The changing role of employee activism and how employers can keep up

While employee activism continues to raise the bar for corporate social responsibility (CSR), employers are growing sceptical about the ability of activism to cause positive change.

Herbert Smith Freehill’s (HSF) Future of Work report has found, for the first time since its inception, that the largest share of employer respondents saw activism more as a risk to be managed than a positive force.

In 2019, 49 per cent of surveyed employers saw employee activism as a positive force, while this year, the share has fallen to 20 per cent.

Let’s consider what’s changed and how employers can best prepare themselves. But first, what is employee activism?

Employee activism

While the term might appear self-explanatory, having a proper grasp of what employee activism entails can affect the way we respond to it. As noted by Megan Reitz, professor of leadership and dialogue at the Hult Ashridge Executive Education program, “The term itself is loaded, and people come to it with assumptions which go on to affect their response.”

Generally, employee activism involves intentional actions taken by workers to “generate social change and will often focus on changing a company’s policies or practices,” said Tyler Butler, chief executive of 11Eleven Consulting. It refers to coordinated actions taken to address a societal problem connected to the company for which they work.

As noted by the Stanford Social Innovation Review, the goals might be to bring about change within the organisation or to use the organisation as a platform to bring attention to a broader societal issue.

The changing goals of employee activism

Times of economic challenge can have a confusing effect on employee activism. While economic pressures, like a heightened cost of living, can both increase the appetite and need for activism to bolster the support provided to employees, it also makes workers less willing to take the risks implied by activism.

To illustrate, 81 per cent of surveyed employees said economic headwinds had reduced the prospects of activism over the last 18 months, said HSF, while 59 per cent expect future increases in activism.

Employers expect the following factors to drive future activism:

1. The growing cost of living (47 per cent)
2. Pay and benefit inequalities (40 per cent)
3. Increased monitoring and surveillance of workers and transparency (38 per cent)
4. Widely available channels for activism, predominantly on social media (37 per cent)
5. Lack of demographic representation in the workforce (36 per cent)

Younger employees appear to be less willing to turn a blind eye to an employer’s contribution to social inequality or environmentally harmful behaviour, suggesting employee recourse to activism will continue to grow.

While concerns around CSR compliance continue to spur employee activism, economic worries appear to be taking centre stage. Some are concerned that a changing agenda might trigger corporate complacency around neglected causes.

As noted by HSF: “While this probably reflects a belief that economic worries will force workers to focus on their wallets, it may also suggest some employers believe they have adequately addressed these issues in recent years.”

On the other hand, employers might expect more activism around pay and transparency in light of Australia’s changing workplace legislation landscape. For instance, as noted by HSF, proposed amendments to the Fair Work Act could require employers to “open their books in a way that will equip staff and other stakeholders to bring about a new wave of employee-driven business change”.

“Some of the legislative changes in Australia prevent pay secrecy clauses for employees, so if you pay people differently within your professionals services staff, there are going to be conversations about comparing pay,” said HSF partner Natalie Gaspar.

Bringing the disputes in-house

As activism threatens to grow, more employers are resolving to handle employee complaints within the company. The share of employers with official consultative forums for employee activism has grown to 81 per cent, said HSF, while the share who do not participate in external employee forums but do so internally has increased from 19 per cent to 35 per cent since 2021.

“Employers know they can’t quell dissent, so they want to engage with it,” said HSF partner Shivchand Jhinku. “But there’s also an obligation to protect people from some of the commentary that might come out – things like racist or homophobic behaviour.

“Employers want to place guardrails on those conversations. It’s about meeting their obligations as employers rather than trying to stifle debate.”

How to respond to employee activism

According to Ms Reitz for the Harvard Business Review, employee activism is on the rise and is expected to become a defining feature of the workplace in the near future. “But,” said Mr Reitz, “our last seven years of research into how employees speak up at work – and our more recent research into politics in the workplace specifically – have shown us that leaders tend to be ill-equipped to handle their outspoken employees”.

Mishandling of employee activism can cost businesses dearly. According to Ms Reitz, there are three traps that tend to ruin the way employers approach employee activism: overoptimism, a belief that an organisation can be apolitical, and rushing to find a quick fix.

“Avoiding all these traps depends on something more fundamental but less easily engineered than corporate process or policy changes,” said Ms Reitz. “That is the degree to which you as an organisational leader are aware of, care for, and see yourself as responsible for wider societal issues beyond the boundaries of your corporate remit.

“Leaders who fail to see themselves and their actions as part of that larger system tend to be those who don’t see developing problems, embrace inaction as neutral, rush to half-hearted solutions – and suffer the consequences along with their organisations.”

Mr Reitz and her colleagues recommend employers the following two questions to best position themselves in response to employee activism:

1. What are the larger shifts in society around the globe that will have an impact on the values your people and customers will take for granted within the next few years?
2. What are the intended and unintended impacts your leadership choices are having on the world around you?