The Great Renegotiation – Are You Ready for 2023?
The Great Renegotiation – Are You Ready For 2023?
By Bill Benson
Wow – loaded question? If you have been on your heels reacting to recruiting and retention challenges, you are not alone. Let’s look at six major factors as we roll into the new year.
Candidate Short Market – Increased Competition – This isn’t likely to change even with a slowdown in the economy. Hiring slowed during The Great Recession when we saw demand decrease significantly. Ironically all those new grads and employees who were not hired from 2008 to 2012 have made our current situation worse. This missing generation of hires has exacerbated an already challenging market to find mid-level professionals and skilled workers. It will be critical to continue to “sharpen the saw” for recruiting and hiring. Openings continue to exceed available workers, and this is not projected to change next year.
Additionally, you are no longer only competing with companies within your local market for talent. You are competing nationally and even globally. This is another reason to consider making some positions remote to draw from a larger talent pool. If your mind is still playing defense, it is probably time to get on offense and find ways to win.
Candidate/Employee Expectations – When are things getting back to normal? The short answer is never. The view of the “workplace” has changed, and employee and candidate expectations have elevated. This a difficult adjustment for “old schoolers” and from a practical standpoint, many smaller and middle market companies who depend on employees working on-site. More than 50% of Millennials and Gen Z workers are considering making a change in this next year. The Great Reshuffle is not over. This is 3% ahead of last year. Well-being/mental health, work-life balance, and lack of flexible work arrangements top the list of reasons for the changes. “When asked what they wanted from a new employer, topping the list was positive culture (46%), with well-being benefits (42%), a sense of purpose and meaning (40%), flexible hours (38%), and more than two weeks’ vacation time (35%) not far behind.” says the Harvard Business Review.* Do you still need more evidence of a “great renegotiation”?
Candidate Engagement and Retention Focus – The number one reason people stay in their jobs has long been based on relationships with co-workers and their manager. This social capital is not the same binding agent for people working remotely or even on a hybrid basis. Newly onboarded employees will have weaker relationships and 56% say they will likely make a change in the year ahead.* These new employees will need more support to get fully integrated. Finding ways for employees to continue to build relationships with each other and improving the integration of newly onboarded employees will need to be priorities for the years ahead. Do you have the right technology in place to make this happen?
Leadership, Leadership, Leadership! – If we ever had a moment where leadership matters this is it. Those who listen and embrace the new mindset and cultural changes will be in a better position to lead into the future. “A willingness to adapt and embrace new ways of thinking and working will be a competitive advantage that sets thriving organizations at the head of the pack.” says Harvard Business Review.* It is critical to elevate and activate the connection between top leaders and the workforce in general. A lack of caring and inspiring leadership is still a significant cause of turnover.
Workplace – Housekeeping first…it is critical to help make transitions from home to office and office to home as easy as possible. The work of moving locations adds to fatigue and burnout. Also, consider whether you are giving people a reason to want to be at the office. A year ago, we thought that 40–50% of employees would end up preferring to be at the office. The data shows that 98% of workers want some type of hybrid or remote work option as part of their work arrangement. As we invest more in home offices it is easy to overlook the work office. How are you making it worthwhile for people to spend time in the office? The answer is not a ping pong table but rather, meaningful engagement, development, and interaction. Empower teams to help make the work arrangement decisions. This gives everyone a voice within the team but ensures that individual decisions about hybrid schedules don’t unwittingly counter the productivity of the team.
Critical Culture Factors: Learning and Development/Purpose and Inclusivity – Another path to greater retention is increased learning opportunities for your workforce. Giving people the opportunity to enhance their current skills and learn new skills will give them another reason to stay. Adequacy of career development and advancement is consistently reported as a factor that improves retention.
Surveys make it clear that people want to believe in their employer and want the work they do to be meaningful and make a difference. It is critical to find ways to bring this home for employees. People also feel strongly about working for an inclusive company that shows in tangible ways that diversity is truly important.
Call to Action For 2023 – Understand your people and learn what is working and not working for them. Perform regular surveys (formal and informal) of current employees. Find out why people are leaving and why they choose to stay. Exit interviews are important but that information is like looking in the rearview mirror. Stay interviews will give you real-time information. Leading an organization without empirical data from your employees is like flying a plane with no instruments. There are numerous tools on the market. Make sure you are consistently checking to be sure your culture is consistent with your stated values and as a company, you are “walking the talk” in order to keep your people engaged.
The renegotiation is a process, not a result. You will need to hone your value proposition and adopt changes to improve retention. Incorporating all these factors into your planning will be critical for recruiting and retention in this new reality.
Sources for this article are anecdotal and attributed to the following sources:
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