This article was originally published in Chief Executive.
Of the many concerns voiced by CEOs and board members, one is increasingly communicated loud and clear: Even as we fight mounting concerns about a recession, the battle for talent is dominating the corporate landscape.
Growing competition for talent is the biggest concern over the next year, according to recent surveys. The majority of CEOs polled in Chief Executive’s September Confidence Index said that labor costs and availability were the factors that would most influence their 2023 forecast and strategy—ahead of supply chains and consumer spending. Half of C-suite executive respondents to a PwC survey identified talent acquisition and retention as their biggest concern. This same worry topped the list of those queried just a few months prior.
It’s a talent market, with top talent having the upper hand. And as those surveys allude to, that trend is going to continue. And to make things even more complicated, retention of talent no longer means just keeping them in your company. Growing concerns about perceived insufficient employee engagement and commitment to the “day job” continue.
The pandemic and resulting shift to work from anywhere has allowed organizations far greater access to an expanded pool of talent. Where once employers were competing for talent solely with those collocated with office buildings, they’re now vying for the best minds globally. Some are even hoarding the best workers.
The challenge for leaders is obvious: How do you reaffirm or recommit to creating an organization and an environment that inspires employee loyalty with deeper levels of engagement? The solution may be less obvious. To meet the challenge, leaders may need to go to a place that’s uncomfortable initially—redefining what’s meant by company time.
The pandemic has made us much more comfortable challenging the idea that work is not a place, but something we do. The location aspect of work has now been challenged and stretched and modulated and redefined. CEOs have either become comfortable with this shift or are realizing they’ll need to be to compete more effectively. At many businesses, with institutional knowledge on the line, there’s the added pressure of having to revitalize the workforce.
What’s coming next may be less comfortable. While challenging the where of work is accepted practice, challenging when work gets done is not.
Some companies already have an inherent advantage in this evolution to rethink company time. One major indicator of organizations that have broken through or redefined work time are those that have no set number of vacation days. There’s little doubt that’s part of the formula for success for talent-friendly companies like Salesforce, which has ranked as a top company to work for 14 straight years.
Companies like this have a head start. There’s no question they still have boundaries – guardrails to ensure employees don’t abuse company assets, work for competitors, or put the company at risk for cybersecurity breaches. As a leader, you still have an obligation to protect your teams, your business, your shareholders and investors. But the initial trust or loyalty shown to talent is already evident at certain organizations that, even before the pandemic, were rethinking when work happens.
If the trend of the previous decade was that every business is a people business, or every business is a technology business, the trend going forward will be that every business must also be a healthcare business. That’s because part of your talent strategy must be about your talent’s well-being. A consideration of when work gets done is a nod toward that well-being. Enabling new degrees of autonomy and flexibility more apropos to the times affirms a more empowered approach.
Contrast that point of view with executives of a certain generation who still have a focus on command-and-control leadership. Those old school types who, even now, are roaming the office and doing the equivalent of bed checks on employees to make sure they’re at a certain place at what they deem is the right time. Does this approach help with productivity and a trusting culture in the modern workplace?
I sympathize with those still wedded in this leadership style. This pivot we’re making is so difficult, yet it’s so essential. That’s why I believe leaders need to approach the future with a two-pronged strategy. They need to:
• Assess their policies, practices and processes and revamp them to reflect the new work environment. They have to identify the forces systemically holding them back. And they’ve got to accomplish this with a group of diverse people who they want to retain and advance.
• Lead by example, thinking differently about how they may operate as a leader. To lead more inclusively, but also open the aperture of their managers about what is a thriving culture of the future. What type of culture will promote a rise in employee loyalty and engagement? What is a culture that will attract, retain and grow the best talent?
In a world where talent is key and competition is fierce, culture is the only sustainable competitive advantage organizations have. For too many of them, today’s culture is not the one that will win. Over time, one way or another, they’ll discover that the power of innovation, growth and performance is best found through the true empowerment of their people.