“When my friends were laid off two years ago, I thought it might also occur to me,” remarked Lito, as we talked about his redundancy. “I was the sole earner in our family, and my two kids were still young. Given my responsibilities, I looked for a side hustle and discovered VA [virtual assisting] work. I became so good at it that now, two hours of VA work equate to eight hours of income in my regular job. So this layoff is a welcome change.”
Lito cushioned himself against a potential job loss and was ready when it happened. As a coach to individuals who lost their employment from layoffs, I found people who prepared for possible organizational restructuring in the minority.
After three years of global dismissals, career cushioning has become a buzzword today. According to The Society for Human Resource Management, career cushioning is looking for a new job while employed to soften the financial impact of a job change. It’s having a plan B in case of layoffs or unfavorable situations at work.
Organizations experience a viral affliction from several factors that weaken employee confidence in their employers. As firms wrestle to find new workers to compensate for those they lost from “The Great Resignation,” this situation intensified the “War on Talent.”
Other trending HR issues include workforce quiet quitting and concerns about company stability due to growing global complexity from political, economic, social,and technological factors brought by the war on Ukraine, recession fears, changing consumer preferences, climate change, and high-tech advances have exacerbated the need to practice career cushioning. Unfortunately, career cushioning is just a symptom of job insecurity.
According to sociologists Grunberg and colleagues, job insecurity is an employee’s perceived threat of involuntary job loss in the near future. This insecurity may stem from external factors within the organization or employees’ positions and beliefs on whether they can control their situation. Last year, the research by Salvador and colleagues published in Social Sciences highlighted that job insecurity results in lower health and well-being, commitment, performance, and organizational citizenship behaviors. It also increases resistance to change and the intention to resign.
Now, companies scramble to fulfill their employee value proposition frameworks. However, organizations continue to suffer from fever caused by environmental factors, and the heavy emphasis on compensation and benefits failed to cure the illness. While it is understandable because these aspects are more concrete than the abstract factors of culture, career, and work environment, this wrong focus may not provide a long-term solution. While an increase in income is significant, the other aspects that enable employee engagement are also critical.
What can organizations do to recover their health? Unfortunately, no pill can quickly cure or rapidly strengthen organizations against job insecurity. But some exercises can boost firms through consistent practice.
First, I recommend practicing humanistic management. Humanistic Management International defines it as “a perspective on management in which people matter.” It treats employees as humans rather than as factors of production. It’s not only about organizational financial results but showing concern for workers’ flourishing and well-being.
Given its thrust on the dignity of employees, it is no surprise that humanistic management encourages positive work culture. It highlights the need for humane working conditions, work-life balance, diversity, equity, inclusion, employee empowerment in decision-making, and realistic performance requirements.
While several companies still prefer automatons, factors of production that mindlessly obey programming keyed in strategic and tactical plans, others have empowered their employees to speak up. Virgin Enterprises, the company managed by Richard Branson, listened to a front line’s recommendations, revamped their train menu, and it became a hit with passengers. Technology companies like Cisco and Factset created idea-generating initiatives where personnel can submit ideas for evaluation and implementation.
Second, update employees about the social contract. Employees need to own their development. It’s been a long time coming that employees realize that companies can no longer uphold their end of the bargain in the social contract: employees work hard, and employers guarantee the stability of tenure. External factors rendered this belief obsolete. While I like that employees realized this, I do not like the motivation behind this shift: job insecurity. Instead of having a source of a positive force for people to grow, the negativity caused by job insecurity worsens individuals’ well-being due to stress and anxiety.
Third, while companies started to upskill and reskill employees in preparation for further change and re-engagement, decision-makers need to address the elephant in the room: workers have an option outside the company. Instead of hiding that fact, which employees know anyway, directly address why staying in your company is the better choice.
However, it’s not only a matter of rhetoric but having authentic, humanistic practices that make you superior to the company next door. Internal employees constantly compare their organization with similar companies. At the same time, outsiders have more visibility of the inner workings of a company using job search and review websites like Indeed, Glassdoor, and Jobstreet.
Career cushioning is a complex challenge for companies. However, this situation also presented an opportunity to elevate our overall approach to management as organizations are hard-pressed to use employee-centric means to attract and retain talents while generating the company’s bottom line.
The name of the person mentioned in the article has been changed for anonymity.
Hannibal George A. Marchan is an executive coach and workshop facilitator. He is a Ph.D. in Business student at the Ramon V. del Rosario College of Business, De La Salle University, where he also teaches. He can be reached at firstname.lastname@example.org.
The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty, and its administrators.