As More Employees Leave, Companies Must Shift Their Thinking on Talent Management

Throughout my career, I’ve had to lead teams through a dizzying array of changes, including shifting business economics, the rise of globalization, disruptive technologies, new regulations, increased competition, the growing diversity of society, and many more.

Today one of the most significant workforce trends is the growing labor shortage, which is driving a material change in the employee/employer contract – a shift in the balance of power, if you will, from employers to employees. This could help reverse the trend of stagnant middle-income wages that has been a feature of the U.S. economy for decades. But it could have other impacts as well.

Even before the pandemic, demographic trends – particularly the large number of Baby Boomers reaching retirement age (10,000 every day!) – had economists and business leaders concerned about whether there would be enough workers to meet future talent needs, and how that could potentially lead to declining productivity and lower economic growth overall. Now, exacerbating the problem, employees are leaving their jobs in record numbers as a result of the pandemic and other factors.

• Nearly 20 million workers quit their jobs from April through August (U.S. Department of Labor). While many are moving on to better opportunities or better wages, others are simply dropping out of the workplace or retiring early.
• 40% of employees say they are at least somewhat likely to quit in the next three to six months (McKinsey).
• The majority of women are not satisfied with their jobs and do not see a long-term future in their current job. Nearly 3 in 5 women plan to leave their employers in two years or less (Deloitte).
• 60% of CEOs expect to expand their workforce, but 74% report problems attracting qualified workers (Conference Board Q3 CEO Confidence Survey).

Whether you call it the Great Resignation, the Great Attrition, the Revolt of the American Worker or any other name, it is time for organizations and their leaders to place long-overdue strategic attention on talent management.

OF course, companies must do better on core elements of their employee value proposition, including:

• Equitable pay
• Benefits that meet employees’ changing needs
• Work-life balance
• Career development and opportunity

However, business leaders cannot stop there. I believe the problem goes deeper. Leaders who do not listen to their employees and learn what’s really driving workplace dissatisfaction will not attract and retain the talent necessary to be successful in the changing economy. It boils down to something that many companies talk about but most have not been able to achieve: creating a truly inclusive work environment.

The need for empathetic and inclusive leadership has only increased during the pandemic. In times such as this, employees want managers to listen to them, understand them, and care about them. Here’s how McKinsey put it:

“Employees are tired, and many are grieving. They want a renewed and revised sense of purpose in their work. They want social and interpersonal connections with their colleagues and managers. They want to feel a sense of shared identity. Yes, they want pay, benefits, and perks, but more than that they want to feel valued by their organizations and managers.”

According to a McKinsey survey, the top three reasons that employees cited for quitting were that they didn’t feel valued by their organizations (54%) or by their managers (52%) or because they didn’t feel a sense of belonging at work (51%). Minorities and multiracial employees were even more likely to say they left because they didn’t feel they belonged at their companies.

Deloitte’s Women @ Work survey found that women continue to deal with non-inclusive behavior, even in the virtual workplace. More than half experienced some form of harassment or microaggression in the past year. On the positive side, Deloitte says that “when women experience a truly respectful and inclusive culture, they are more engaged, productive and loyal.”

This should be a wake-up call for business leaders.

While some might view technology as part of the solution to the labor shortage, technology must be introduced in a manner that does not further fuel the problem of worker disaffection.

Leaders must take a hard look at their work environment and culture; the people they select to lead others; how they develop talent; how they give employees a voice in the future of the organization; and how they create an engaging work community where every individual feels valued, respected, listened to and rewarded for their contributions.

Some might see this as a challenge. I see it is an opportunity. Because those who get this right will find it easier to attract and retain top talent and build high-performing teams that lead the way as we emerge from the pandemic.