For years now, we have all acknowledged that change is the only constant in the world, including in the realm of business. In these turbulent times, CEOs, in particular, find themselves in unfamiliar territory, trying to navigate the challenges of balancing cost-effective workforce changes due to economic uncertainty, addressing a labor shortage, and dealing with employees who hold more negotiating power. However, the solution to this dilemma goes beyond simply finding or replacing workers while managing costs. It involves cultivating a team of individuals who share common values and are driven toward a shared objective, while also considering the emotional journey of an increasingly discerning workforce. This approach should be incorporated into a strategy that truly transforms an organization. In this context, leadership plays a crucial role.

In the past, leaders have primarily prioritized the practical and measurable aspects of transforming the workforce. This includes considerations such as compensation and benefits, implementing hybrid work models, enhancing technological tools for work, and redefining physical work environments. These aspects continue to hold significance. According to the EY 2022 Work Reimagined survey, 79% of employees expressed a strong emphasis on total pay and other tangible benefits. Similarly, 83% of employers agreed that the pandemic has accelerated the necessity for significant modifications to rewards policies that encompass compensation, employee well-being, flexible benefits, time-off, and other related factors.

However, these insights alone do not provide a comprehensive understanding of the challenge we face. Findings from a research partnership between EY and the University of Oxford’s Saïd Business School indicate that leaders must also give equal importance to the emotional aspect of the workforce’s journey during a transformation. By taking into account the complete human experience, including both rational and emotional aspects, CEOs can effectively support their employees in managing stress and uncertainty associated with change. The research reveals that in high-performing transformations, over half (52%) of the workers acknowledged that their leaders understood the needs of the workforce, compared to only 31% in low-performing transformations.

To effectively guide their employees through constant change, CEOs can take the following actions:

1. Demonstrate genuine care: CEOs should attentively listen and show empathy when negative emotions arise. It is crucial for these actions to be sincere, as a significant portion of workers perceive corporate attempts at empathy as inauthentic.
2. Collaborate on a compelling purpose for change: Beyond monetary compensation, employees desire to be part of something greater. Leaders must transparently communicate the reasons behind the change and engage in two-way dialogue, fostering a sense of shared belief. This necessitates moving away from a hierarchical, command-and-control culture and embracing collaboration and empowerment.
3. Seek opinions: Even when trust and engagement are established, there will be individuals resistant to change. Instead of dismissing their perspectives, leaders should respectfully learn from their resistance. Proactively seeking out those who disagree with the vision and understanding their concerns is more beneficial than waiting for them to approach you.
4. Develop skills and mindsets concurrently: During transformations, roles evolve, requiring different skill sets. CEOs must identify skill gaps and provide reskilling or upskilling programs to ensure employees feel confident in their roles. Additionally, focusing on developing growth mindsets can foster the necessary skills, adaptability, and emotional resilience for successful transformation.
5. Foster a culture of collaboration and co-creation: The COVID-19 pandemic forced organizations to swiftly adapt to new ways of working. CEOs took risks, innovated, and co-created methods of collaboration while consistently communicating and listening to their workforce. This human-centered transformation relies on cultivating an environment of connectivity, collaboration, and creativity to support the vision.

In summary, CEOs must possess a comprehensive understanding of the entire landscape to assess the performance of their organization during ongoing change. This includes monitoring the emotions of their workforce, ensuring their comprehension of the reasons behind the change, facilitating the acquisition of necessary skills, and promoting an environment for collaborative creation of the future of the organization. When making decisions regarding digital, organizational, or strategic investments, CEOs must consider the intangible aspirations of employees who are influencing labour market dynamics. By prioritizing the human element in every strategic choice, CEOs can cultivate a resilient team while effectively managing the mounting pressures of cost reduction.

EY Cyprus Contact

Anna-Maria Karamallaki

Manager –People Advisory Services

EY Cyprus Advisory Services Limited

[email protected]