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Instead of merely ratcheting up pay and perpetuating wage inflation to attract and retain talent, future-focused leaders build culture and programs that reflect what their employees need and want, creating great places to work.
These leaders know that employees join and stay in organizations for an array of reasons: purpose and meaning of work, interaction with co-workers and leaders, health and savings benefits, flexible work arrangements, career and skill growth, culture and values, to name a few.
Pay remains an essential component of the employment value proposition for virtually all workers. A July Willis Towers Watson study reports employers are planning larger pay raises for 2022 than in many years. Yet despite added pressure, a September survey shows only 30% of employers further revising salary increase budgets upward from original projections.
Net talent gainers look at the entire picture, maintaining a strong focus on cultural elements and supporting people programs.
Net talent gainers (organizations that hire more employees than they lose during the Great Resignation and other tight labor markets) look at the entire picture, maintaining a strong focus on cultural elements and supporting people programs. Data suggest organizations with transformative employee experiences are far more likely to report lower turnover, with key actions around creating differentiated culture, values and purpose.
Future-seeking leaders understand that fighting wage inflation while attracting and retaining employees requires action on multiple fronts:
01
Future-seeking leaders understand the demographic “perfect storm” of current labor markets: reduced talent availability for leaders and entry-level employees. The problem will not soon self-correct; labor economists anticipate underlying workforce shortages to continue at least until 2030. Future-seeking leaders build culture, purpose and people programs around these demographic shifts, as well as changing work preferences and habits that accelerated during the pandemic.
02
Research shows that rather than simply increasing spending, 72% of companies are updating pay and benefits programs to address multiple challenges. Net talent gainers ensure that pay is purpose-driven, performance-based and fair. They modernize and personalize health benefits. They recognize savings and retirement are a top priority of employees to strengthen security in uncertain environments.
03
Many employees do not consider the costs of changing jobs before accepting them and that they are starting from scratch in a new organization: from developing relationships with managers and co-workers to navigating the structure to restarting benefit programs. Departing employees often leave savings and retirement plan balances on the table, as well as unused PTO/vacation/leave time, seniority, shift schedule priority, partial year-end bonuses and long-term incentives. Additionally, they leave behind valuable social capital (who they know and the established relationships that allow them to function effectively), which needs to be painstakingly rebuilt. Future-seeking leaders help employees understand both financial and social switching costs.
04
“Boomerang” employees leave an organization voluntarily, then return months or years later. Boomerangs are on the rise, with employers anecdotally reporting hundreds of former employees returning “home” after realizing what they had. Future-seeking leaders keep in close touch with departing employees, maintaining positive relationships, making clear the door is open for them to return if positions are available, and welcoming them back (assuming they left on good terms). They also encourage returning employees to share their experiences with co-workers regarding why they returned as well as their views on the attributes of the organization that may be less visible to others. Such conversations underscore positive culture and programs and help employees see the full picture.
05
Future-focused leaders create diverse and inclusive environments where employees are seen and respected with dignity. Over 70% of surveyed leaders report broader emphasis on DEI for both attraction and retention, with 90% expecting actions to become permanent. Research reports cultures of dignity translate to gains on key metrics, including the ability to attract and retain talent. Engagement remains highest when high levels of workplace dignity support company purpose and elevate culture, programs and employee experience. Workplace dignity starts at the top and is essential to healthy company culture. Leaders learned during the pandemic that fairness does not mean sameness, and that employees want to be seen, heard and understood.
06
Future-focused leaders offer skill and career development opportunities for existing and new colleagues as a differentiator. These include internal programs focused on skill enhancement and career planning, as well as external partnerships focused on reskilling and upskilling. Research suggests employees value development opportunities and work experiences that allow them to build new skills and remain relevant. Net talent gainers establish and support mentoring and sponsorship programs geared towards specific high potential and at-risk employee groups, as well as flexible career paths that meet employees where they are and support where they want to go.
Future-seeking leaders know that pay, while critical to employees, is only one part of the increasingly complex employment and economic puzzle.
A version of this article originally appeared on Forbes.com on November 29, 2021.
