The secret to retaining top talent in a turbulent market

Finding and retaining top talent in a tightening labor market is the highest-priority risk in 2023, according to C-suite and board executives. That’s not all: They anticipate it will still be the top impediment to innovation in 2032—about ten years from now.?

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This might seem inconsistent with the layoffs playing out across industries. Just yesterday, Amazon announced it would cut 9,000 more jobs, bringing its 2023 total to 23,000. And many more companies have enacted rounds upon rounds of layoffs. So, which is it? Do companies value or not value talent? The two competing narratives from leaders might seem diametrically opposed, but that’s not necessarily true. Leaders still recognize talent's critical role in their ability to innovate, scale, and fully realize their value proposition. But as labor cost concerns grow, they’re pivoting to upskilling and reskilling existing employees—or in some cases, remaining employees.

Let’s use Amazon as a fitting example. CEO Andy Jassey on Monday joined the chorus of tech CEOs touting 2023 as the year of efficiency. “The overriding tenet of our annual planning this year was to be leaner,” he told employees in a memo. But as the retail giant slashes jobs, it’s doubling down on other functions that it deems high priority, investing over $1.2 billion into Career Choice, an upskilling program for frontline workers. Of course, Amazon isn’t a charity, and its upskilling resources are meant to train employees for internal roles based on the company’s needs, Beth Galetti, Amazon’s chief people officer, tells Fortune.??

Similarly, Intuit, which laid off just over 700 employees, is focused on reskilling employees for technical roles as it charges forward on A.I. “At every major inflection point, there has to be an evolution,” says Humera Shahid, chief diversity, equity, and inclusion officer and head of talent development at Intuit. “That means the way that we’re organized is different, [and] the skill sets that we need are rapidly changing, especially in technology.”

The takeaway: A shift to resourcefulness does not erase the need for a comprehensive talent strategy. In fact, investing in talent becomes all the more crucial in times of economic duress.

Check out the latest Fortune @ Work playbook to learn how leaders are recession-proofing their talent strategy.?

Leadership Tip of the Week?

?? Your next best employee is most likely your current employee. As LinkedIn CEO Ryan Roslansky writes for Fortune, "if you focus on skills and understand the skills of your existing workforce, and where you need to go as a company, there’s a huge opportunity to help your top talent find different roles inside of your company instead of learning and leaving."

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Leadership Next

In this episode of Leadership Next, Prudential Financial CEO Charles F. Lowrey, Jr. joins hosts Alan Murray and Ellen McGirt to talk about how this legacy insurance company (one of the oldest companies we've ever had on Leadership Next!) is transforming to stay relevant in a rapidly changing world.

Listen to the episode and subscribe to Leadership Next wherever you listen to podcasts, or read the full transcript here.

Those are our biggest leadership stories of the week. Thanks for reading, and make sure to check back next week for more exclusive content.

- Ruth Umoh , Fortune’s Leadership Editor