The Great Resignation may have cooled down somewhat, but it’s nowhere near over. According to the latest federal Job Openings and Labor Turnover report, about 50.5 million people quit their jobs in 2022, besting the prior record set in 2021. This is a strong sign that the balance of power, which shifted towards employees during the pandemic, continues to remain there.
Most employers are using every trick in the book to attract and retain employees, offering attractive salaries, career growth opportunities, fancy titles and other perks. These traditional levers are effective for attracting traditional, or old-school, employees. However, the Millennial and subsequent generations have always wanted other things from their careers, a trend that grew stronger when the pandemic drove people to reassess their priorities in life. To attract these workers, who are the future workforce, employers will need to rethink their talent management strategies.
At the center of that rethink is the reality of hybrid work becoming the norm. But that is only one part of it. To understand the employee perspective of the new work environment, and what American enterprises can do in response, WSJ Intelligence, in partnership with Infosys, recently surveyed 1,002 senior executives from large U.S. companies.
What Employees Want
The overarching message from the study is that there is no universal template that is applicable to all organizations. It’s all about finding the solution that best fits the situation, such as the business the company is in, its hiring needs and work culture. Interestingly, even when an organization believes that a return to in-person work is better for business, the balance of power being what it is, it has to defer to its employees’ gains from a hybrid work model. For example, in the survey, 60% of the responding senior executives acknowledge that the option to work remotely improves employees’ (specifically knowledge workers) work-life balance and satisfaction levels. That response points to the wisdom of offering remote work options.
Addressing the resistance, especially from valued employees to a (full or partial) return to the office is the biggest challenge in formulating new work policies. To draw employees back into office, employers need to make it worth their while by offering incentives for on-site work while taking such actions as improving workplace diversity and setting communication boundaries for remote, hybrid and in-office workers. And they have to do much more to keep them from leaving, such as:
- Demonstrate value and purpose. Employees of the future — Millennials and younger — take shared values into account when choosing their employers. Employees value organizations that align business strategy with purpose when the business goals align with their own personal goals and values. This gives the employees a sense of pride in their work, as they feel energized and motivated by all they’re doing and accomplishing. Purpose defines organizational culture, which drives employee experience and loyalty. As more employees prioritize working for businesses that share their values, they will feel a stronger sense of belonging, resulting in decreased turnover. Further, the workforce of the future wants their employer to focus on more than just the businesses’ bottom line, and instead focus on creating solutions for broader societal challenges. As part of this, there’s a rising expectation that businesses create value for all stakeholders by earning profits in a sustainable way, minimizing the harm that the business causes to society. Therefore, employers must factor purpose — looking beyond shareholder profit to create stakeholder value by benefiting people and societies — in their talent management strategies. Some ideas include aligning purpose with employee performance evaluation or rewarding employees who are true to company values.
- Focus on skills. The future work environment is not just a location thing; it’s more about enabling people to thrive while working in the office, at home or from any place in between. Some skills are essential for this, notably, the ability to communicate, collaborate and use digital technology. This could require employers to reassess hiring criteria, favoring skills over academic qualifications in certain roles.
- Dig into the gig. A shortage of skilled talent is one of the biggest feeders of employee power. However, employers can access some great talent by opening their doors to gig workers — independent professionals with specialized skills who work to a flexible working arrangement, and from anywhere. This trend is already underway: 53% of respondents in the WSJI survey said their companies were using contingent workers to increase short-term capacity while 57% were drafting plans to onboard and upskill such workers.
- Offer ultra-flexibility. Burnout, a hostile work environment and feeling unappreciated at work were major contributors to the Great Resignation. Very many of those who quit in 2020 and 2021 started their own businesses. For this talent pool, autonomy is everything. Organizations seeking to attract these people will need a very strong employee value proposition, with possibly unprecedented flexibility. For example, they may need to structure the work in terms of discrete deliverables rather than hours of work; or they may need to allow the employees to determine what outcomes they will achieve and how they will achieve them. Of course, flexible location and timing are table stakes.
Even if organizations would like to, there is no going back to the old way of work. The shift to hybrid seems irreversible at least for now and is being driven by employees who are calling the shots. In a highly competitive talent market, employers need to not only offer remote working options but also purpose, skilling opportunities and unprecedented flexibility, to attract the workforce of the future.
Editor’s Note: Additional Content
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