CHRO Survey: Grappling with changing employee expectations

Employees everywhere are reevaluating what matters most to them, and often it's not just a paycheck. Despite ongoing turmoil and uncertainty in the tech employment market, workers at high-growth companies are asking their employers to invest in their professional growth and to offer clear paths for career advancement. CHROs are taking note. To meet the evolving needs of their workforces, many are proactively shifting priorities, and adapting policies, practices, and organizational culture. Here’s a look at the changing employee value proposition (EVP) and other issues at the top of the agendas for People leaders in 2024. (You can explore the full survey results, and filter by region, sector, and stage via Sōzō Pulse.)

In the wake of unprecedented workplace upheaval spurred by the pandemic, it is not compensation expectations that are driving changes in the EVP, according to our 2024 CHRO survey respondents, but upskilling and culture. Three-fourths of CHROs surveyed say their workers are giving more importance to opportunities to develop and grow, and more than half (54%) say workers are more focused on finding meaning and purpose at work. CHROs say that the relative importance of community and connection (49%) in the workplace had also edged out compensation and benefits (48%) as an area of focus for workers. And not a single CHRO says their workers are giving less importance to opportunities to develop and grow. 

“It makes complete sense that CHROs are having to reevaluate what makes for a happy, effective workplace,” says Jennifer Dulski, who is CEO and founder of Rising Team and teaches management at Stanford’s Graduate School of Business. “So much has changed — and is still changing.” Along with continued uncertainty about the future of flexible work and the down economy, two other key factors are in play: Gen Z has entered the workforce, and so has AI, putting pressure on everyone. “We’re in a space where people are more burned out and overwhelmed than ever before,” says Dulski, whose company builds tools to help managers build effective, high-functioning teams. “People want stability, because nothing has been stable. And they want connection, because so many people are not together in the office.”  

For Colin Slade, VP of People at Cloudbeds, adapting to employee’s changing expectations starts with cultivating a culture of psychological safety, providing employees more opportunities for growth, and offering clear communication. To nurture an environment of openness, Cloudbeds, which is based in San Diego and has around 750 employees in multiple locations across the globe, has developed an upward feedback process that encourages employees to provide comments and suggestions about their supervisors, managers, and higher-level executives. The feedback is both anonymized and summarized. “People need to trust that if they bring up a concern, they won’t be retaliated against or targeted in any way,” Slade says. With 98% of employees participating in the most recent feedback round, the process is working, he adds. 

Slade, like many of the CHROs surveyed, says that employee morale is top of mind for him this year. He’s part of the nearly one-third (31%) of respondents who told us morale is their number one challenge this year – over operating in an uncertain environment (26%), organizational design (24%), retention (11%), and recruiting (2%). That’s a marked shift from last year, when CHROs approached the start of 2023 with overwhelming concern about operating in an uncertain environment (43%).

Part of nurturing employee morale for Slade is organizational and leadership clarity. He’s a firm believer in top down communication about how the company is faring, as well as consistent messaging that happens in multiple formats, such as a video, email, instant messaging, or a town hall. “There’s lots of studies that show the importance of having a water cooler effect, even without an office,” says Slade, whose company is 100% remote. “That connection also creates safety, because you feel that you have someone you can go to if anything were to happen.” 

That all aligns with what Dulski has seen over decades of building leadership teams and examining workplace dynamics. She’s found that what matters most to employees is purpose, people, and path: “Employees want to know that what they’re working on makes a difference, and want line of sight into how they contribute,” she says. “They want to work with people they like and trust. And they want to see a growth path for themselves.” 

Ultimately, Dulski says, “people want connection, and to feel understood by their colleagues.” And it’s managers, she believes, who are the key to making both happen.  

Not surprisingly, for many CHROs, cultivating a workplace environment of support and mentorship has become paramount. Nearly half (47%) of the CHROs surveyed say that manager effectiveness is a top area of focus (up from 39% in 2023), along with change management (26%) and culture (15%). 

Barbara Matthews, Chief People Officer at Remote, encourages managers to cultivate what she calls “a culture of no surprises.” That means giving transparent, direct feedback, and setting expectations and goals so that “employees know exactly what’s needed of them and how they’re meant to show up,” she says. And because everyone learns in a different way, Matthews has introduced asynchronous training as well as facilitated workshops for managers. “So many things we hear from employees are usually rooted in lack of feedback, lack of clarity, and lack of communication,” she says.

Cloudbeds’ Slade is among those whose biggest goal for the year is to uplevel management. 

“We know the manager creates the environment,” Slade says. “We want to make sure we have a consistent manager culture, that it’s clear what it means to be a Cloudbeds’ manager.” 

Dulski says prioritizing management training makes perfect sense. “People leave managers, not jobs,” she says. And the way to make employees happy and satisfied is to give their managers the tools to better understand them as individuals, she believes. “Everyone is unique,” she says. “But the fatal flaw that managers and leaders make most is assuming that everyone’s just like them. That’s just not the case.”  

Cloudbeds has a manager training program that includes coaching scenarios and discussion groups on how to handle difficult conversations. The program has been so successful that Slade is now building its next iteration, which will offer more personalized training according to each manager’s strengths and growth opportunities. “You may be really good at social awareness and conflict, whereas someone else might be great at presenting to the board but totally unaware of what to do with conflict,” Slade says. “We’re going to pair people together to help each other and practice, because practice is a critical component of growth.” 

It’s also important for Slade that Cloudbeds employees learn and grow in their career. “However long you end up at our organization,” he says, “we want to make sure that it’s the best time of your career from a growth standpoint.” As a result of the instituted career exploration and training programs, “we have hundreds of people who have moved between departments. Some have even gone into completely different fields because they found that’s where their passion lies.” 

At the end of the day, Slade says, “we’re big on encouraging people to move, to find where they can be the happiest and where they can do their best work.” 

Managing changing employee expectations is putting a strain on CHROs. Nearly half (44%) say it has become more difficult to manage their workforce than a year ago, while only 15% say it has become easier. 

These responses align with what Dulski is seeing. Many CHROs, she says, “are overwhelmed with ever-changing work arrangements, managing multiple generations, and the pressure of incorporating AI into their work.” She offers two prescriptions that should help both stressed-out HR leaders and employees. “Learn how to use AI to help you streamline tasks so that you can spend time on the things that are uniquely human,” she says. “And hold more face-to-face meetings, whether virtual or in-person, where you are highly intentional about building connections and listening to each other with compassion.”