Over the past few years, the workplace has been defined by buzzwords. From the “great resignation” to “quiet quitting” and beyond, these terms have shaped the narrative around the employer-employee dynamic in an attempt to better understand the disconnect within organizations. The latest term to grab headlines is “quiet hiring,” which has the potential to put tremendous consequences in front of executives if not addressed.
Let’s take a step back and understand what “quiet hiring” actually means. While there are nuances to how people define it, the general consensus remains the same: to help fill immediate, acute business needs, employees are given more day-to-day responsibilities without the benefits that would come with a traditional promotion, such as recognition for their work, salary increases, and more. Essentially, it’s a way for executives to get the skills and resources they need to increase capacity and meet company goals without adding any new overhead costs.
While “quiet hiring” seems like a corporate win on paper — in an era of mass layoffs, filling business needs at lower costs is a huge benefit for finance leaders — the reality is it can have major unintended consequences. “Quiet hiring” is fundamentally no different than “quiet quitting” or the “great resignation,” in that they are all the product of a lack of communication between managers and employees. When executives are not transparent with their employees about their plans for staffing, company growth, and talent development, there is a clear and present danger that there will be additional friction between the two groups.
What does this mean for financial leaders specifically? Unfortunately, the long-term repercussions could be dire and massively outweigh any short-term reduced-cost benefits. If leaders are not honest with employees about their roles or add more responsibilities onto employees with little notice, they give workers every incentive to look elsewhere for employment where they feel more seen, heard, and importantly, rewarded.
Finding good talent is difficult, and replacing this talent is more expensive and competitive than ever before. In fact, research from Workhuman & Gallup notes the cost of turnover around the globe amounts to over $322 billion. To help ensure businesses aren’t losing talent or money in droves, leaders have to explore alternatives to “quiet hiring.”
Many times, combatting disconnects between employer and employee — including those that have contributed to the “quiet hiring” phenomenon — can start with more cohesive communication between these two groups. In this case, investing in resources that help embed employee recognition into your business will provide the ability to authentically recognize when employees are stepping up to the plate and making greater contributions to the success of the business.
Moreover, this provides an opportunity for executives to identify when workers are feeling excluded, disconnected, and burnt out, and in turn, gives leaders actionable data and insights to help combat these issues before they take hold.
Cultures of recognition do not often take long, or even require a large upfront investment, to manifest their results. At Lincoln Financial Group, for example, executives worked to make sure their recognition programs had buy-in from all levels of the organization early on, which led to high adoption rates and an immediate increase in productivity from employees who were recognized.
Even with companies around the country tightening their purse strings or making reductions to their teams, it is imperative to productivity and profitability that leaders find avenues to invest in talent. These include public celebrations and private demonstrations of appreciation and gratitude, but financial investments at a larger scale can provide a valuable avenue for financial leaders to make their employees more valued.
Ongoing financial incentives given to workers often demonstrate more value than annual reviews and bonuses to employees taking on more responsibility or exceeding expectations. Consistent employee recognition, in short, will provide more opportunities to make employees feel seen and valued moving forward.
Building morale is part of a larger need to ensure employee wellbeing — recent research indicates that the cost of voluntary turnover can run employers up to 20% of their annual payroll budget, and has the potential to lead up to millions in losses per every 10,000 employees.
Recognition, if evangelized early and successfully, can provide huge financial benefits for businesses as well as both qualitative and quantitative benefits to employees who have been given more responsibility as a result of staffing or budgetary shortages. The results are immensely positive as effective recognition strategies help avoid disruption, increase employee loyalty and engagement, and motivate top performers to continue doing great work.
Ongoing financial incentives given to workers often demonstrate more value than annual reviews and bonuses to employees taking on more responsibility or exceeding expectations.
To make sure recognition is properly rolled out, it’s important to take a look at your yearly budget and see where you can rework and reprioritize investments to focus on these employee incentives. By taking even just 1% of the company budget and allocating it towards recognition, financial executives can make sure that they are properly compensating and engaging their workers and save the aforementioned 20% on the payroll budget annually.
“Quiet hiring” might seem like an ideal working strategy on paper. Ultimately, however, I see it as a short-sighted Band-Aid — creating massive amounts of long-term risk for executives who choose to employ this tactic in the face of tighter budgets and hiring freezes. When examining the causes and consequences of this new workplace trend further, the unmistakable truth is that businesses actually need to dial up their investments in talent in order to recognize employees who are going the extra mile to help businesses meet key needs, milestones, and financial goals.
By creating cultures of recognition, showing appreciation through financial gestures, and doubling down on investments in their people, financial leaders can combat the negative effects of “quiet hiring” and reduce friction between employees and employers before it arises and reduce negative impacts on the financial bottom line.
Employee Appreciation Day — taking place on March 3 — is less than a month away and provides a perfect opportunity to show appreciation to employees, especially in the face of economic and labor market uncertainty. In the face of the “quiet hiring” phenomenon, it’s crucial to acknowledge that employees are stepping up and taking on more responsibility when times are tough.
Celebrate this day in a way that feels authentic to culture and values, but also consider providing financial incentives such as spot bonuses or salary increases across the company. It’s a great day to remind employees the work they’re putting in is being seen and appreciated.
Chris O’Sullivan is senior vice president of finance and planning at Workhuman.