The future of work is a hot topic right now and there are many predictions about the economy and its implications for where, how, and even why we work. But make no mistake, the future of work is a talent revolution. Perhaps the most important imperative is how organizations will attract, retain, engage and develop people.
There are currently seismic changes taking place related to what people are demanding of their employers, how they plan to work and even where they will put down new roots. Talent is one of the most important challenges we are currently facing. And if you’re not rethinking, updating, and reinventing your talent strategy, you’re likely to be left behind.
Here’s what’s at stake and how to respond.
The war for talent
This data sets the context and is also raw material for the business case to reinvent your talent strategy.
Offer and demand. For literally 15 years, we have been planning scenarios and imagining the future, which has included predictions of a “war for talent.” But now, it really is upon us. Globally, 43% of organizations say they plan to increase headcount over the next six months, according to a study by McKinsey. And employees are hearing these siren calls and planning to pursue new roles. An upcoming survey of TINYpulse found that HR managers expect 8.2% of their workforce to quit after Covid-19 restrictions are fully lifted. And according to a Microsoft Study, 40% of people plan to leave their current employer.
The job landscape is changing. The personal reasons people choose new roles and employers vary, but the changes are not based solely on the whims of the workers. A McKinsey study suggests that 25% of people will be forced to change jobs based on three major changes: technology, remote work, and e-commerce. And while there will be a reduction in demand for some professions, others will grow. An example is project management: a study of the Project management institute demonstrated the need for 25 million new project managers by 2030 with the fastest growing in the field of software development.
The demands are increasing. Workers also have more options about how and where to work, as more employers offer hybrid work and the opportunity to work from home. 29% of employees say they are likely to change jobs if their employers require them to work on site all the time, according to a McKinsey study. But many people will still want a combination of places to work and the autonomy to make those decisions. Flexibility in your workplace and the ability to dictate where you work will undoubtedly be important factors for employees considering staying with their current employer or joining a new organization.
People are on the move. We are also seeing a large migration of talent as more people move from higher cost cities to lower cost middle markets where their salaries buy them a better quality of life. Nearly a quarter (22%) of workers say they plan to move within 50 miles of their employer’s office, and 12% have already made this move without notifying their employers, according to a study by PwC. The TINYpulse study found that 59% of employers plan to pay employees the same amount regardless of their location, meaning that people may not have to stay in higher price markets to earn premium wages. An example of talent migration is evident in California based on research from the California Policy Lab: The city’s population is declining while the suburbs are increasing based on affordability and lifestyle.
Competition for talent will happen in new places. Across the country, a new term, “Zoom Towns” describes the mid-market cities that people are moving to. They will not only provide more opportunities for people, but also more competition for the companies located there. For organizations in “Zoom Towns,” the fight for talent will increase. When people can work from anywhere, the competition for talent will come not just from nearby organizations, but from companies everywhere.
How to respond: a model for talent
The best response will be one that is proactive and holistic. You will need to create the kind of organization where people cannot imagine themselves working anywhere else or cannot be attracted to because they are so satisfied. In Greek mythology, mermaids were half-bird, half-female creatures. They would lure sailors to their deaths due to the irresistible nature of their songs, dragging ships towards the jagged rocks of the shoreline. Odysseus was able to pass the mermaids successfully because he had his sailors fill their ears with beeswax so that they could not hear the songs of the mermaids. Creating a compelling culture, fostering team relationships, and developing trusted leadership will help you insulate yourself from competitors who attract your best and brightest employees. If employees love your current organization, it will be more difficult to push them away.
Consider my talent model that includes three key elements.
- First, people tend to get in an organization for its general culture and its equation of values. People interview a company and imagine that they will enjoy working there, making a contribution, growing with the company, and enjoying their co-workers.
- Then people tend to stay with an organization because of team relationships. In a well-known Gallup investigation, people stay with an employer because they have a best friend at work. More generally, it’s about a sense of belonging, social capital, and an overall positive feeling about relationships with colleagues.
- Finally, people tend to license organizations because of leaders. In multiple studies, people cite leadership as the main reason they jump ship. They may not be aligned with where the leaders are taking the organization or with the leaders’ values. Or they may not feel the appreciation of their immediate leader or the leaders in their reporting chain.
You can pay attention to each of these elements by thinking holistically about employee experiences. By doing so, you will create an equation of value for employees that will cause people to find you, choose you, engage with you, and give you great discretionary effort.
A compelling employee value equation
In general, you will need to make your organization the place where people do not imagine leaving, so that they are not tempted to leave. In terms of culture, provide a clear direction, vision, and mission. People want to build cathedrals, not just lay bricks. Your value equation should create a compelling “why” for your company, as well as connect people to the ways they will contribute to the overall purpose of the organization in meaningful and unique ways.
You will also need to ensure that people are clear about their roles, how they intersect with others, how decisions are made, and how conflicts are handled. Also, people should feel that their perspectives are important. Not everyone needs a vote, but they do need to feel like they have a voice. They will be more engaged when they feel ownership of their work and their organization. Finally, people need to feel that the organization can change, adapt, and adjust for the future. People want a place that stands out today, but also an organization where they have a sense of tomorrow, for the company and for themselves. They want a place where they can continually grow and develop, and where they can be excited about the future.
Another element that will contribute to people’s desire to stay in your organization is ties with their colleagues. Research by Steel case You find that people long to belong, but belonging doesn’t just happen by being with other people. It is generated when people have a sense of shared social identity and when they have a line of vision from their work to the work of others to the final value for the client. You can foster strong ties between staff by making sure they spend time together, get to know each other, and share common experiences. But even more powerful than social or general familiarity are shared tasks. Bring people together in teams where they can roll up their sleeves, solve problems, face challenges, and create value together. This will create the strongest bonds.
You will also need to make sure that you are developing leaders. Research shows that when leaders are perceived to be empathetic and in tune, people report better mental health and try harder. You will need to help leaders develop their skills to engage, motivate and develop people, especially if their employees will be working on a remote or hybrid model. You will also need to make sure leaders are brilliant to create a sense of purpose and help people see the importance of their work.
Finally, don’t underestimate the power of place to contribute to a compelling organizational experience. Make sure it provides a sense of energy and enthusiasm, stimulation and inspiration and well-being. Create places that give people the opportunity to connect with colleagues and build social capital. Design environments where leaders are present and accessible, and where people can rub shoulders with talented colleagues, feel connected to the organization’s goals, and come together for a shared purpose.
The future of work will be more ambiguous, faster, more intense and more competitive than before. And the talent will be central. You will need people who are trained, motivated and committed to your organization. You will need to create the conditions for your happiness and fulfillment. It won’t be easy, but it is possible, and you can leverage your organization to attract, retain, engage, and develop people as you go.