Tackling Workforce Velocity: Strategies for CEOs to Overcome the Challenge
In this article Joe Galvin, Chief Research Officer at Vistage, highlights the significance of stability, embracing change, hybrid working, employee development, and effective communication as essential components of talent retention strategies.
Given the current economic conditions, it also calls for business leaders to prioritise robust talent retention strategies to address skills shortages and cultivate a strong company culture.
As the UK continues to navigate through the aftermath of the COVID-19 pandemic, business leaders face significant challenges, including ongoing inflation and the looming possibility of a recession.
One area where they encounter hurdles is in devising strategies to enhance workforce’s talent and skills and improve their retention rates. This is as important now, when many companies are issuing layoffs and redundancies, as in times of high employment. It is important to remember that while addressing workforce velocity – the rate at which workers enter and exit organizations – can often indicate rapid growth, it can also escalate in cases of talent attrition or turnover, the latter of which applies to today’s market.
In spite of this and the economic slowdown experienced in the first half of 2023, UK employees remain confident in their ability to explore the job market for desirable employment arrangements. Employee turnover rates are expected to rise to 41% in 2023 with a predicted 35.6% turnover rate in the UK based on ONS’ estimates of future activities within the labour market. This poses a greater challenge for business leaders who must fill vacancies left by departing employees, affecting company culture and incurring costs associated with recruitment, salary negotiations, and training.
Job Market Transparency and Talent Retention
Another significant challenge derives from today’s interconnected world, giving workers the power to instantly showcase their skills whilst exploring job opportunities worldwide. With access to online platforms like Indeed or Glassdoor, today’s job seekers can find positions that better align with their expertise, preferences and values. While signalling a positive step forward, the increased need for transparency within the job market creates a more competitive environment for companies wishing to win the recruitment game.
Now, workers have the ability to access salary information even before engaging with prospective employers. This newfound transparency calls for a different approach to talent retention strategies; one that focuses on fostering satisfaction among existing employees, thereby reducing turnover rates and simultaneously attracting top talent.
The lingering effects of the pandemic have resulted in businesses grappling with staff and skills shortages, as well as profit concerns. While these have always been areas of focus, they have become more pronounced in the current economic landscape, emphasising the need to understand what motivates employees in their career choices and job searches.
Employees prioritise security, stability, and consistency in their professional environments. However, unforeseeable events like an impending UK recession, cost of living crisis, or political conflicts can impact their sense of security and stability. Business leaders shouldn’t shy away from pursuing change but should be aware of factors that can alter employees’ perceptions. By making necessary adjustments and fine-tuning processes, systems, and interpersonal approaches, businesses can effectively navigate these dynamics.
Embracing Stability and Hybrid Working
Creating a sense of stability can be achieved by providing workers with a clear sense of purpose and trajectory that motivates their career advancement. In the midst of economic uncertainty, where security, stability, and consistency are paramount, it’s crucial to strike a balance between embracing change and addressing the fundamental needs of individuals. By carefully navigating this delicate balance, businesses can foster an environment that embraces change while ensuring a sense of security and stability for their workforce.
Embracing hybrid working, which remains a popular choice among job seekers and current workers, can be a valuable asset for companies looking to combat turnovers and retain talent. With forthcoming legislative changes under the Employment Relations (Flexible Working) Bill, businesses should consider flexible working as a key aspect of their retention strategy to attract new talent and remain competitive in hiring practices.
Investing in Employee Development
Employee development is also a critical element in any talent retention strategy. It is essential for workers to feel supported in their long-term career growth, with clear goals and a sense of continuity in their role within the company. Training initiatives should be directed towards frontline managers, as their ability to support employees on a daily basis and in their long-term career objectives is paramount. Dissatisfaction often stems from poor communication or relationships with supervisors, which can contribute to burnout and anxiety.
While unemployment rate in the UK is set at 3.8%, as reported by latest ONS labour market figures, remaining close to its historic lowest numbers, business leaders must prioritise a robust talent retention strategy in preparation for the next cycle of growth. As workforce dynamics continue to accelerate, creating an environment that employees genuinely want to be a part of becomes increasingly crucial.
By Joe Galvin, Chief Research Officer at Vistage
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