Between April and July 2021, a total of 15.5 million workers quit their jobs. This voluntary mass exodus from the workforce is likely to persist – if not accelerate. New research finds that 40% of employees say they are at least somewhat likely to quit in the next three to six months, while 18% say their intentions range from likely to almost certain. Over the past year, employees between 30 and 45 years old have had the greatest increase in resignation rates, with an average increase of more than 20%. The Great Resignation is real. Leaders who recognize this as an opportunity can build a stronger organization – one poised to thrive.
A 2008 survey of senior executives found that hiring high-performing employees from competitors was one of the most effective actions taken during the previous crisis and was the action that strengthened employee commitment more than any other action taken. Another study analyzed the strategy selection and corporate performance of 4,700 public companies before, during, and after the past three global recessions. The study found that organizations that employed long-term thinking performed better than those that did not.
Now is the opportunity to think and act strategically by taking steps to acquire high-performing talent, retain the right people, and align the organization. To be successful, leaders cannot take a business-as-usual approach, nor can they base their decisions on assumptions. Instead, leaders are going to need to take time to truly listen to their people and focus on understanding.
Acquire high-performing talent
Consider the skills and roles you need to move your organization forward. Consider the talent gaps that have held your organization back. Ask your team to do the same. Now is the opportunity to acquire the talent you need (and may not have previously been able to acquire) to accelerate your growth, performance, and profitability.
In an interview following the burst of the dot-com bubble, Jim Collins said, “Today, we’ve got the greatest opportunity that we are going to have for decades to snag a boatload — not a busload, but a boatload — of great people. And great companies always start with who, not what. We can finally get to the right side of Packard’s Law. Packard’s Law is like a law of physics for great companies. It says that no company can become or remain great if it allows its growth rate in revenues to exceed its growth in getting the right people in a sustainable way. It’s one of those timeless truths that transcend technology and economics. Now, instead of trying to accumulate capital, we can accumulate people.” He continued by offering this advice, “If I were running a company today, I would have one priority above all others: to acquire as many of the best people as I could. I’d put off everything else if I could afford it — buildings, new projects, R&D — to fill my bus. Because things are going to come back. My flywheel is going to start to turn. And the single biggest constraint on growth and the success of my organization isn’t markets, isn’t technology, isn’t opportunity, isn’t the stock market. If you want to be a great company, the single biggest limitation on your ability to grow is the ability to get and hang on to enough of the right people.”
Retain the right people
In a recent study by McKinsey, employers cited compensation, work-life balance, and poor physical and emotional health as reasons why their people had quit. By contrast, the top three factors employees cited as reasons for quitting were that they didn’t feel valued by their organizations (54%) or their managers (52%) or because they didn’t feel a sense of belonging at work (51%).
We recently conducted a survey and asked people to identify what steps their organization could take to retain talent. Respondents identified offering increased flexibility and investing in opportunities to support career development and growth as steps organizations can take to retain talent.
What actions are you taking to retain the right people? Have you asked your employees, or are you taking these actions based on assumptions?
Talk with your team, talk with those you do not want to lose, and ask them to share what actions your organization could take to retain them – and others.
At the same time, consider if there are changes that need to be made. When times are good, mediocre talent is often tolerated or goes unnoticed. However, when things get tough, the cost of having underperformers or toxic employees in key positions becomes obvious. Now is the time to get the right people on the bus (and the wrong people off the bus).
In Good to Great, Collins writes, “The executives who ignited the transformations from good to great did not first figure out where to drive the bus and then get people to take it there. No, they first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it. They said, in essence, ‘Look, I don’t really know where we should take this bus. But I know this much: If we get the right people on the bus, the right people in the right seats, and the wrong people off the bus, then we’ll figure out how to take it someplace great.’”
Align the organization
The McKinsey study is not alone in highlighting a disconnect between leaders and their organizations. Our research as well as research by Leadership IQ, Kotter, and Boyen have similarly identified that leaders have a different perception of how things are going and where things are going than their organization. This highlights a lack of alignment.
Looking ahead, teams will be reconfigured as people leave and join the organization; your strategy, how and where your organization works – are more than likely to continue to change. This will only serve to exacerbate the lack of alignment.
When an organization is aligned, there is a shared vision. An aligned organization has a shared understanding of purpose, and of the strategies, goals, and tactics that will make the organization successful. Organizational alignment energizes the organization, enables people to take action, and empowers people to work towards a shared goal. Further, when there is alignment, people not only have the autonomy to make decisions by themselves, but they also trust each other to make the right decisions.
Research accentuates the important connection between an aligned organization and an organization’s sustained performance. Aligned organizations grow faster, are more profitable, and perform better on indicators, including customer retention, customer satisfaction, leadership effectiveness, and employee engagement, than unaligned organizations.
Now is the time to invest in aligning your team and your organization.
The Path Forward
Leaders have the opportunity to build a stronger organization – one poised to thrive. This can be achieved by taking steps to acquire high-performing talent, retain the right people, and align the organization. However, to be successful, leaders need to take time to truly listen to their people and focus on understanding what people have experienced, what they are going through, and what expectations they have for the organization. This is the critical foundation to success.