July 29, 2022 – The Great Resignation and Reshuffle has continued into the summer, and it’s hitting the C-suite particularly hard. While the demand for top talent exceeds the supply, talented executives are more inclined to consider external opportunities, according to a new report from DHR’s Mike Magsig, Mary Matthews, and Heather Smith. As a result, companies seeking such talent must be creative and flexible in the selection process.
What’s more, high-potential, mid-career executives are open to alternative careers, according to the DHR report. “Employers need to find the means of accelerating high-performing employees’ careers beyond the pace and substance of pre-COVID practices,” it said. “A clear path of career trajectory has become required to retain most valuable employees. Employees who have already built career capital are reshuffling, and since the C-suite is not immune to The Great Resignation, corporate succession planning has become more important than ever.”
The Rise of The Resignation & Reshuffle
Workers, globally in many instances, aren’t just leaving the workforce (resignation)—millions of people are reconfiguring their careers (reshuffle). Some are leveraging the current hiring crisis to facilitate a stronger career position.
Others have decided to work for themselves—with the number of self-employed workers in the U.S. rising by 500,000 since the pandemic, according to a report from The Wall Street Journal. Many more, however, are simply shifting into new industries and careers that offer higher wages or better align with their values.
“For talented individuals, in high-demand industries like tech, we’re seeing a lot of movement,” said Anthony Klotz, associate professor of management at Texas A&M University, and the originator of the term Great Resignation. “People are finding jobs that give them the right pay, benefits, and work arrangements in the longer term.”
Get the Facts
Globally, 72 percent of senior leaders were thinking about leaving their role in the next two years; in Singapore, the number rises to 80 percent of senior leaders, according to the Kelly OCG Global Workforce Report.
Additionally, firms with poor succession planning are hindered by a weak leadership pipeline and will grow their revenue only half as fast as more-prepared competitors, says Gartner’s HR Leaders Monthly.
Microsoft’s Work Trend Index found that at least one quarter of high-potential people will likely leave before the opportunity they are being developed for becomes available.
The DHR report also notes that to attract and retain top talent, companies should focus on leadership development and succession planning. “Future C-suite leaders need to learn to create followership momentum and not just leadership strength,” the report said. “Leaders become great because people are willing to follow them. Ambitious professionals follow individuals who create and drive success, including providing them with opportunities to grow professionally and advance their career.”
Create C-Suite Redundancy
Intentional redundancy within an organization requires developing several people at the same time for critical roles—especially C-suite positions. DHR explains that establishing coaching and development programs for high-potential employees will support this plan. External candidates should also be cultivated for these positions by creating strong talent pipelines.
Refresh the Succession Plan
“To ensure succession continues long after the pandemic disruption passes, focus on long-term talent plans,” the DHR report said. “Refreshing the succession plan now will prepare strong leaders to be fit for the future. Build and successfully execute a well-constructed succession plan to mitigate risk and retain top performers looking for growth opportunities.”
Keeping Your Talent
For some, continued uncertainty and talk of a hot job market has led to curiosity about trying a new role, according to separate report from DHR. But for more, the root cause of executives leaving is simpler: Organizations aren’t having the hard conversations needed to keep their talent or thoughtfully adapting to new circumstances, and people are burned out, according to Sara Garlick Lundberg, a partner in the non-profit practice of DHR Global. “Common themes in my conversations include uncertainty in the face of transition, stress from expanded roles, deflated compensation, and lack of understanding of the complexities of this moment,” she said. “The costs associated with replacing talent are high: Lost time and work means less time spent delivering on your mission, and recruiting requires hours of work, fees to firms, and energy spent onboarding.”
How do you get ahead of the trend and prevent your high performers from becoming part of the Great Resignation? Ms. Lundberg spoke with her colleagues at DHR’s Leadership Consulting to solicit their thoughts.
As the Great Resignation has extended worldwide, compensation experts have reminded organizations that there are numerous ways to attract and retain employees besides paying them higher wages. But there’s overwhelming evidence that the go-to move for most companies continues to be paying more, according to the latest findings from Korn Ferry, which found a record a number of pay raises over the past quarter.
“One of the things that underlies our current challenges is culture. Look at your culture and whether you’re practicing your core values,” said Maryanne Wanca-Thibault, DHR Leadership consultant. “Start at the very top.”
When culture is articulated but not lived within an organization, trust erodes, and culture can turn negative, Ms. Lundberg said. “Are staff members engaged and asking hard questions? A culture where people are not is one where things might be askew. Organizations led by longtime leaders, especially founders, can be particularly susceptible.”
Ms. Wanca-Thibault added: “Questions are essential. This may seem like a question of niceties, but an open culture where engagement is authentic, and culture is lived builds the internal environment that keeps talent and attracts new leaders.”
Invest In Connection
A recent New York Times survey of early to mid-career professional noted that many “pandemic hires” were feeling rudderless and adrift in the workplace. Remote work may be efficient, but those who don’t invest in relationship building lose out. In a recent NYTimes piece, Ann Helen Peterson and Charlie Warzel noted, “Small talk, passing conversations, even just observing your manager’s pathways through the office may seem trivial, but in the aggregate they’re far more valuable than any form of company handbook. But that doesn’t mean they can’t be translated into a remote or flexible work environment.” These activities support what Ms. Lundberg calls the soft connective tissue that builds trust and makes a company an enjoyable place.
“Activities and rhythm are essential … people forget that in person we had those informal points of connectivity,” said Christine Greybe, president of DHR Leadership Consulting. “In the remote work environment, you really need to create that. In the virtual world, staff connectivity must be an investment. It lives at the individual level (calling a colleague who is sick, for example), and at the team level. At DHR, our wellness team hosts everything from remote cooking, yoga, and painting classes to coffee chats with leadership. When timing has been right, leadership also prioritized COVID-safe, in-person gatherings.”
Keeping Up with Pandemic Adjustments
More than two years into the pandemic, individuals continue to face complicated and compounding pressures – from office returns and limited childcare, to depressed compensation paired with expanding roles, according to Ms. Lundberg. Ongoing adjustments that reflect the interconnectedness of our work and personal lives are the new normal. “We don’t always get involved in personal matters, but in this time… it’s hard to separate professional from personal, and leaders who understand this and adjust are coming out ahead,” said Ms. Wanca-Thibault.
“Strong leaders are connecting formally and informally – more importantly, they’re taking action,” Ms. Lundberg said. “We have seen clients provide those who are caregiving with monthly stipends to support added childcare needs, mandatory office-wide weeks off, and more.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media