December 13, 2022 – Talent management – the strategy behind recruiting, developing, and maintaining employees, especially top-performers – has been important to companies for decades. But since COVID upended workforce norms, talent management has become priority No. 1. With personnel in the driver’s seat, it’s a hot market, say executive recruiters.
As the pandemic edged toward an endemic, people reassessed their lives, their goals, and their jobs, according to a new report from IMSA Search. From employees lacking qualified childcare or eldercare options, to those dissatisfied with work conditions and compensation, to those evaluating their purpose and life priorities, employees walked out. According to a recent Pew Research Center survey, “low pay, a lack of opportunities for advancement and feeling disrespected at work are the top reasons why Americans quit their jobs last year.” And the Great Resignation shows little sign of abating: A 2022 Global Microsoft Corp. Work Trend Index survey reports 43 percent of employees are contemplating quitting their jobs.
Across the Globe, Hyper-Focused on Talent
With so many companies facing heightened employee turnover, chief people officers and chief human resource officers have moved front and center in board rooms and leadership meetings, according to the IMSA Search report. CPOs and CHROs play an essential role as companies struggle to navigate hybrid/in-person/on Zoom, maintain culture and productivity, handle challenges around disease uncertainties, and address employees’ evolving needs and wants. Leaders increasingly need to devise new short- and long-term strategies for hiring, DEI, training, evaluation, succession, and more. And these strategies need to be nuanced further for high-performing talent.
For Current Employees – Engage, Communicate, Nurture, Compensate, Reward
Retention is critical, especially for top performers. “Strong organizations are updating strategies in consideration of the specific issues relevant to employees today,” the IMSA Search report said. “With turnover rampant, finding new talent is a top priority. But don’t lose sight of the employees already in the room. Engage. Figure out how to leverage employee positivity. At the same time, listen for different perspectives and listen objectively to fully understand the critiques. Check-in more frequently. Today, internal communications is more important than ever, to understand what employees want to hear – what topics are important to them and where they want more information. In today’s tight labor market, marketing to employees takes on new meaning.”
IMSA Search says it is critical to communicate openly – even about resignations. “Often, corporate communications give short shrift to announcements about departing employees,” the report said. “Plan how and what you intend to communicate when people leave. Conduct exit interviews to uncover hidden challenges. Demonstrate appreciation for each person’s contributions. Positive communication maintains positive culture.”
Nurture. Employees hired pre-COVID may need training to develop new skill-sets. For example, how to lead a virtual team; how to make room for all voices in large Zoom meetings; how to respect privacy while wanting everyone to have cameras on; and the list goes on. “Encourage mentoring, particularly with fewer in-person encounters between junior and senior people in the hybrid workplace,” the IMSA Search report said. “High-performing talent will likely be anticipating their next roles, so be proactive in sharing career path options. Training, upskilling, and career planning shows employees they can advance internally, discouraging them from looking outside.”
Compensate and reward. “Review and update your compensation philosophy,” the IMSA Search report said. “Conduct a complete organizational assessment of salaries, benefits, and tiers. Account for new hires to ensure current employees, especially highly-valued current employees, are rewarded and feel appreciated when new employees are brought on board.”
Recruit Differently, Hire For Potential
Beyond slowing attrition rates, the IMSA Search report says that companies need to take a more sophisticated approach to their talent pipeline. “Managing talent effectively starts with recruiting well – reassessing job requirements, reaching a broader candidate pool, searching beyond traditional geographies and backgrounds, considering diversity, equity, and inclusion,” the study said. “Skills that were deemed essential five years ago may no longer be relevant today and likewise, in today’s hybrid-world, other skills may rise to the highest level of priority.”
Focus on the future is essential. Many companies are hiring today for skills needed tomorrow, looking beyond a candidate’s industry experience. With so much in flux, recruiting for potential is important. “Forward-looking organizations are looking to create or build their talent operating models faster than ever before,” said Luminita Potorac-Roman, managing partner of IMSA Search Global Partners Romania.“ The visionary perspective assesses a candidate’s talent and skills, planning around star performers, not pigeon-holing individuals based on roles and geographies.”
What’s On CEO’s Minds
Today’s CEOs have a lot on their minds. “Buffeted by the COVID pandemic-now-endemic, they have led companies through significant economic, political, and social disruptions.,” the IMSA Search report said. “As business and society become more intertwined, corporate leaders are having to address social challenges such as ESG/sustainability, DEI, and others. The CEO job description has expanded beyond day-to-day business and keeping the board and shareholders happy, to include a wider list of stakeholders – employees, customers, suppliers, governments, and activists.”
Pandemic is a Wakeup Call, Transformation is Imperative
In the EY 2022 CEO Outlook Survey of 2,000 global CEOs in 51 countries across 13 sectors, 86 percent reported being significantly impacted by the pandemic. These leaders understand the imperative to act boldly, transforming their companies, so they do not fall behind in the race for market-leading growth. CEOs are looking beyond short-term pressures to invest in long-term value creation. Strategies include future-focused reconfiguration for resilience in the face of unforeseen crises, investing in existing businesses for organic growth, and active M&A to enhance assets in the areas of technology, talent, innovation, and ESG/sustainability.
“Senior executives are challenged at every level every day, having to navigate the tensions between the short and long term,” said Phillip Price, managing partner of IMSA Search Global Partners U.K. “We speak with CEOs and CFOs all the time. Recognizing and acting upon this dichotomy has and always will be the key to sustainability, growth, and longevity. Part of the downside of the constant drive for positive shareholder/stakeholder returns is that it may push a short-term approach.”
Looking Beyond the Company, Leading the Ecosystem
“Demands on CEOs are increasingly complex given a constantly shifting business environment, competing needs of an expanded stakeholder list, accelerated innovations in technology driving new products and new markets, global political tensions and outright conflict, and the growing demands for social change,” the IMSA Search report said. “To be successful, CEOs must influence the ecosystem in which they operate.”
How Long Will the War for Talent Continue?
You’ve heard the buzzwords by now. All it takes is one scroll through LinkedIn to become quickly acquainted with terms like “The Great Resignation” and “candidate-driven markets.” A small cadre of job seekers among the top percentile of talent are able to write their own ticket, picking and choosing where they land, according to Richard Slayton, managing partner and chief executive officer of Slayton Search Partners, in a new report. “Another group of perfectly capable individuals is finding it hard to stay in the workforce altogether, leading to a very real talent shortage,” he said. “It’s not all about people deciding to quit their jobs to start a new life, however. The workforce is reaching peak retirement age, with many Baby Boomers pulling out of the rat race. In addition, many parents are finding it necessary to have one person forgo a paycheck to stay home with the kids.”
The IMSA Search report also pointed to an HBR.com study in which 105 board directors from 311 North American companies in 11 industries were surveyed, which suggested some strategies for stewarding the ecosystem:
• Mentor and empower senior executives to shoulder more of the day-to-day.
• Understand key contributors to the broader system and their interdependence.
• Identify and unite ecosystem members around a shared objective.
• Build public-private partnerships to connect the ecosystem for impact.
• Anticipate the risks associated with engaging in social and political areas of interest.
Optimism on the Decline
According to Fortune/Deloitte’s Summer 2022 CEO Survey of 116 global CEOs, optimism is on the decline and expectations for growth are lower than a year ago. Over 80 percent expect inflation to disrupt business strategies in the coming year, and the top concern is labor and skills shortages (59 percent). To combat the Great Resignation, CEOs are employing more human strategies, such as flexibility in work times and locations, and more career development and reskilling/upskilling, instead of financial strategies like increased pay and expanded benefits.
The End of Globalization?
The pandemic was disruptive on multiple levels. Manufacturing shutdowns, travel and trade restrictions, supply chain issues, product shortages pushed businesses to become more self-reliant. Multi-national companies and businesses with international supply chains have struggled with these issues for years in the face of rising nationalist movements, trade wars, and other restrictions. In a letter to shareholders, BlackRock CEO Larry Fink wrote that: “The Russian invasion of Ukraine has put an end to the globalization [of the] last three decades.”
According to Phillip Price: “The Ukraine war, commodity shortages, and other negative effects are accelerating the pace of deglobalization. We are at the early stages of a decades long shift. We counsel clients about the importance of hiring senior talent experienced in leading through change. Recognizing that now will help businesses get ahead of the curve and set themselves up for future success.”
‘Stagility’ and Other Leadership Lessons
“CEOs must manage many details simultaneously, with different elements emerging as urgent at different times,” the IMSA Search report said. “Like all of us they make mistakes. The best CEOs acknowledge them quickly, recover, correct course, and move forward, always with an eye to the future. McKinsey.com calls this “stagility” – being stable and agile at the same time. Also, McKinsey’s survey of 67 CEOs suggests those who demonstrate resilience and humility, grounded in purpose, are able to reach out, learn from others, build a team that speaks truth to power and makes decisions together as a strong unit. The CEO is the leader of the team, sets the bold vision, yet values input that builds collective ownership.
Other leadership lessons include: Embrace the board as a partner and source of expertise with multiple perspectives and experiences, not as a stakeholder group to be managed. “To be is as important as to do, particularly in a remote work environment; be openly authentic, share your passions and fears, bring your entire self to work,” the IMSA Search report said. “Connect with big societal issues which align with your business; people are expecting you to lead society in addition to your company. Manage energy and avoid burnout, your own and your employees; in this era of 24/7 connectivity, AI, robotics, the pace is faster than ever; after every sprint make time to recover, recharge, regroup.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media