Employees less likely to agitate as fears grow over job security, but passive approach unlikely to last

Employees are less likely to protest about perceived injustices at work, but business leaders believe that the proportion of workers 'keeping their heads down' will fall in the near future.

A new report, published by Herbert Smith Freehills, suggests that continued economic anxiety, coupled with rapid digital transformation in many workplaces, is combining to revitalise fears about job displacement. It also reveals that the economic pressures changing workers' priorities have impacted employers' behaviour too, with 81% of business leaders questioned saying that the cost of living crisis, inflation and the threat of recession are driving changes to workforce policies.

"Financial worries appear to have stemmed the flow of employee activism . However, it is entirely possible that the same economic pressures causing employees to think twice before acting today, will be the catalyst sparking higher levels of employee discontent tomorrow. This means employers need to strike a balance between doing what's right for their organisation and their employees, without falling foul of regulations  and meeting the demands of disparate groups within the workforce," says Emma Rohsler, partner and regional head (EMEA) of Herbert Smith Freehills' employment practice.

Called Balancing Acts' the report is the third in a series of three exploring the future of work, with the first released before the global pandemic. The latest report is based on research amongst the C-suite in global organisations, with an annual revenue of at least £250 million. Key findings include:

• scepticism breeds control: as regulators, investors and consumers increase scrutiny on organisations, fewer employers now view activism as a positive force (20% today compared to 37% in 2021). As a result, 97% of employers have 'moderate' or 'high' restrictions on activism, representing a turnaround from 2019 when 53% claimed to have no restrictions in place
• lack of appetite for activism: focusing on the state of the economy over the past 18 months, little over half (59%) expect employee activism to rise – a figure that has fallen from 72% in 2021 and 81% four years previously
• sticks and carrots: employers are also exploring ways to influence employees' working preferences through incentivisation. Nearly half (47%) expect remote working to become a privilege earned through trust and almost as many (43%) have plans to differentiate pay between remote and on-site workers in the next 3 to 5 years.

Nick Wright, partner in Herbert Smith Freehills' London employment practice, adds: "Our research highlights the continuing impact of economic, regulatory and societal fluctuations on expectations and attitudes to work, underlining the challenges employers face when building effective teams and maintaining morale."

Although employee activism is falling in the immediate term, the report goes on to reveal that employers are under increasing pressure from their employees to provide better working environments. Three quarters (75%) say that employees are demanding greater support for their health, whilst a similar proportion (74%) argue that work having a sense of purpose is essential for employee wellbeing. Against this backdrop 62% actively encourage regular breaks from work, 49% give employees the 'right to switch off' and 37% provide access to counselling.

However, it is also clear that generational attitudes make it hard for employers to please everyone. The research shows, for example, that 46% agree that the entrance of Generation Z to the workforce increases the risk of employee activism. At the same time, 53% argue that differences in beliefs and values between generations makes it hard for employers to meet expectations on ESG-related issues.

Rohsler concludes: "Greater awareness of the importance of mental health is proving to be one of the pandemic's lasting legacies but wellbeing initiatives are not without risk, as what may be considered the norm in one country may not be readily available in another. The potential for a well-intentioned act as a trigger for activism cannot therefore go un-noticed."

The report, which provides employers with five steps to employee engagement success, can be viewed here.

Notes to Editors
'Balancing Acts' is based on research conducted via telephone interviews and web-based surveys amongst 375 Board members and senior executives who are part of the strategic leadership teams in organisations employing 1,000+ staff and with more than £250m in annual sales. You can access the 2019 and 2021 reports via these embedded URLs.