Florian Frank photographed his corner office in Frankfurt and set up the photo as a digital background. If you have a video call with him, you can see his office potted plant and office window, although he is actually at home under the whitewashed sloping ceiling. The manager who is responsible for advice on all aspects of the world of work and remuneration models at the insurance broker and management consultant WTW (Willis Towers Watson) has not been in the office for weeks.
That doesn’t make Frank a special case. While not everyone can work from home, millions of people can. And those who can do it are increasingly demanding that their employer be allowed to do so. “The pandemic has significantly changed employees’ expectations of their working environment,” says Frank. As a result, what used to be exceptional conveniences such as working from home are now so much the norm that companies can no longer use them to attract new employees. Sometimes they even lose some when they try to force them back into the office. However, they haven’t figured out how else they manage to hire enough new people, says Frank — a big problem, especially now.
76 percent of companies in Germany and Austria expect that they will have difficulties recruiting new employees this year. WTW found this out in a large-scale survey in which a total of 1,650 companies with 11.9 million employees worldwide took part, including 50 mostly international companies from Germany and Austria with 413,000 employees. Result: The Germans and Austrians are lagging behind companies in other countries in Western Europe and the rest of the world, which are also afraid of the shortage of skilled workers and the associated “war for talent”, but not to the same extent. More than half of German companies also believe that they will not be able to keep their current workforce.
There is also some catching up to do when it comes to remuneration
The increase in personnel concerns in this country is rapid. Before the pandemic, only half of employers feared not being able to find enough workers and a fifth feared not being able to keep them. “Companies need to fundamentally revise the way they organize work and what they offer their employees,” says Frank. “German companies always react a bit slowly, especially compared to Great Britain and the USA.” This is due to the culture, but also to structures such as co-determination and the fact that some corona protection measures are handled more strictly in this country and employers have therefore not yet been able to completely adapt to the “new normal” after the pandemic.
German companies also have a lot of catching up to do when it comes to remuneration structures, especially compared to the USA and Great Britain, says Frank. Nowadays, many employees are no longer attracted by higher salaries alone. “Many companies say that they no longer differentiate themselves enough from others with the pure salary as an employer.” What is needed are additional offers for something that HR managers have dubbed “wellbeing”, which should make life more pleasant for employees: coaching, advice on things like retirement provision and investments, sports offers, medical or psychological advice via telemedicine, stress management and so on continue. All of this is worth it. “Good employees are more likely to burn out because they’re more willing to go the extra mile,” says Frank. “When an employee is burned out or has financial problems, they are distracted and also do not perform well.” Many German companies have some of these offers, but no good strategy behind how they use them to recruit and maintain employees.
Especially when it comes to incorporating the new world of work with flat hierarchies, working from home and so on into the remuneration structures, German companies have problems, says Frank. “Many are working on it now because they realize that they can no longer tie salary so rigidly to a specific position at a management level, because people work agilely under very different managers. Then the question of how to assess performance also arises.” Almost all of the employers surveyed want to work on how they will define “careers” in the future, and 80 percent want to revise their remuneration models. A company that Frank advises and that is in an industry that is not particularly attractive for employees wants to present itself as a pioneer when it comes to fair pay, for example, he says – men and women should earn the same amount, and a fair wage that varies measured by their performance. “It remains to be seen how strong all of this has an effect on finding new employees,” says Frank. “But we see internationally that companies that are better positioned there also have fewer problems finding people.”