We Don’t Have a Labor Shortage. We Have a Respect Shortage.

The pandemic has wreaked havoc on businesses across the globe. As companies attempt to reopen or rebuild, many are struggling to find workers.

Since March 2020, employees have dealt with shutdowns and layoffs and — for those who retained their jobs — remote work. Driven partly by the fear of being infected by vicious variants and the availability of extended unemployment benefits, job seekers haven’t jumped at the first job offered. Instead, many are holding out for better.

But there’s another factor contributing to the so-called “labor shortage.”

The Respect Shortage

After reflecting, many employees are hesitant to return to the old normal of disrespectful work cultures. Most organizations are not civil, or even pleasant, environments. Gallup found that employee engagement globally dropped from 22 percent in 2019 to 20 percent in 2020. That means 80 percent of employees are not fully engaged.

No wonder hiring is a struggle. Imagine what would happen if this honest job post hit the internet:

Help wanted. Work with us! We offer substandard pay, zero recognition, long hours, autocratic bosses, frustrating systems, and a toxic culture. But, hey, you can pay your bills. Start TODAY!

Millennials and Gen. Z-ers are less tolerant of the typical command-and-control workplace, according to Deloitte’s Global 2021 Millennial and Gen. Z Survey. As Deloitte notes, “[Millennials and Gen. Z-ers are] channeling their energies into holding themselves and others accountable. They’re the people most likely to call out racism and sexism and to shun companies and employers whose actions conflict with their personal values.”

In addition, Deloitte reports that in the past two years, 44 percent of millennials and 49 percent of Gen. Z-ers have made choices about the type of work they’re willing to do or organizations they’re willing to work for based on personal ethics.

Employers cannot afford to ignore these younger generations. After all, they will account for 66 percent of the workforce by 2030. These players aren’t interested in plugging into an old-school, autocratic, demeaning work environment. To attract and retain these talented and engaged workers, you must create a culture where respect is as important as results.

Building a Culture That Equally Values Respect and Results

The reality is that employees of all generations desire and deserve workplaces where they’re respected for their ideas, efforts, and contributions every day.

The problem is the leaders of most companies don’t see the creation of a respectful, validating workplace as part of their role. Instead, those leaders have one goal: a productive, profitable workplace. So, unfortunately, most senior leaders ignore the degree to which their work cultures demean, discount, and dismiss team members and their contributions.

To those leaders who focus exclusively on results, respect isn’t important. Or at least it’s not a high enough priority.

But respect matters — not only to team members but also to your bottom line. In fact, in my discussions with job seekers of all kinds, I’ve found we don’t have a labor shortage. We have a respect shortage.

Culture Change: The Numbers Don’t Lie

Companies and leaders that create and sustain purposeful, positive, productive work environments — where good comes first — enjoy significant gains in the big three desirable data points, according to research I conducted with Mark S. Babbitt:

• Employee engagement grows by 40 percent
• Customer service increases by 40 percent
• Results (including profits) grow by 35 percent

We’ve seen these positive outcomes in large and small organizations and industries as varied as retail, design, construction, financial services, manufacturing, distribution, and sales. The common thread in these organizations is that they’re led by people who understand the power of an uncompromising work culture. They and their fellow leaders treat everyone with respect while wowing customers. In return, their employees invest time, energy, and heart in their work and in doing their part to sustain the respectful work culture. Soon, contagious pockets of excellence form. This means every business metric — including engagement, service, productivity, and profits — improves.

Now and in the future, senior leaders must build and sustain purposeful, positive, productive work cultures where good comes first. Senior leaders must develop a work environment where everyone treats employees, contractors, vendors, leaders, and all stakeholders (not just shareholders) with respect every day.

How to Intentionally Change a Company Culture

A good comes first company culture isn’t just possible — it’s probable. Here’s how:

Formalize an Organizational Constitution 

First, define your desired culture through an organizational constitution. An organizational constitution specifies a company’s servant purpose, values, behaviors, strategies, and goals. Within the organizational constitution, a company defines its values in observable, tangible, measurable terms. Once socialized and adopted, the constitution allows everyone to understand the behaviors required of them.

Operationally Align With the Constitution

Second, align every plan, decision, action, and hire to the organizational constitution, which emphatically declares the desired culture. Perhaps most important: Leaders must hold themselves and everyone else accountable for modeling valued behaviors and treating everyone with respect in every interaction.

Pro tip: Don’t assume people are modeling the values. Instead, measure how well leaders demonstrate defined valued behaviors through a twice-a-year custom values survey. This allows team members to rate their bosses and senior leaders on the degree to which those leaders model desired valued behaviors in daily interactions. In the end, survey results show where each leader does and doesn’t model desired behaviors.

Continuously Refine Your Uncompromising Company Culture

Third, refine your desired culture by ensuring alignment to both respect and results across your organization. For example, if a leader or team member doesn’t deliver promised results while treating others with respect, coach them to understand that the company culture no longer tolerates destructive behavior.

If leaders and players demonstrate alignment to desired valued behaviors with their actions, celebrate them! If they don’t, serve as a mentor by giving them every opportunity to align to the new culture. If those efforts fail (and despite the best of intentions, some people will choose not to align), coach them out of the organization. By lovingly setting free the players unwilling to embrace change, leaders demonstrate the importance of respect and results in their company to all other players. Through their actions — and by refusing to tolerate undesirable behaviors — leaders intentionally create an uncompromising company culture.

Don’t accept the “labor shortage” as fact. Stop watching good people walk out the door. Instead, create a culture where your team members and leaders can expect respect while doing their best to drive results.

Chris Edmonds is founder of The Purposeful Culture Group. He is the author ofThe Culture Engine and coauthor of the upcomingGood Comes First: How Today’s Leaders Create an Uncompromising Company Culture That Doesn’t Suck .

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