Knowledge Economy 2.0

There’s no disputing that the US and other Western countries have shifted to a knowledge economy. Even the opening ceremony of the Olympics was built around the idea that we have moved from an agrarian economy through an industrial economy and into a knowledge economy.

As we earn money in a more sophisticated way, we must make similar advancements in the way we reward and care for our workforce. The basic needs of a fair wage, safety, and job security aren’t enough anymore. But why? Shouldn’t people just be happy to have a job in this economy? Actually, no.

To understand what’s happening with increased employee demands in the knowledge economy, let’s look at some basic human motivational theory. Psychologist Abraham Maslow’s Hierarchy of Human Needs puts physiological needs such as food, water, and sleep at the very bottom of the pyramid. The next level of need is security, including personal safety and the security of property and employment. Once those needs are fulfilled, humans start yearning for more. They look for a sense of belonging, self-esteem, and self-actualization.

During the industrial economy, workers worried about the most basic layers of human need—food, sleep, physical safety, and some level of security in having a job. Those basic needs were so unfulfilled during this period that people formed labor unions. Workers needed the power of collective bargaining to gain a livable wage, a fair maximum number of work hours, a safe place to work, and predictable employment practices. In time, society and politicians ensured that workplaces fulfilled basic needs by creating standards for the industrial-era workforce.

As we move from the industrial era of making and selling things into the knowledge era of creating and selling ideas, we have a more sophisticated workforce with more advanced needs. Simply satisfying basic needs is not enough. Organizations must build a sense of belonging, develop worker self-esteem, and provide opportunities for self-actualization. Otherwise, employees will lose motivation and become disengaged.

Employee disengagement has become so widespread that Gallup did a study on it. It found that 71 percent of American workers either are not engaged or are actively disengaged in their work.  For employers, this translates to lower productivity, higher turnover, increased sick days, and even decreases in customer satisfaction.

As your workers become more sophisticated, so must your engagement tactics. In this economy, people may take a job for the paycheck. Chances are, however, they’ll quickly become part of the 29 percent of disengaged workers and probably won’t stay long. Taking the team bowling or to happy hour once a month is not the level of engagement that will fulfill the advanced knowledge worker. Here are some ideas for how to help your knowledge workers climb the ladder to fulfillment:

• Enhance the sense of belonging through shared values. Well-articulated and fully lived values help build a culture—the unspoken norms of a group. When the values hanging on the wall are different than the actions of managers and peers, it’s difficult to figure out how to be part of the group. Conversely, if these unspoken practices can actually be put into words, employees—even prior to taking the job—can figure out how they’ll fit in with the group dynamic.
• Build self-esteem by ensuring a match between the organization’s promise and its ability to deliver. An organization’s promise—its commitment to deliver on its word—is a critical part of its outward-facing brand. But don’t forget that it’s the employees who actually have to deliver on the promise. When developing your brand promise, be certain that it is one that your company has the capability and capacity to deliver. Breaking the promise damages team morale and degrades individual self-esteem. But if you deliver consistently, your team will swell with pride.
• Help people self-actualize by defining a meaningful purpose. People want to be part of something bigger than themselves. When people believe they are making a real contribution to a meaningful purpose, they will pour their heart and soul into every task. Figure out what that big idea is for your organization, then remind people at every turn how they are contributing to that noble purpose. When inspired, they will find new ways to reach their highest potential.

It’s time that our employment practices catch up to the needs of our workforce. Let’s commit to feeding the souls of our workforce—to provide a feeling of belonging, worth, purpose, and meaning. Whichever businesses embrace and deliver on the needs of the knowledge workers will win the talent wars, and ultimately outperform the competition.

Read more stories by Nancy Belmont.