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Leading Off
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At about this time in 2021, when Leading Off last covered talent management, the great exodus of employees from the workplace had just begun. A year later, as we settle into the new normal, it’s time to check in on how leaders are handling talent challenges—which continue to be severe. Are you able to keep people from leaving? Are you addressing the underlying workplace issues? This week, let’s explore the current state of play in the talent game and how some emerging trends may reshape it in the coming years.
Image of a brown egg balanced on two forks
Adopt an entirely new set of tactics
The so-called Great Resignation could last for several more years as people continue to reevaluate their personal and professional lives after the pandemic. Unlike previous cycles of downturn and recovery, this attrition is marked by many people leaving their employers without another job in hand or quitting the workforce entirely. Some who quit return but do so only if they’re assured of flexibility, adequate pay, and a sustainable workload. Employees want to be valued as whole people, not just workers; they expect employers to provide a strong company culture, a sense of community, caring coworkers, and career mobility—and may not stick around if those needs aren’t met. Leaders may need to revamp their talent strategies altogether, rethinking compensation and benefits and factoring in other employee needs such as mental and physical well-being, psychological safety, and scheduling and staffing flexibility.
That’s the number of additional tech specialists Germany will need by 2026 to meet the economy’s demand. Companies worldwide face an acute shortfall of tech talent at a time when being technologically strong is critical to success in a digital world. Traditional hiring or outsourcing won’t cut it; leaders must tackle the issue by adopting a multifaceted approach, such as setting up a focused team to manage the whole candidate experience, providing advanced planning and development tools, and creating an environment where developers and engineers are treated as innovators and active participants in the business.
“We regularly confuse people with roles and confuse talent with broad skill pools. In many organizations, roles today bear no resemblance to what they’d look like if you were designing them from scratch.”
That’s McKinsey’s Bill Schaninger in this podcast on the importance of getting the right people into the roles most likely to deliver value. Only a few roles are truly critical to the organization, and “everything else probably sits in a skill pool, a clustering of common skills deployed in different ways,” says Schaninger. Deriving maximum value from those skills may mean reshuffling talent, whether that involves hiring new employees or moving incumbents into jobs that are better aligned with their skills and aspirations. To fill roles so that they yield tangible returns, first evaluate the candidates’ fit, advises McKinsey’s Bryan Hancock. “Figure out exactly what you need new folks to do and assess against it,” he says. “If the incumbent is great, great. If not, you’re going to realize it in six months or 18 months or 24 months. A better fit drives better returns.”
Illustration of human-shaped cutouts arrayed in an internal network
Companies tend to overlook in-house employees for promotions or filling open roles, often because of a perceived skills gap. But matching internal workers with available jobs offers organizations “the ability to move talent dynamically,” says McKinsey’s Emily Field in this podcast on creating an internal talent marketplace. A digitally enabled talent marketplace offers visibility into your organization’s labor supply, identifying people’s skills and willingness to take on new opportunities. Rather than trying to fit candidates into rigidly defined roles, leaders can use AI-generated data to find alternative or adjacent skills that are a close match. “From a societal-impact perspective, employers are helping their employees create the skills to thrive in a new part of the organization, instead of the alternative—watching them exit,” says Field.
Image of three colleagues at an office celebration
Make that Wednesday for most companies that offer a hybrid work schedule. Wednesday is the day workers are most likely to be in the office—if they go into the office at all. As companies try to woo employees back to their cubicles, they’re experimenting with ever-more-imaginative perks. At last count, these included live concerts, beer and wine tastings, pop-up snack stands, free food and T-shirts, and terrarium-making classes. A few companies have begun to offer commuting stipends to help ease the financial burden of trekking back to the office. And to supervise it all, some organizations are hiring chief happiness officers, mindfulness leaders, and vice presidents of employee success.
Lead with talent.
— Edited by Rama Ramaswami, a senior editor in McKinsey’s Stamford office
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