Today, a rising number of employees worry about their job security. Many sectors, such as technology and retail, have already seen mass lay-offs over the last year, while others are subject to hiring freezes. Longer term the rise of AI threatens to disrupt and automate many roles, potentially replacing humans or requiring them to learn new skills to remain in the workforce.
There’s a proven link between job insecurity and lower engagement and poorer work performance. So how can companies and managers help increase job security for employees and ensure they get the best from their people?
What does job security mean?
Having job security is all about being confident that you and your role are safe from being fired or laid off. Essentially, it is about reassurance that you will be able to work at your current employer, now and in the future. Many people actively look for jobs with job security to balance work and home lives.
Job security vs job stability
Job security is subtly different to job stability. Having job stability means that your role remains consistent and broadly unchanging. You go into the same office every day, interact with the same people, and do the same things, with the reassurance that you’ll receive the same pay check at the end of the month. You might well stay at the same company for the whole of your working life.
- In the past, generations such as Baby Boomers prized job stability, making it one of the key things that organizations offered to attract and retain their skills. However, multiple factors have dramatically reduced job stability across every industry:
- The rise of technology means that many office-based jobs, even in previously secure industries such as government, have been automated or require new skills. And that’s before we even start on the future potential impact of AI. For example, Goldman Sachs estimates that AI could replace 300 million jobs in the US and Europe.
- More and more jobs operate in the gig economy, where staff are paid on a piecework basis, rather than a fixed salary. This does provide them with flexibility, but also adds to job insecurity.
- Competition is increasing, with many industries now truly global. Companies may move whole departments or functions to different countries to increase efficiency, shutting offices almost overnight.
- Pandemic homeworking and now hybrid working adds to instability. Even if people are doing the same job, they or their colleagues are unlikely to be in the office five days a week, disrupting routines and potentially leading to issues with isolation and impacting company culture.
What is clear today – and especially now in these uncertain times: Job stability has taken a back seat for many. Instead, most employees want job security. The younger generation is also increasingly striving for job security.
What impacts job security?
How secure and comfortable someone feels in their job is related to multiple factors:
- Their confidence that their employer is performing well financially and that the industry they are operating in is seeing growth. Essentially, they want to be sure that the organization will still be going for the long term and won’t shut down or be taken over by a rival.
- Their confidence that their role itself will still be there and will be broadly unchanged. The majority of people worry about change, particularly if it means having to learn new skills or follow new processes, such as when new IT systems are introduced.
- Their confidence that their co-workers and managers will still be in place. Of course, there’s bound to be some turnover in every company, but lots of people leaving can impact feelings of security.
- Their confidence in the wider economy. We all saw the impacts of the pandemic on job security. However, that’s now been replaced by worries about rising inflation, potential recession, and corporate cost-cutting.
Different generations see job security in different ways. Older generations, such as Baby Boomers and Generation X, value security far more than their younger counterparts. For example, Gen Y are known for changing jobs more frequently, preferring new experiences to stability within their working lives. For Generation Z security is an important aspect when looking for a job. They come to the job market uncertain and worried, and in addition to freedom of development, they also want job security.
Why job security matters
There’s a direct link between feeling secure in your job and giving your best. According to Gallup, engagement drops by 37% amongst those who worry about their current and future job security.
At the moment, job security is dropping across the board – even though unemployment in the US remains low. Nearly half (49%) of employees interviewed for recent research were concerned about job security. It isn’t just low earners who are feeling insecure – 66% of executives were worried about job security too.
Let’s face it: Does job insecurity increase performance?
Many old-school managers believed that a certain level of job insecurity had a motivating effect on staff. Concerns about potentially losing their job made them work harder to try and impress their boss and retain their role. For example, General Electric used a 20-70-10 system, ranked by managers. The top 20% of employees were rewarded and the bottom 10% fired.
However, analysis shows that any correlation between insecurity and higher productivity are limited. Researchers at the University of Auckland and the University of Texas at San Antonio found that job insecurity did have some positive impact on productivity, but that it also has a negative effect on creativity, innovation and helping others. As organizations increasingly differentiate themselves through agility and innovation, using job security as a threat therefore becomes counter-productive.
The benefits of job security
Rather than looking at job insecurity as a way of scaring employees into working harder, it is vital to focus on the benefits of good job security for both staff and organizations.
The benefits of job security for individuals
There are three main benefits of job security for employees:
- Lower stress and anxiety. Constantly feeling worried that your job might disappear harms mental wellbeing and physical health. It damages relationships with colleagues and family members and can lead to burnout or breakdown.
- Higher engagement. There’s a direct correlation between feeling secure and being engaged. And engaged employees are more motivated, innovative, and productive.
- Better quality work. Staff who feel secure go the extra mile and deliver a better service to customers, acting as ambassadors for an organizations.
The benefits of job security for organizations
There’s a direct connection between organizations with high levels of job security and success:
- Lower absence rates – stress caused by insecurity impacts both individuals and their employer. If staff are unable to come into work, it adds to the load on other team members and undermines the experience provided to customers.
- Higher retention – disengaged employees worrying about their job are more likely to leave before they are made redundant. Replacing them adds to costs and workload.
- Better culture – if everyone feels insecure about their job, they are less likely to feel part of the company or team. They might actively focus just on their job, competing against their colleagues. This impacts culture and the working environment.
- More effective workers – if employees are constantly worried about losing their job, they are spending less time actually doing their work. This reduces overall productivity and hurts the bottom line.
- Improved reputation and talent attraction – today, it is easy to find out exactly what it is like to work at particular an organizations through review sites such as Glassdoor. If your company develops a reputation as not providing job security, potential candidates are likely to find out and choose to work for competitors instead.
How can managers increase employee job security?
Particularly at times of turbulence, it can be difficult for managers to increase feelings of job security amongst their people. After all, they can be equally concerned that they will lose their jobs or be impacted by the rising cost of living and static wages. However, there are four areas they can focus on to reassure and motivate their reports who are looking for job security:
1. Be an open, transformational leader
Transformational leaders motivate their people and show empathy for their concerns. They are transparent and share information, communicating change and balancing pragmatism and optimism. All of this means that fears around job security are put to the back of employee minds as they look forward to coming to work and see the positive opportunities that change brings. They are happy to confide their worries to their manager, without feeling it will negatively impact their career.
2. Listen and act on feedback
Concerns around job security require managers to reassure staff and simply answer their questions. That makes listening a key skill – whether face-to-face in meetings/one-to-ones, or by collecting feedback via surveys. Understanding what is worrying staff, and then providing answers and corrective actions reduces concerns and builds a stronger, more secure workplace.
3. Encourage learning and development
Many employees are concerned that they don’t have the right skills to succeed in the changing world of work. This impacts their self-esteem and leads to a lack of security around their job. Managers therefore need to encourage staff to embrace relevant learning and development opportunities, whether it is learning new skills that directly help them in their current job or wider training that helps them progress and take on new roles
4. Focus on wellbeing
Particularly amongst younger generations, employees want their mental as well as physical health to be supported. A lack of job security will directly impact wellbeing and can quickly lead to poor health, lower engagement, higher rates of absence, and greater employee turnover. By putting in place a full range of wellbeing resources organizations support staff and show that they care about them as individuals. These initiatives should be led from the top, with senior managers taking part in sessions to remove any stigma around wellbeing and demonstrating that it doesn’t impact their career.
How Tivian helps to provide job securuity
Listen to employees and address concerns early on
In today’s experience economy, it is vital that organizations understand – and meet – the needs of their employees, including around job security. Understanding starts with listening, collecting feedback across the employee lifecycle and then acting on the insights that surveys deliver.
Tivian provides the all-in-one platform to discover what your people want, analyze their feedback, and use these insights to take action and clearly communicate to deliver the reassurance and motivation that transforms the employee experience.
Develop transformational leaders
Managers not only need to know the needs of their employees, they also need to be able to lead transformationally and nurture each member of their team. Leadership 360 supports all leaders in their personal development. It closes gaps by identifying necessary areas for improvement.
Leadership 360 makes it easy to develop managers into transformational leaders who give employees confidence.