There’s no doubt about it; workforce transformation is fueling a global war for talent, as businesses wrestle for skilled staff.
Last summer, seven in ten employers globally reported difficulty finding workers with the right skills, elevating talent shortages to a 15-year-high.
The reasons are two-fold.
Firstly, the pandemic has put strain on schools and governments already trying to re-skill for the Fourth Industrial Revolution. In the US, which has seen the talent shortage treble in the last decade, there is a push to attract more international talent to postgraduate STEM programs with $152bn funneled into job training.
Secondly, and perhaps more importantly, modern jobs fundamentally lack the draw to bring talent back to work. This imbalance of demand is an international problem that goes well beyond Covid-19 and its aftermath. What we are seeing is top talent choosing to turn its back on employment that won’t meet its basic needs.
The ‘Great Reservation’
It is no coincidence that the Great Resignation came to a head last year. Staff already unhappy with their jobs in 2019/20 weathered job market insecurity and were then handed the keys to leave. The surge in demand for staff since reopening the economy also gave workers the space to resign-now and look for the right opportunity later.
Given governments can only do so much to create talent, it’s businesses that will have to learn how to retain it. At the heart of this is understanding the changing priorities of staff, and the need for holistic inclusion.
HR’s new challenge
One telling indicator of the problem is the new class of the ‘economic inactive’ (those out of work and not looking for it), that has been allowed to emerge in the last two years. These people would rather not work at all than be trapped in a workplace culture that was not built with them in mind.
While job dissatisfaction is nothing new, the pandemic has turned up the heat. At the same time, as businesses prioritized survival many HR teams have felt overlooked, helping foster cultures of unpaid overtime, stalled career development and disconnection from colleagues.
Austerity through the pandemic was to be expected. But as global companies try to build back, they all risk making the same mistake: misreading the room. Last year we conducted research with 1,000 respondents in business at all levels of seniority. The findings were startling. While leaders are more clued up on the theory of ESG, they consistently fail to communicate purpose and business identity throughout their businesses. Moreover, leaders overwhelmingly choose expediency over purpose, mapping systems built to withstand a pandemic onto the new world with no regard for the changing needs of staff.
As a result, we are seeing staff disconnect. It risks haemorrhaging talent who would prefer to work elsewhere or hang back and wait for something better.
HR’s new challenge will is to work with leaders, to hold meaningful conversations with staff at all levels, reinforcing messaging around shared purpose and company identity. With a clear vision, and with flatter hierarchies, businesses can guarantee talent a consistent, dynamic and open workplace experience.
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Getting it Wrong
But here’s my word of warning: Any HRD that thinks they can lure staff back with financial incentives will be widely missing the mark. Jobseekers in 2022 already expect to be tempted by higher starting salaries and ‘perks’ like remote work opportunities. But this isn’t what they need.
Mental and physical health still linger as complex and existential problems for many workers. HRDs must now take a step back from blanket solutions and tailor their job offers to the complex needs and incentives of potential hires.
Where Covid-19 amplified underlying issues around health, career development and job security, workers now have to pay more attention to their own needs when looking for work. The vague promise of remote work opportunities will not entice those suffering from health issues as a result of pandemic-era working from home. The answer is not a complete switch back to office work either. For while a good third of people never want to work from home again, another third say the set-up suits them quite well.
To be truly inclusive, leaders must move away from top-down policy making. Our research found that senior staff are 50% more likely than other staff to think everybody shares the same vision of business identity; statistics like these show the communication gap has never really recovered, and it never will without inclusion at every level of work politics.
If businesses are to bring back jaded and burnt-out employees, they must dig out the roots of dissatisfaction. Rather than paying lip service to mental health and safety concerns, employers should now be consulting with staff to grapple with the nuance of their individual needs.
No two people had the same experience of the pandemic and we are all still soothing different scars. Now more than ever, leaders must step up and show staff a genuine commitment to keeping them happy, healthy and gainfully employed.
Progress cannot be bought as easily as it could in 2019. Leaders must now prepare for meaningful, considered reform if they are to win back their workforce.