Gone are the days when young graduates were happy to get any job offer, when up and coming employees with 3-5 years of experience were willing to work 100 hours a week to hold onto a job, and when experienced talent could be expected to stay with a firm for life.
For decades, with Baby Boomers retiring and Millennials and Gen Zs demanding a more fulfilling career path and work-life balance, it has been a workers’ rather than an employers’ market. People are now expected to change companies and even careers when they no longer feel challenged, and headhunters poach the best talent for exciting new companies.
This means that it is increasingly difficult for employers to win the talent that they need in a competitive hiring market, and then hold on to the talent that they have invested in developing.
According to a 2021 McKinsey report, 40% of employees in the US, UK, Canada, Australia, and Singapore consider themselves likely to leave their current job in 2022. The same report shows that more than 50% of employers are experiencing a higher level of voluntary turnover than even five years ago.
So, what can businesses do to attract and retain?
How Do Businesses Retain Talent?
According to the CIO leadership publication, retaining talent starts with recruitment by identifying people who are likely to stay the course. After this they suggest:
- Providing professional development opportunities and a clear promotion path
- Providing remote working options
- Offering competitive compensation
- Considering the person rather than the worker and offering what they need (e.g. childcare)
- Improving communication with workers
- Using AI to predict employee turnover
While none of this is terrible advice, it kind of misses the point when it comes to what the new generation of workers is looking for.
The Autonomous Generation
The above recommendations for how to retain talent meets the needs of making talent feel valued and financially secure. While this is important, it overlooks one of the things most prized by the new generation of workers: autonomy.
Surveys of current MBA students suggest that they no longer want to work for the big-name global companies such as McKinsey or Google. The vast majority plan on launching their own businesses. The data also suggests that Millennials rarely stay in a job for more than 3 years, and that they are significantly more likely to work for themselves that previous generations.
It is easy to dismiss this as the narcissism of the Millennial generation who can’t abide taking orders from anyone else. But the phenomenon is more complicated than that.
What Millennials are really looking for is autonomy. They want to build their lives around what is important to them, rather than having their work-life balance, routine, and even where they need to live dictated by their employer.
They also want to see that the work they put in is reflected in what comes out. This doesn’t just mean appropriate compensation in the form of overtime and bonuses. It means credit and recognition for their contribution and ownership of personal successes.
They also want to control how their career develops. Rather than being pushed down a funnel from team member, to manager, to senior manager, many want to pursue creative endeavors and niche specializations rather than simply become responsible for other people.
When employers understand these priorities, then they can start developing genuine ways to attract and retain talent. Because as well as offering the autonomy that workers desire, they can mix this with the perks of working for a big company, such as financial security, great paid holidays, access to opportunities, and infrastructural support.
Why Remote Working isn’t Enough
While many businesses are starting to address the question of autonomy by offering more remote working opportunities, this is only the tip of the iceberg. For many, remote working looks a lot like working in the office in terms of the hours you need to be in front of your computer and the (remote) meetings you need to participate in.
If you are sitting in your home office from 9-5 every day, the only real differences that many workers may experience is slower Wi-Fi, fewer chances to socialize with colleagues, being looked over for opportunities in favor of colleagues in the office, and being constantly distracted by friends and family, since you are “at home”.
To really attract and retain talent with remote working, companies need to offer more autonomy. Employees shouldn’t just be able to choose where they work, but also when.
While, in theory, if you have a 100% remote job, you could do your job from anywhere in the world. But in reality, if you have established office hours, someone who works for a UK company won’t be able to work from South East Asia, as the time difference will mean that they are working the graveyard shift every day. This is not great for the work-life balance, and would be unsustainable for anyone with children.
Also, many people who need to do creative or detailed work, such as designing or programming, don’t do their best work during standard office ours. Many prefer to wake up early and produce while their brain is fresh, or start late and work into the quiet of the night.
Requiring that these workers be online and available during standard office hours means that employers miss the best of these workers, and that they are likely to become dissatisfied and leave.
A better approach for businesses would be to let workers choose when they work, and make their contract based on deliverables rather than hours clocked. This would give workers genuine autonomy when it comes to planning what their lives look like.
Making contracts based on deliverables rather than hours also meets the need of autonomous workers for their effort to be reflected in output.
But isn’t that just ‘Freelancing’?
No, this type of company setup would not be the same as hiring freelancers. The expectations that employers have of employees are very different. Employers can expect these employees to buy into the company culture and make the mission of the company their priority, alongside their personal professional goals.
And employers can offer these workers things of value that are challenging to establish as a freelancer or an entrepreneur. Chief among these is financial security, with a paycheque coming in even when work is slow. Companies are also required to offer paid holidays, which are very hard to come by when you work for yourself.
And these are just the most obvious perks that come with working for a big company. There is HR support for challenging work relationships, and access to systems and software that big companies can afford but individuals can’t. There is increased access to opportunities, improved networking, and much more.
But companies need to ensure that these offerings also support autonomy. For example, while many companies buy into major online learning resources, which are great, this should not be the limit of their professional development program. They need a flexible approach that looks at the individual.
Companies also need to show this kind of flexibility when it comes to the career path. Not everyone aspires to be a manager. Companies should be willing to create new posts that make the most of employee talents and allow them to focus their efforts. They should also consider implementing things such as 20% time, where employees can work on anything they like, as long as it is for the benefit of the company. This allows workers to focus on and develop the elements of their career that are of interest to them, in a way that develops the company.
Investing in talent in this way means that companies are more likely to retain staff, as they feel like they have space to grow as an autonomous individual within the company.
These are just some thoughts on how companies can attract and retain talent, very much from the perspective of a digital nomad. There are many other approaches and opportunities, but companies will only take advantage of them when they take the time to understand what the next generation of workers is looking for.
Easy solutions such as share options and the ability to work from home just won’t cut it when what the next generation of workers really wants is autonomy, self-determination, and to feel like they are doing something that is of value to the world.