Sector News

The Great Attrition is making hiring harder. Are you searching the right talent pools?

August 21, 2022
Borderless Leadership

It’s the quitting trend that just won’t quit. People are switching jobs and industries, moving from traditional to nontraditional roles, retiring early, or starting their own businesses. They are taking a time-out to tend to their personal lives or embarking on sabbaticals. The Great Attrition has become the Great Renegotiation.

Competition for talent remains fierce. For certain categories of workers, the barriers to switching employers have dropped dramatically. In the United States alone, there were 11.3 million open jobs at the end of May—up substantially from 9.3 million open jobs in April 2021.1 Even as employers scramble to fill these positions, the voluntary quit rate is 25 percent higher than prepandemic levels.2 At the current and projected pace of hiring, quitting, and job creation, openings likely won’t return to normal levels for some time.

What we are seeing is a fundamental mismatch between companies’ demand for talent and the number of workers willing to supply it. Employers continue to rely on traditional levers to attract and retain people, including compensation, titles, and advancement opportunities. Those factors are important, particularly for a large reservoir of workers we call “traditionalists.” However, the COVID-19 pandemic has led more and more people to reevaluate what they want from a job—and from life—which is creating a large pool of active and potential workers who are shunning the traditionalist path.

As a result, there is now a structural gap in the labor supply because there simply aren’t enough traditional employees to fill all the openings. Even when employers successfully woo these workers from rivals, they are just reshuffling talent and contributing to wage escalation while failing to solve the underlying structural imbalance.

To close the gap, employers should try to win back nontraditional workers. But how?

Our research identified distinct pools of workers with varied workplace priorities. Their differences show that employers have to take a multifaceted approach to attract and retain talent.

To better understand who might fill all the open jobs, we examined economic and labor statistics; conducted a large global survey to learn more about what is driving people to stay, leave, or return; and applied advanced analytics to define specific segments of the workforce, both active and latent (see sidebar, “About the research”).

Our analysis of workers in six countries focuses on which job attributes are motivating them, both positively and negatively. We asked survey participants in various phases of job churn why they left or would consider leaving and what would make them want to stay or come back. It turns out that many workers want more than the usual compensation and job advancement carrots.

To get at these priorities, we sorted respondents into smaller groups who shared the same set of primary needs that they want an employer to meet. Then we looked at whether these workers also shared demographic similarities. These groups of like-minded respondents became our “personas”—distinct pools of workers that employers can target in their search for talent. While most of these groups valued workplace flexibility highly, they differed in how they rated mental-health support, meaningful work, and career advancement.

These differences show that no single solution is going to attract enough people to fill all the job openings and retain a productive workforce. Instead, employers can take a multipronged approach to reach different talent pools. This doesn’t mean that organizations have to change their mission, values, or purpose. Rather, they can showcase different facets of their employee value proposition to a broader number of workers and get more creative in their offers to current and potential employees.

In this article, we take a closer look at five crucial employee personas that companies must understand to solve the attrition and attraction problem for the longer term. READ MORE

By Aaron De Smet, Bonnie Dowling, Bryan Hancock, and Bill Schaninger

Source: mckinsey.com

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