Josh Bersin is the president and founder of Bersin & Associates, a leading industry research and advisory firm, and longtime voice in HR topics. Views are the author's own.
The paradox of recruitment challenges persisting — and indeed worsening — during a period of stagnating market growth has never been more evident than today. Despite grim global economic predictions and the soaring cost of living, all kinds of employers are finding it harder than ever to attract and hold on to the right talent. As quickly as they are bringing new hires through the front door, disillusioned and disengaged employees are slinking off out the back.
For some it’s because they are burnt out, still ill from COVID-19, determined to reset their work-life balance, retire early, or start fresh somewhere new and less expensive. For others, the salary gap is the issue they can no longer ignore. The rising costs of energy, fuel, groceries, mortgages, rent and just about everything else means they can no longer accept a pay scale that seems to be tipped the wrong way in the context of rampant inflation.
Whatever the reasons, where in “normal conditions” the average staff turnover each year is 20%, today it’s running at 30%, which suggests that something is very wrong. Even those who stay, for fear of being without an income as the threat of recession looms, are “coasting” more than usual, biding their time until they can find something better suited to their needs and priorities.
Become the company you want to work for
The upshot is that organizations have never had to try harder to be the place that people want to be, and where they want to and can give their best. The place where people feel seen and heard, valued, looked after, invested in. Somewhere they can thrive and have a bright future that aligns with who they are and the life that they want for themselves.
This is very evident from our research, which confirms that three things matter above all else at the moment when it comes to recruitment:
No. 1: The organization’s brand and value proposition as an employer
Sometimes referred to as “the deal,” this is about what a company is really like on the inside and how it feels to work there every day. While this includes the remuneration package, it’s just as much about who the boss is, how people are treated and what the culture is like. How flexible are the hours, days and location? What are the prospects for career development? Does this feel like a “good company” in terms of its purpose and impact on the world? Is it one that occupies a strong space in a thriving market?
It's particularly important here that everyday practice measures up to a company’s words. Employee feedback platforms like Glassdoor and word of mouth across social networks mean that where a company’s mission statement is little more than lip service, the truth will get out. If people are stressed out working there or don’t get a fair deal, word will get around. And, since a business or public service is only as good as those who work there, things will only spiral one way unless someone new comes in and makes a change.
Our deep dives into this trend reveal that companies with the best retention rates pay more, offer greater flexibility, and generally go the extra mile to look after employees by treating them as individuals and offering them a fair deal and a bright future.
There’s a strong business case for investing in the employee value proposition (EVP) as a company, too. We’ve found that when the EVP is strong, a business is five times more likely to exceed financial targets; six times more likely to delight customers, and seven times more likely to innovate effectively.
No. 2: Internal Mobility
For all of the reasons already mentioned, recruitment challenges are becoming ever more onerous. This is especially ironic given that there are typically so many disenchanted people elsewhere who feel they are stuck, earn too little and have scant career prospects where they are.
It isn’t even that individual companies are losing out when they “leak” talent they’ve invested in, yet struggle to hire in other parts of the organization. Some of these losses are to the industry sector as a whole. Recent studies by Pew Research and McKinsey suggest that a staggering 40% of employees leaving their jobs are making a complete career change. The trend is visible to anyone paying attention: consider all the medical, teaching, and travel industry experience lost following the pandemic. Widespread disruption has driven some of the most committed and hard-working professionals out of their roles due to stress, ill-thought-out crisis management strategies, and questionable treatment of valued employees.
Solutions to this problem involve HR leaders being more creative in their internal mobility strategies and integrating these approaches with recruitment initiatives designed to fill more skilled positions elsewhere in the company. This dual approach offers a chance to simultaneously create career paths and manage succession. Digital platforms, meanwhile, can help by enabling smart matchmaking, connecting promising employees from one part of an organization with new opportunities internally via a path that might be lateral rather than straight and vertical.
Our findings show that when companies encourage a culture of movement and growth, they are nearly four times more likely to see innovation rise, for example, and almost five times more likely to be dubbed a “great place to work.”
No. 3: The candidate experience
On the one hand, the recruitment process has evolved over the last 10-20 years to be very sophisticated. Recruitment makes good use of technology to do a lot of the heavy-lifting while harnessing the latest personality profiling techniques and test formats to screen potential applicants.
Yet something has been lost in the process. In many cases, contracted recruiters have become too removed from the cultures of the companies they represent, and mismatched needs or poor management of expectations (on both sides) has too often led to recruits failing to last in their new roles — an expensive and frustrating waste of everyone’s time and resources.
There are two obvious things that need to change. One is that there needs to be a closer and more organic alignment between recruitment teams and the senior management team. This model creates a better chance of seeking out and hiring people who are going to be a good fit and thrive in a company (because of a shared set of values, expectations, ambitions and so on).
The second change is that it needs to be much easier to vet and onboard new people. The lead time from advertisement of a role to its fulfillment can be several months, due to interview panels, tests, etc., which is untenable for in-demand roles.
To attract good candidates and fill roles quickly and optimally, companies need to be smarter and faster in their recruitment process. That could mean drawing on the latest digital aids such as interview intelligence applications. Recruitment is a human-centered domain, however, and if technology gets in the way or distances the recruiter from the candidates or the employer, something has gone awry.
In our latest HR best-practice modeling, those organizations identified as being at Level 4 state of maturity were those that are particularly strategic and highly skilled at recruitment. For these employers, recruiters are much more than salespeople or headhunters working through a Rolodex of contacts; they enable a company to better itself.
Invest in growth: your future depends on it
While it might seem counterintuitive to invest in HR, and recruitment specifically, in the current economic climate, the case for ensuring organizations are in their strongest shape and are tangibly looking out for their employees has never been more urgent.
Take care of your people and give them a safe haven and a promising future during times of great stress and they’ll do so much more for you when a new period of growth, opportunity and job choice returns.