Key Learnings in the Tight Fight for Talent
November 22, 2022
The Great Resignation. The Return-to-Office Experiment. The Quiet Quitting phenomenon. Here are the tangible and intangible factors companies are seeing that play a role in retaining, losing, winning and engaging talent.
Few things, it seems, are as confounding or as challenging to employers as today’s labor market.
Employers know the story all too well: First came the layoffs and furloughs at the start of the pandemic. Then came government stimulus packages. Along the way workers began voluntarily leaving their jobs in the Great Resignation even as the economy rebounded and rehiring resumed. Lately, talk is of “quiet quitting,” a euphemism for workers putting in as little time and effort as necessary to do their jobs.1
A mixed bag of recent data offers little comfort. In the United States, employers added 263,000 jobs in September, down from 315,000 in August, but the unemployment rate sat at a five-decade low of 3.5%.2 In the United Kingdom, unemployment fell to 3.5% (June-August), the lowest such mark since 1974.3 Yet even with cost-of-living pressures from high inflation, and the specter of a global recession, many jobs still go wanting.
Against this backdrop, employers are wondering what it means that so many workers feel compelled to walk away or quiet quit. Why is there such widespread job dissatisfaction? Do companies truly have a finger on the pulse of what employees want?
As we enter the fourth quarter of 2022, the answers to these broad questions are not hard and fast. And of course, every company faces its own unique issues when it comes to employee retention. But one thing is clear: Many companies are actively soliciting and responding to their employees’ expectations. Company leaders have heard the wakeup call to change their assumptions about their workforces and the culture that employees see and feel.
Below are three lessons we’ve gleaned from what we’re hearing from colleagues and clients.
Money is important, but there’s so much more
With so many people across multiple sectors quitting, there’s plenty of chatter on social media and among individuals claiming that recruitment and retention comes down to the size of the paycheck. That’s certainly understandable with rampant inflation severely reducing buying power. Companies of all types should look at their pay scales to ensure their competitiveness in the market, their productivity, and fairness for all their employees.
But research shows that cash and benefits are not the top factors that determine whether an employee chooses to stay. According to MIT Sloan Management Review, the No. 1 predictor of attrition is a toxic corporate culture.4 That may not necessarily be groundbreaking news for leaders (and few would likely describe their cultures as truly toxic), but it points to the importance of creating an authentic, high-performing and inspiring culture. Pretty posters and great recruitment campaigns won’t fix the reality of what employees value day to day.
The companies we’ve heard from that are successfully retaining talent are making significant efforts in this direction. They’re listening to their teams, responding to the needs they’re hearing, and establishing a work culture where employees feel developed and valued. Although that effort may require some heavy lifting, it is imperative: Companies can’t fix what they don’t understand, and investing time in “stay conversations” rather than waiting to uncover issues during an exit interview is a key strategy.
Workforce expectations are management’s priority
Another key factor tied to improving culture and leadership is the importance of work-life balance. The prevailing thinking is that office employees want more flexibility post-pandemic.5 However, we’re hearing more employees ask for greater visibility and clearer parameters of what’s expected of them and their teammates, such as in-person time at the workplace, hours they’re expected to be available, and value of time versus impact. They also are continuing to ask for greater support from their employers as they navigate challenging social, economic and geopolitical times as well as a myriad of issues related to mental and emotional health.
69% of professionals agree that they are more likely to work for a company whose CEO is devoted to a specific cause that connects to their personal values. — FTI Consulting’s CEO Leadership Redefined Part 4
Employers who make a more concerted effort to get people back into the office at common times — and optimize the experience when people are together — will come out ahead long term because they are building the connections that foster loyalty and build a sense of community. Still, many companies are concerned about taking the risk of any prescribed in-office time in this hiring environment, and many organizations are feeling constrained by pre-COVID office spaces that aren’t well equipped for the way their employees need to collaborate.
Leaders need strategies to ensure that employees understand how norms are shifting and what support is there to help them succeed. Building on the notion of a thoughtful onboarding process, companies today are working through re-boarding processes to reacquaint employees (old and new) with a different way of working and the company’s values and goals.
Everyone is testing and iterating, and there is no one-size-fits-all approach. But it’s clear employers need to rebalance how they’re addressing defining the importance of “we” relative to the “me” decisions that employees are making.
A meaningful experience is paramount
HR leaders have long tried to convince other company leadership about the growing importance of the “employee experience.” Now is the time to revisit those conversations. Companies should actively create opportunities to rebuild work relationships and interpersonal connections. Expressing recognition in multiple ways and ensuring employees feel valued are crucial factors that can lead top talent to go the extra mile in their engagement and productivity.
The onus is on company leaders across all departments to ensure that everything from compensation and benefits to physical space and IT systems is lining up in a way that creates a truly differentiated employee experience.
Differentiate Your Organization’s Culture
We’re all aware of how aggressively headhunters are chasing top talent in this climate where labor holds so much power. Competitors are actively trying to accommodate individual needs and craft offers uniquely matched to employees’ personal circumstances and ambitions. Leaders need to offer the same level of responsiveness and care, maximizing the impact of data, technology and deep listening to shape experiences that reflect real-time workforce insights.
There have always been unknowns to worker retention. Now, the more that leaders build a culture that reflects their values and their commitment to their people, the better they will be able to compete in the tight fight for talent.
The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.
1: Harter, Jim. “Is Quiet Quitting Real?” Gallup. Sep. 6 2022. https://www.gallup.com/workplace/398306/quiet-quitting-real.aspx
2: Ember, Sydney. “U.S. Job Growth Eases, But is Too Strong to Suit Investors.” The New York Times. Oct. 7 2022. https://www.nytimes.com/2022/10/07/business/economy/jobs-report-september.html
3: Partington, Richard. “UK Unemployment Falls But Number of Long-term Sick Rises to Record High.” The Guardian. Oct. 11 2022. https://www.theguardian.com/business/2022/oct/11/uk-unemployment-long-term-sick-jobless-level-pay-inflation
4: Sull, Donald, Sull, C., and Zweig, B. “Toxic Culture is Driving the Great Resignation.” MIT Sloan Management Review. Jan. 11 2022. https://sloanreview.mit.edu/article/toxic-culture-is-driving-the-great-resignation/
5: Bindley, Katherine and Cutter, C. “Workers Care More About Flexible Hours Than Remote Work.” Wall Street Journal. Jan. 25 2022. https://www.wsj.com/articles/workers-care-more-about-flexible-hours-than-remote-work-11643112004
© Copyright 2022. The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.
About The Journal
The FTI Journal publication offers deep and engaging insights to contextualize the issues that matter, and explores topics that will impact the risks your business faces and its reputation.