In his annual letter to CEOs, BlackRock CEO Larry Fink says businesses should be prepared for pandemic-fueled workplace changes to be permanent.
As CEO of the world’s largest asset manager, Fink has valuable insights into the state of the worldwide market and workplace. In his letter to CEOs, Fink acknowledges how much change has occurred in the last couple of years, some of which he believes is permanent.
One key area that Fink believes has permanently changed is the emphasis on employee well-being.
“Creating that environment is more complex than ever and reaches beyond issues of pay and flexibility,” Fink writes. “In addition to upending our relationship with where we physically work, the pandemic also shone a light on issues like racial equity, childcare, and mental health – and revealed the gap between generational expectations at work. These themes are now center stage for CEOs, who must be thoughtful about how they use their voice and connect on social issues important to their employees. Those who show humility and stay grounded in their purpose are more likely to build the kind of bond that endures the span of someone’s career.”
That “flexibility” Fink speaks of extends to the workplace itself, and how employees are now doing their jobs.
“At BlackRock, we want to understand how this trend is impacting your industry and your company,” Fink continues. “What are you doing to deepen the bond with your employees? How are you ensuring that employees of all backgrounds feel safe enough to maximize their creativity, innovation, and productivity? How are you ensuring your board has the right oversight of these critical issues? Where and how we work will never be the same as it was. How is your company’s culture adapting to this new world?”
Fink also makes it clear the companies that ignore these fundamental changes do so at their own peril.
“Workers demanding more from their employers is an essential feature of effective capitalism,” Fink warns. “It drives prosperity and creates a more competitive landscape for talent, pushing companies to create better, more innovative environments for their employees – actions that will help them achieve greater profits for their shareholders. Companies that deliver are reaping the rewards. Our research shows that companies who forged strong bonds with their employees have seen lower levels of turnover and higher returns through the pandemic.
“Companies not adjusting to this new reality and responding to their workers do so at their own peril.”
It will be interesting to see how many companies take Fink’s advice, versus how many try to go back to business as usual.