To say that the pandemic has upended the global talent landscape is an understatement. In the early days of COVID-19, businesses scrambled to identify how to keep employees safe, where work would get done, and, in many cases, who was deemed an essential worker amid widespread restrictions. For their part, employees struggled to balance home and work responsibilities—while also dealing with the very real effects of a harrowing health crisis.
Today, we have yet to crush COVID-19, and talent issues remain a considerable challenge everywhere. But now that we are approximately 18 months into the pandemic, the world has been able to take stock of broader macrotrends and gained some perspective on what is needed to restore the status quo—or, rather, improve on it. Leaders should consider the following implications and what they mean for their organizations.
A critical trend is that global labor force participation has shrunk dramatically. The stresses of the past year have led workers to reconsider their value, with many choosing to sit out until higher pay or improved conditions are available. In the US, mid-career professionals are the driving force behind this dip, as many have had to provide care for their children or parents. Nevertheless, health fears have caused some late-career professionals to reconsider working. Further, government stimulus has disincentivized some low-wage earners from participating in today’s labor market.
Employers are grappling with a harsh reality: their current—or would-be—employees are dissatisfied. The result is that the demand for labor is outpacing the supply, with companies around the world needing to find novel ways to hire new talent and hold on to their current workforce. Compensation and flexibility remain the chief concerns for employees, and many have experienced a decrease in their well-being over the past year.
Raising salaries, expanding bonus pools, and offering flexible arrangements are a good starting point for many businesses looking to up their people investments, but companies need to do more than this if they want to win the race for talent. Increasingly, employees are looking to work for organizations that share their values; inclusivity and climate-related concerns are now critical factors for most job seekers. More than half would rule out working for an organization that does not take environmental responsibility and diversity, equity, and inclusion (DEI) seriously.
But even companies that do offer DEI programs must recommit to building an inclusive and welcoming environment. Those that pay lip service or simply check the box on having these kinds of initiatives will fail to attract and retain the people they need to stay competitive in the years ahead.
Winning the war for talent means expanding the employee value proposition by offering financial incentives, work flexibility, social impact, and a strong culture. To stay competitive, companies must remain focused on what matters most to today’s talent pool. Regardless of circumstance, no company can afford to miss out on this investment.
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