For 100 years, global leaders have claimed ‘work’ holds the key to peace and prosperity. It’s in business’ best interest to make sure it happens, says RoZetta Institute CEO Peter Clare
It is 100 years since the International Labour Organization (ILO) was formed. Established in the aftermath of World War One, its goal was to contribute to ‘universal and lasting peace’ by improving conditions of labour to counter the ‘injustice, hardship and privation to large numbers of people’ that could ‘produce unrest so great that the peace and harmony of the world are imperilled.’
Aside from the ILO treating employment as a male preserve in 1919 (check out the exclusively masculine pronouns used in the Preamble to the 1919 Constitution), the goal was laudable – even if ‘universal and lasting peace’ remains unachieved.
New century, same problem
Fast-forward to the recent release of the G7’s declaration on the future of work. It represents recognition from the world’s most advanced individual economies (Canada, France, Germany, Italy, Japan, United Kingdom and United States), plus the European Union, that the ‘reduction of inequalities’ is an international imperative.
The casual sexism of 1919 has been replaced by acknowledgement that ‘gender labour market participation gaps remain a cause of concern.’ Income inequalities, high youth unemployment and gaps in access to education and training systems are also highlighted as problem areas at a time when ‘the world of work is undergoing fundamental transformation’.
For a century, then – a time period in which diseases have been eradicated, space has been explored and the human genome has been decoded – ‘work’ has been recognised not merely as a global challenge that needs addressing, but as a pathway to social nirvana, whether that’s the ILO’s ‘lasting peace’ or the G7’s ‘more inclusive growth, shared prosperity and fair globalization’.
But like a mutating superbug that refuses to be treated by conventional medicine, the ever-changing nature of people means an unconventional approach is required if we’re going to solve the ‘work’ conundrum and reach that nirvana. Which means a wake-up call may be needed.
I have had one of those myself.
A life-changing event
In 2014, I had reached the pinnacle of my career in banking. I had been CEO of Westpac New Zealand for the best part of three years when I was diagnosed with a congenital heart issue. On 17 June 2014, I had open-heart surgery. For three and a half hours my heart was stopped while they worked to fix the fault. I was under anaesthesia for over five hours in total.
Following the operation, July 4 became my personal Independence Day. The doctors told me if I survived until then, I stood a good chance of surviving. Happily, they’ve been right.
This event – not surprisingly, I think – led me to re-evaluate my life. I stopped traditional 9-to-5 (or, more accurately, 24/7) work in favour of dabbling with investments and sitting on a few Boards. I spent more time with my family. I bought a second-hand racing car, which I continue to race on weekends as part of the Radical Australia series. My car number is 47 – for the fourth of July.
Eventually, I was ready to return to work fulltime. But I wanted employment with purpose – I wanted to make a difference, to instigate change.
Open-heart surgery for business
In Australia and other developed economies, it is in the interests of business to take the lead in the solving the ‘work’ conundrum – to do the equivalent of performing open-heart surgery on itself.
There is a perfect storm building for employers. Last year’s Turnover and Retention Report from the Australian HR Institute reveals that the average annual staff turnover is 18%, up from 13% in 2012 and 16% in 2015, and only a shade under the figure reported at the height of the GFC.
Employees are the beating heart of every business. They must be properly looked after if your business is going to live. Yet the ECG results (also known as employee-satisfaction statistics) show there is a big problem.
Employee churn at entry/junior/graduate level is 40.6%. That’s high, albeit down from 53.8% in 2015. The reason is starkly explained in the latest Deloitte Global Millennial Survey. Canvassing over 16,000 millennials (also known as Gen Y) and Gen Z workers, including 800 from Australia, it not only details the evolving priorities and aspirations of millennials and Gen Zs, but also reveals that business is ‘out of step with millennials’ priorities’.
It’s not ‘just a millennial thing’
Compounding the problem for business is the fact that, as the Turnover and Retention Report reveals, employee churn at middle management level is trending upwards: 22.5% in 2018 from 20.7% in 2015. Lack of career progression/opportunities (63.2%) is the key reason for leaving.
The picture is no rosier higher up the corporate food chain, although for different reasons. Of Australia’s 200 biggest companies, only 12 are helmed by women. Similarly, there are 33 female CEOs in the Fortune 500 in the US. Although that has been trumpeted as ‘more female CEOs than ever before’, that’s still less than seven per cent – almost exactly the same as in Australia.
So to recap: the very top level of employment is statistically still a boys’ club, which has to disincentivise the approximately 30 per cent of key middle managers who are women. Middle managers as a whole are starting to feel unsettled, and the next wave of talent is looking for non-traditional ways, like the ‘gig economy’, to make a living and, crucially, gain more fulfilment from their work.
The need for change
We don’t have another 100 years to address this. Businesses have to change and disrupt their own traditional way of dealing with and looking after present and future employees or they will be in cardiac arrest.
I have a personal as well as a professional interest in this. My blended family has seven children – four girls and three boys. The two oldest girls have finished university and want to change the world. I want them to have a fair chance of being able to do that. The five youngest are all under 12. My wife (the CFO of a fintech start-up) and I want them all to not only have equal opportunities, but also to feel inspired by their work, and feel both valued and valuable.
That means making sure my own company, RoZetta Institute, where I have been since May, instigates change. I’m a male CEO. Our Board is exclusively male. Only 22 per cent of our leadership team is female. And while we proudly say we have created the R&D leaders of the future, only 30 per cent of graduates from our Industrial PhD Program have been female. All that has to change.
The role of higher education
Delivering meaningful value, creating tangible opportunities, developing new and adaptable career-progression pathways for employees are all eminently doable. Education has a vital role to play. That has long been recognised at primary and secondary level, but tertiary and higher education can be better utilised to enhance the transition from studying to working in the corporate sector.
Industrial PhDs of the sort provided by RoZetta Institute bring business and academia together. They have a track record of not just solving industry problems, but also of effectively countering the dissatisfaction expressed by many in Gens Y and Z. Value and possibilities are created, benefitting both putative employee and employer.
Moreover, giving people who have been in the workplace for years access to a research-centred, job-focussed PhD (as opposed to ‘regular’ workplace training) can deliver more career progression opportunities – and deliver value to the business. It can even be used to drive equality initiatives and meet diversity targets.
To survive and thrive, businesses need to stay relevant to their employees as much as to their customers. That’s the modern ‘work’ conundrum. The solution benefits everyone.