careers, we are schooled in the importance of the elevator pitch, so that we can deliver a concise answer if somebody important we meet in passing asks, “What are you working on?” or “What do you do here?” The succinct sales pitch is also an essential skill for entrepreneurs taking turns in front of an audience of investors: they have to be able to capture their killer idea in a dozen or so words.

But in our consulting work with senior leaders, we find there is a specific type of elevator pitch that executives often overlook. It’s the answer to the questions “So what kind of leader are you?” and “What should we know about your leadership style?” Having a thoughtful reply at the ready could be a factor in landing a promotion. But more crucially, providing clarity about your leadership style will help you to build trust with your team. Think of it as your personal leadership brand—what you stand for, including the values that guide your behaviors as a leader, and what you expect from others.

It’s not that people don’t have anything to say in response to these questions. Some will volunteer that they believe in “servant leadership,” or that they are results-driven or believe in excellence and integrity.

And they’re not wrong. It’s just that they use phrases that are so general and at such a high altitude that they don’t provide anything concrete in terms of the behaviors that people can expect from them. The sentiments get muddled with corporate mission statements and purpose statements that often default to a version of “making the world a better place,” a cliché that can easily be skewered. (Think of the HBO series Silicon Valley, a satirical look at life in the tech startup world.)

The value of a personal brand

Just as with corporate values, the real test for your personal leadership brand comes during moments of pressure and stress. Do you abandon your values, telling yourself that you’ll come back to them when things settle down? Or do they matter even more in those moments?

What are the three values that are most important to you as a leader and a colleague—that is, the consistent behaviors that everyone can rely on from you?

When I interviewed Susan Desmond-Hellmann, the former CEO of the Bill & Melinda Gates Foundation, she talked about the importance of being predictable and reliable as a leader. If you can clearly articulate how you would act in a given situation, “people don’t have that burden of always thinking, ‘I wonder what he or she would do.’ It’s pretty clear.”

For example, I was struck by one of the principles that Ron Williams shared with his team when he was CEO of Aetna. He made clear that he expected everyone to always strive to be 15% better. “People can start thinking, ‘If I just keep doing what I’m doing, that’s okay.’ But the world has become dramatically more challenging. Your business is bigger. It’s more complex technologically. You’ve got to master [new things]. You are never done.”

When I asked Williams how that approach came about, he said that professors at the community college he attended, and others in his life, provided encouragement regarding his potential. “The people who were really supportive helped me develop this philosophy of always striving to be better. Eventually, that was distilled into the idea of always pushing to be 15% better in all aspects of life.”

The leadership challenge

Here are some of the prompt questions we use when we help executives work through the exercise of developing their personal, authentic leadership brand:

• What are the three values that are most important to you as a leader and a colleague—that is, the consistent behaviors that everyone can rely on from you?

• How have you lived those values in your career?

• Why are they important to you for driving success?

• If you were recruiting someone to join your team, what would you say to them about your leadership approach and philosophy?

If you try to answer these questions, be certain to give yourself plenty of time for introspection. Make sure you steer well clear of platitudes or any generic statements. Imagine yourself taking over a new team of direct reports who ask you a series of questions in your first meeting with them: “What are your personal leadership values? Why are they important to you? What do they look like in practice? Where did they come from?”

Walmart’s solution to teaching workers kindness: virtual reality

The retail giant is using technology to help employees practice empathy, have difficult conversations during COVID-19.

By: Kathryn Mayer

It’s no secret that the past year has been a balancing act of emotions. COVID-19, a contentious election and civil unrest have made empathy and hard discussions imperative, often while emotions and polarization are running high. It also has been a difficult year for employees who work at brick-and-mortar locations like Walmart and interact with customers—whether those conversations are good or bad.

“With the pandemic, you think, how do workers engage with and interact with customers? You think about empathy; do all of our associates take time to think about how [the pandemic has] impacted our customers? How do they deal with difficult conversations that could occur?” Heather Durtschi, senior director of learning, content design and development at Walmart, said last week during an HRE webinar.

To help its workers have hard conversations, Walmart has relied on virtual reality training that enables employees to prepare for these incidents and practice kindness during stressful and challenging times.

The retail giant started using virtual reality to train its employees through a partnership with Strivr, a Palo Alto, California-based software company, in 2016. But its latest training called “Be Kind”—which trains workers on keeping calm, intently listening, navigating the situation and determining solutions—has proved extremely important for the company over the past year-plus when it comes to helping employees be prepared for difficult situations, Durtschi said.

Durtschi said she saw a piece on the news featuring an angry Walmart customer who was arguing with one of the retailer’s health ambassadors about having to wear a mask inside the store—but the Walmart employee handled the situation extremely well.

“It got pretty ugly, but that associate remained so calm,” she said. “Afterward, when she was interviewed and asked how she handled it so well, it came back to the training she received.”

The software is an engaging way to help train employees. It allows them to react to certain hypothetical situations, then go back and analyze their reactions. “It’s about having the experience of putting myself in [someone else’s] shoes before it even happens,” Durtschi said.

Walmart first partnered with Strivr and introduced its VR software for employee training and development at Walmart Academies nationwide (the training centers attached to larger Walmart stores). After that proved successful, the retail giant rolled out the technology to all of its U.S. locations, providing Strivr’s Oculus VR headsets to all U.S. stores to allow more than 1 million Walmart associates to take advantage of a series of VR training and development sessions. There are now about 17,000 VR headsets in Walmart stores for employees.

“Learning by doing is the best way to learn,” Derek Belch, founder and CEO of Strivr, said during the webinar. “Virtual reality allows for not only learning by doing at that specific task but certainly at scale in the workforce.”

Belch said company and HR leaders who use virtual reality training will not only better engage employees but will save employers significant time.

“[You can] do an eight-hour training and boil it down to 15 minutes in a headset with the learning result being almost identical,” he said. “It’s a no-brainer ROI.”

How Pronoun Training Can Build a More Inclusive Culture

Engaging employee resource groups (ERGs) dedicated to the LGBTQ+ community can help HR leaders drive education, awareness, and acceptance.

By Lacey Ross-Prouty for Training Magazine

Every year in June, people across the globe come together to celebrate Pride Month—a time to honor history, recognize the accomplishments, and share the voices of the lesbian, gay, bisexual, transgender, queer, and questioning (LGBTQ+) community. As members of the LGBTQ+ community and allies celebrate progress toward liberation and equality, many companies stand strong behind their associates in support.

While displays of support are critical in creating a welcoming environment for all employees, corporate Pride Month initiatives should be rooted in action and aimed toward furthering progress. Engaging employee resource groups (ERGs) dedicated to the LGBTQ+ community can help HR leaders drive education, awareness, and acceptance. ERGs can not only communicate the work being done both in and outside company walls but offer resources to help create a culture of inclusion—one where all employees feel empowered and supported to bring their whole, authentic selves to work.

Take Action Through Training

Essential to those resources is gender inclusivity and pronoun training, which is educational programming that seeks to develop employees’ understanding of the components of gender and how to use language as a tool for creating a gender-inclusive world. Employees’ gender identities and expressions may differ from traditionally defined gender norms. Non-binary employees who do not identify as male or female may use pronouns such as “they, them, and theirs” in place of “he, him, and his,” or “she, her, and hers.”

A lack of understanding from colleagues can create an environment in which non-binary employees do not feel comfortable self-expressing. That barrier can be hurtful and contribute to feelings of misunderstanding and miscommunication, which can negatively impact team collaboration and innovation, and even affect relationship-building with customers or business partners.

Just as a name builds self-identity, so do the pronouns a person uses. Ensuring employees understand and respect that importance, and helping them address biased tendencies, can help create a workplace where everyone can thrive.

Train in a Way that Resonates

Whether developing a training program in-house or joining forces with an outside organization, the first critical consideration should be the authenticity of the content. Ensure that you’re bringing in the appropriate subject matter experts to inform the content and delivery. In order to effectively train, the guidance you’re offering must come from a place of awareness and understanding. One organization ADP has collaborated with includes the Ackerman Institute for the Family. Through its Gender & Family Project, it offers gender-inclusivity training, consultation, and educational resources that can help companies deepen employee understanding of gender inclusion.

To determine the mode of training, consider other training programs within your organization and the success they’ve seen in changing behavior. Diving into the data will help you choose a form of communication that will resonate with your unique workforce, whether it’s animated videos, a guest speaker, an interactive workshop, or a combination.

Provide Opportunities for Progress

A core component of any training program is providing opportunities for employees to apply what they’ve learned. Employers should provide opportunities beyond the training for employees to share and recognize one another’s personal pronouns, including customizable e-mail signatures and editable profiles on intranets and employee communication platforms. Team leaders should encourage employees to include their gender pronouns if they feel comfortable doing so, helping to start open dialogues and foster understanding and acceptance. Engaging in leadership is important, as well, and can go a long way in creating a culture that embraces self-expression.

After a year of tremendous challenge and renewed calls for employers to support the well-being of their employees, it’s an important time to reflect on the role training can play in building an inclusive culture.

Privacy and Data Security for HOAs: What Your Community Association Needs to Know

Privacy and Data Security is the body of law that addresses how an organization can collect, handle, and use personally identifiable information and how that information needs to be protected.

Community Associations quite often have and maintain the names, addresses, and financial information of their residents and homeowners. Many criminal groups find this kind of information valuable for identity theft. Such groups often encrypt the data so the Community Association cannot access it to gain leverage and force an organization to pay a “ransom” for its return. Because of this and in reaction to how much sensitive information is held on everyday people in the broader economy, all fifty states have laws on the books that require most organizations to disclose when an unauthorized party has accessed the information. Community Associations—just like any other North Carolina organization—always must act reasonably when the organization makes decisions to do something with personal information or risk negligence lawsuits and class actions.

Unfortunately, North Carolina does not provide statutory guidance on how Community Associations can act reasonably with respect to residents’ personal data, but the federal government has provided frameworks that it recommends. The National Institute of Standards and Technology has published a Privacy Framework and a Cybersecurity Framework that, when followed, allow organizations to identify the data they have, protect that information, control and manage the data, govern the data with set rules within the organization, communicate the roles of each member of the organization, detect malicious or unauthorized activity, respond when an incident occurs, and recover from the incident.

There are a number of practical steps that organizations can take that can avoid or reduce the severity of common compliance pitfalls. The first is to review vendor contracts regularly—at least once a year—to make sure that they reflect an organization’s risk tolerance. Often, a trusted service provider or another vendor can have a breach that impacts the privacy and security of the data entrusted to a Community Association. Without contractual protections, the organization might incur significant costs remediating the problem with little legal recourse to have those costs covered by the party at fault.

Additionally, encrypting data, which is a mathematical process to transform data from readable text to nonsense and back again when a code (called a key) is used, can be an important tool in the compliance toolbox for Community Associations. Under North Carolina law—and the law of many other states—a breach only triggers reporting obligations when the information that was stolen was also unencrypted or when the encryption key was stolen with the data. This is not a silver bullet but, encryption is a practical technology that will be an important part of any compliance strategy.

Cyber insurance can also be an effective means of covering risk. However, insurance is not as simple as buying a policy and calling it a day. Insurers are increasingly raising premiums and lowering caps on organizations that do not take a proactive approach to mitigate privacy and security risks. So while insurance can act as a hedge against devastating effects, it should not be seen as a substitute for a compliance strategy.

We also recommend getting community input on the Community Association’s Privacy and Data Security efforts. Community Associations are necessarily accountable to their residents and homeowners, so understanding stakeholders’ risk tolerance can inform the leadership on how to move forward with a compliance strategy. The laws at issue obviously do not change based on the community’s sentiments, but discussing the matter at an annual meeting can be a good way to communicate what expectations the stakeholders in your community have of leadership.

Challenges and risks of liability and unmet stakeholder expectations are everywhere for Community Associations that do not take a proactive approach to the Privacy and Data Security of their residents’ and homeowners’ information. 

A Job Analysis Survey Of Global Community Association Managers Is Critical To Validating The CMCA Examination

By Madeline Hay, CAMICB Manager of Exam Administration

Over the past 25 years, the Certified Manager of Community Associations (CMCA) credential has been a catalyst in establishing community association management as a discrete profession. The common interest community housing model exists around the world and there has been consistent interest in the CMCA credential, the educational pathways to achieve the credential and the continuing education requirement to maintain the credential. Passing the CMCA examination and maintaining the standards of the CMCA certification is proof that a manager is knowledgeable, ethical and professional. CMCA-certified managers have the skills to safeguard the assets of homeowners’ associations, giving homeowners peace of mind and protecting home values across the globe.

We, at the Community Association Managers International Certification Board (CAMICB), are incredibly proud that the CMCA credential is the only international certification for managers that is accredited by the US-based National Commission for Certifying Agencies (NCCA) and the globally recognized ANSI National Accreditation Board (ANAB). This dual accreditation underscores the strength and integrity of the CMCA credential. As we continue to celebrate our 25th anniversary year, we are reminded of our number one priority: maintaining, updating and validating the CMCA examination. 

The process we use is rigorous, systematic and in strict compliance with best practices in the credentialing industry. A crucial step in this process is completing a job analysis to examine the current state of community association management – the responsibilities of a professional manager and the knowledge and skills required to fulfill those responsibilities. We carry out this process approximately every five years to provide a benchmark for updating the CMCA exam. Our next job analysis cycle begins this year, concluding in 2022. 

The job analysis approach we use involves collecting and aggregating information and insights from job incumbents and occupational experts to determine the content specifications for the CMCA exam. This process is illustrated in the graphic below. A significant component of the process is an electronic survey sent to thousands of association management professionals worldwide to gather information about their job duties and requirements. The survey results will be reviewed with the pool of subject matter experts comprising the CAMICB Exam Development Committee to obtain their input and judgments regarding current trends in the profession and the importance of the knowledge for competent performance in the field. 

As the CMCA credential has grown internationally, this upcoming study will build on that growth. Joseph Caramagno, MA, who leads the survey process and analysis and is a Senior Research Scientist for Human Resources Research Organization (HumRRO), CAMICB’s test development partner said, “While the job analysis survey has taken a global approach in the past, we’re making changes to the process to reach even more managers working around the world.”  Caramagno explained, “The focus for this survey cycle is to fully understand, at a global level, the essential tasks and duties that comprise a manager’s day-to-day work and what they must know to carry out those duties effectively. Additionally, this input will help shape our understanding of the profession.”

The survey will be available to managers all over the world in the second quarter of 2022, and managers at all levels of experience must participate to ensure we have broad representation and an accurate view of the profession.

Said Chair of the CAMICB Board of Commissioners, Drew Mulhare, CMCA, LSM, PCAM, “This process is a critical component to maintaining and validating the exam as the results guide the development of a new CMCA exam blueprint, which assures we are testing what we need to be testing. In addition, this comprehensive survey will help us emerge with a clear vision of what the field of association management around the world is today, how it has changed over the last five years, and what the minimum requirements for certification are when we take that global perspective.”