When a Paycheck Is Not Enough

Pay, promotion, and benefits have been the traditional carrots for hiring and retaining employees. But what happens when they are not enough? During the Great Resignation, companies have watched well-paid, decorated employees walk out the door. They have watched front-line workers who had just received raises walk. Why? The emotional needs of employees are as critical as their functional needs, says Gabi Novacek, a BCG Henderson Institute fellow researching diversity, equity, and inclusion. Feeling safe, challenged, and valued at work can be even more important than a paycheck. Novacek, an archeologist by training, also discusses how a family medical emergency has shaped her thinking about what really matters at work.

GEORGIE FROST: How do you feel when you wake up on a Monday morning? Invigorated at the start of a brand new working week or full of dread? Here we go again. When it comes to employees, most leaders focus on their thoughts and behaviors. But when it comes to creating the right culture, feelings and emotions are just as important. As our work and home lives become ever more entwined, and more of us reassess our work life balance, is all this about to change? I'm Georgie Frost, and this is The So What from BCG.

GABI NOVACEK: We don't quit jobs always because somebody's going to pay us better or there's a better benefits package. Absolutely, that does shape decisions, but a lot of the times we quit a job because of how it made us feel.

GEORGIE FROST: Today I'm talking to Gabi Novacek, a core member of Boston Consulting Group's, Consumer and People & Organization practices, and a fellow at the BCG Henderson Institute working to advance diversity, equity, and inclusion in the workplace.

GABI NOVACEK: I personally have been on a little bit of a roller coaster and it actually started before the pandemic began. If I rewind to March of 2019, my wife was diagnosed with stage four colorectal cancer. And I mean, it's a traumatizing piece news to receive. And at the time when I had to figure out like, how was I going to balance dealing with this incredible kind of crisis together with a job that I love and I am passionate about, but it is incredibly all-absorbing of your time and energy? I had to really rethink how I was going to make it all work.

And I started to reconfigure my work life and I started to drop leadership positions and step away from things, but it was really the pandemic then that was the next big inflection point for me. And it was all of a sudden finding myself- I was at home and I was on Zoom or I was at my computer and I was doing work, but there was so much going on behind the door in that personal life, and I found myself really wanting to find ways to create a form of balance and a new set of tradeoffs that I had never imagined I would ever want to make.

And I found myself a really reprioritizing where I spent my time at work on the things that challenged me, that delivered impact, that that allowed me to continue to learn, to influence others. And if it didn't do that, I dropped it away. And now, we're 18, 20 months into the pandemic. I'm continuing to work part-time, which I never thought I would have done, but I it's really become kind of my new normal as I look to balance things in very different ways.

GEORGIE FROST: Your role in the work you do with diversity, equity, and inclusion in the workplace to me feels very much driven by feelings of emotion. Had you ever looked at it in the same way that you do now? Having that experience, has it impacted on how you look at your role and how you approach trying to find solutions?

GABI NOVACEK: I can't even begin to describe how much it has. I mean, I think there's one- there's an inner level of that, which is, I'm not a mom. You know, I had never taken maternity leave. I had never had to figure out how to balance work and kids. And I think there was one slice of this which was just taking on the role of caretaker, completely reshaped my understanding of what it is that folks are wrestling with every day.

But I think at a more profound level, it really prompted me to step back and say, we spend so much of our energy on DEI work, doing- it's profoundly critical, the efforts to say, how do we address issues of pay equity? How do we address issues of equity and promotions and hiring and the like? But we really don't get to the heart of what motivates us to come to work every day.

And as we think about a way to drive that next big step change of diversity, equity, inclusion, there's a big missing link, which is every one of us is going to make a choice. We're going to make a choice to get up, to feel happy, to feel motivated, to want to stay in the job. Like how do we actually tap into that? You know, and as somebody who's gone through crisis and has had to make that choice, what is it about the job that says, "I still want to keep doing this. I still want to get up, I still want to engage. I still want to put my energy against this." It's such an important part of the equation.

GEORGIE FROST: I want to talk about the way that that we think about work. And I'm wondering if we've got it all wrong in a way. You only have to look at children to see that the best way that they learn and develop is through stories, through narratives, through play, and we still love play. And you just have to look at some of the astonishing figures coming out of how many hours we played Fortnite, not me included, during the pandemic, many, many hours. And yet of us get this sense of enjoyment, this sense of achievement through playing something like Tetris. You can tell how old I am. Satisfying though nonetheless pointless, than we do from our work. Can businesses, can leaders incorporate that mentality, that play more into our work so that we can get more of a sense of purpose, more of a sense of motivation on Monday morning?

GABI NOVACEK: I think we can, and I think it can happen in two ways. So one is when we research the underlying drivers of what really motivates people in the workplace every day, I think we often confuse this idea of advancement with achievement. And there is this real sense among a very large proportion of the workforce that I come to my workplace every day and I am motivated, I am happy, my brain lights up because there's something that I'm doing that is challenging. And I'm interacting with others in order to do things that solve a problem or get to something different, or allow us to tackle something that's complicated. And it doesn't matter what job role you're in.

And I think it feeds into that idea of play a little bit, you know, which is this notion that we're not always motivated by the next big job title or the award. It's actually simply that human behavioral kind of tendency to want to come together into groups and collectively do something that we couldn't do on our own. Like that's actually something that's wired into the back of our brains that lights up and is very exciting to us.

And I think the second piece that we've really seen throughout the pandemic is as we have been pulled apart from one another physically, it's been so fascinating to me, as we think about coming back from the pandemic and what is the time that we spend together? What is it best used for? It is when we need to connect, to affiliate, to play, to find joy, to creatively solve problems together. That's actually when we are best when we work together. We don't quit jobs always because somebody's going to pay us better, or there's a better benefits package. Absolutely, that does shape decisions. But a lot of the times we quit a job because of how it made us feel.

GEORGIE FROST: So how then do businesses respond to that change?

GABI NOVACEK: So I think we, just at a fundamental level, we need to get away from talking about emotions as something shameful. You know, like I can think about times when I have broken into tears in the workplace and sitting in my office and trying not to be seen through the glass wall that everybody can see. You know, we've all had those experiences. And I think we've all been trained and coached to feel like that is something shameful and that's something to hide. That's not really what I'm talking about when I talk about emotions.

When I talk about emotions, what I mean is that we are all prompted to make decisions every day based upon a set of things that are going on inside our brain that transcend the functional. So my mom wouldn't let me eat sugared breakfast cereal as a kid, and now when I'm walking the aisles of the supermarket, I pick the one that has the most colors and the most sugar imaginable, not because it makes any kind of rational nutritional or economic sense to pick that box, but because it triggers that emotion that 40 years later is saying, "You know what? I'm going to stick it to mom and get that cereal, right?"

We are fundamentally driven by things that are going inside our brain that are very emotional in nature, and we need to start thinking about how we engage with employees with that same recognition. You know, I am going to feel motivated and inspired and connected into my job because it makes me feel secure or maybe it's because it makes me feel challenged or maybe it's because I feel like somebody has my back. Like, those things are actually prompting me to make real decisions about how I'm going to manage my career. And if we think about the context of the great resignation that's happening around us, I mean, it is astonishing to see the sea change that is happening in our labor force, and it is touching every segment of workers.

I mean, this is everything from frontline retail to the executive suite. It's like a collective post-traumatic growth experience that we're all going through at the same time and actually really evaluating the calculus by which we make these decisions, and some of those factors are starting to play a much bigger role than they ever had in the past. And so businesses are not recognizing that the people who I depend upon to be successful, I mean, we're at the point where restaurants are not opening because there's nobody to serve the table. I can't possibly have a successful business if I'm not thinking about my talent in a way that includes a conversation about what is it that they're looking for when they come here beyond just the paycheck?

GEORGIE FROST: Is it as simple as saying this great resignation is due to the fact that we've all had a pandemic, we've all sat down, we've all been at home and all realized that actually there's more important things in life than earning money and working, or is it something else at play?

GABI NOVACEK: Think it's multifaceted. I mean, I think there is a very fundamental set of issues that are going on in that we have had massive segments of our labor force who have not had wages that have kept pace with economic growth and inflation, who have not had security when they come to work.

When we talk to certain segments of the workforce that are more hourly in nature, or perhaps were more in the frontline roles during the pandemic they talk a lot about this idea of security and that of course gets manifested in things like I have an employer that doesn't respect my health, welfare, and safety when I come to work. I have an employer that doesn't provide me with health security in the US market where we're dependent upon that from our employer. And so there's some very fundamental issues that are going on, which are just about equity in the workplace.

But there are now also these broader questions as individuals have retreated into these workspaces in our homes and said, "What is important to me?" You know, I think the simple fact that I'm an executive in a fairly intense job, and I haven't worn business casual from the waist down in 18 months, right? I mean, I think even just where we spend our money on luxuries and clothes and everything else, all of that value calculus has changed for a lot of people, and you start to say what actually matters as I make these choices?

GEORGIE FROST: When I'm having a bad day or something is on my mind personally, I love going to work. I love the fact that I don't have to think about what's going on in my life. I don't want the two bleeding across. What would you say to people, businesses, who say this has all gone too far, this wellbeing, this diversity and inclusion, all of them are wonderful things to have, but have we not just gone a bit too far? Is it not just go to work and do your job?

GABI NOVACEK: Yeah, it's funny. I don't know if you ever watched "Mad Men," but there was this great scene where Don Draper is mad at Peggy, and but I he's like, "I pay you, I pay you the money." You know, like that's it, like you have the job and I pay you the money. That's what I owe you, you know?

GEORGIE FROST: I sure there's a lot of bosses that think that, right?

GABI NOVACEK: Yes. There's something to be said for that, and I think at the end of the day, we are businesses and we are in business for a purpose and we need to fulfill that mandate. That is what we are here for. I think the challenge that gets presented by that though, is when you're operating in an environment where your success is predicated upon your human capital, not to make it sound too transactional, but if you think about one of the most important assets and one of the most important investments you make is in your human capital.

And you depend upon that human capital to generate the things that drive the business. And when you struggle to hire your fair share of talented people in the market, when you struggle to keep them employed and staying with you, when they come to work distracted and unmotivated and unhappy, they don't generate the types of work and thinking that you would hope. And there's a very, very real impact on the ROI that you get from those human beings. And the world is becoming more complicated and it's becoming more diverse, and it's simply a cost of doing business is to be able to actually see a diverse group of human beings be successful inside of your environment if you actually want to be a successful business.

GEORGIE FROST: Agreed. And we're talking about sort of inside your environment, the things you control. I was reading about a company that asked their employees at the end of the working day in the lobby to press a button, smiley face if they're feeling happy, frowny face if they feel sad. I don't know about you, it sort of reminds me of service station toilets and how clean they are, but anyway, somewhat crude and maybe a little gimmicky. Of course, it depends what you do with that information. But there's certain things that businesses can control. You know, the quality of your work. Is there some bullying going on, those sorts of things? But they can't control what happens outside. So where do we draw the line? How, as a business, are you trying to measure, trying to promote satisfaction at work with the things that you can't actually control?

GABI NOVACEK: So we have focused on the things that we can control, but we haven't been broad enough in what we understand that to include. Like I talk a lot about we focused upon what happens to people when they come to work. Am I experiencing kind of unconscious bias from my manager, or did I get left out of a promotion opportunity because there was something that was perceived about me, did somebody use language that was offensive?

Like, there's a lot of things that happen to us that are squarely in the realm of businesses to say I need to create an environment that's free of discrimination and bias and the like. But I think there's a broader aperture to that. If I think about, I have a group of human beings who I've hired into the business, who I want to see become executives someday, this is my high potential talent. Is it enough for me to say they come to work and they aren't treated badly?

Or do I actually need to say, I actually want to motivate them to be innovative, I want to tap into their desire to be successful, I want to find a way to give them the mentorship that they seek, because for them it's really important to feel like they have role models? Like I'm actually creating a broader environment that breeds success in the workplace environment. I'm not going to solve everything.

You know, I think there's been a lot of very well intended work on topics like racial equity and the like that have been trying to bring a lot of discourse into the workplace, and it's really interesting and it's really important, but at some point you start to say, "Okay, is that book club, is that going to be the thing that actually changes the outcome for somebody at work?" Like, yes, it might make them feel better, because somebody's listening, but is it really going to change what they experience day to day when they work in a team?

Is it really going to change whether or not they get that opportunity? Does this tap into their motivation to do work that has impact? Maybe, maybe not. And I think that's where we start to run into trouble is we don't always compute what the intended outcome is of where we're focusing.

GEORGIE FROST: Some of the argument that's been thrown up about diversity, inclusion, wellbeing, been viewed as actually causing divisions between people, the mothers that are allowed to work flexible hours and then other people saying, "Well, that's not fair." Could some of these things create divisions? How do you make sure that that is not the case?

GABI NOVACEK: Oh, absolutely, absolutely. And I think we're seeing it in the data as people talk about in our survey and research work, their perceptions of the value of DEI programs and whether they benefit from them or are harmed by them, etc. There are some concerning trends that are starting to emerge, especially amongst population groups that would typically be grouped into the majority. So in particular, kind of white, cisgender, straight men. They're starting to communicate more intensely in our survey data that they perceive DEI not only to not be helpful, but actually to be harmful to themselves.

GEORGIE FROST: Do they explain why?

GABI NOVACEK: So we follow up survey data with focus groups and interviews to try to understand and what it boils down to is this sense that, and I'll make it sound academic, but it's a little bit of there is a fixed quantity of power, resource, and opportunity available, and when you disproportionately allocate some of that to people who have been identified as marginalized, I lose out.

The reality is those disadvantaged groups have missed out. You know, we actually are righting what have been intensely discriminatory and unequal processes that have manifested through time, and we are trying to reshape behaviors and outcomes such that they reflect what should be sort of everybody getting their fair share at the end of the day, and that is very painful.

But I think the there's another piece of it, which is you can focus on how do I better allocate a total quantity of things or you can say how do I actually make that quantity of things bigger and more substantive and more kind of inclusive of everybody? And so one of those things might be to say, "Listen, like I can't create 15 new executive leadership positions inside the company to make everybody feel like they can get one. But what I can do is I can create career paths and opportunities where people can engage in work day to day that is exciting, that's stimulating, that gives them access to the big problems that they're most excited to work on."

At the end of the day, we have to actually deliver on our jobs. We have to do what the work output is that's demanded of our role, but I can actually step back and say, "I can re-craft the rhythms, the rituals, the routines of the day in terms of how we work together to get that done so that more people can be successful in delivering that."

And what you're doing is you're taking the conversation away from: a target has been set and I'm not part of that target and I'm going to lose out, and instead, what we're saying is no, we're going to reshape how we think about kind of the nervous system of the way we work every day, and we're going to rebuild it in such a way that we're actually expanding the breadth of who can be successful in that context, in that environment and who can tap into the things that matter most to them. It's a win-win when that happens.

GEORGIE FROST: You spoke about humanity. I'm wondering if you have optimism that what's happening at the moment, whatever you want to call the great resignation or the pandemic or whatever, is actually making a seismic shift in the way that we view work, all of us?

GABI NOVACEK: I really hope so. Before I was a consultant, I was a PhD in the social sciences and so much of the work that I did was studying through these great inflection points in human development. And I would love to think that this is one of them. I get really excited when I look at the US and I see the seismic change in terms of kind of the values and the expectations that a generation is putting upon the role of work. I think as somebody who grew up- I remember getting the internet in college and I think we were one of the first classes to like actually really have like, email addresses and web access and stuff, and now I'm looking at a generation who's grown up with these technologies, with these opportunities. Like they're able to rewrite the world in a way that we couldn't have imagined. I mean, I don't know about you, but I know when the pandemic first started and I was on like my ninth consecutive hour of watching "Tiger King" on Netflix, I think, it's like, can you imagine if we'd had to go through COVID without technology? How would we eat and what would we watch? I mean, it was just shocking.

But now I look and I say, "My God, like we've got this generation who is growing up in the middle of this and saying the constraints that defined how we work are gone, that defined where we need to live are gone. I can reshape how I make decisions in ways that look really different. What I value can now look really different. The pressures I can put on kind of my workplace and how I want that connection and relationship to look can be different."

It really excites me because I do think we're on the cusp of something really new, and I think it's been building, it's been building. The tools and the infrastructure that we would let it happen have been growing. And now we just have this huge catalyzing event that just blew everything up, and now we get a chance to actually rewrite the rules.

GEORGIE FROST: Gabi, thank you so much. And thank you for listening. We'd love to know your thoughts. To get in contact, leave us a message at thesowhat@bcg.com and if you like this podcast, why not hit Subscribe and leave a rating wherever you found us? It helps other people find us too.