We are here to tell you that now is not the time to panic. However, it is true that there is a lot going on in recruitment. Top talents are leaving companies to explore the open market in unprecedented numbers. In our latest report “Global Workforce of the Future 2022”, we surveyed over 30,000 people worldwide and found that more than a quarter (27%) of workers will quit their jobs in the next 12 months.
They are lured away from their existing jobs and are being promised salaries double or even triple their previous earnings. Lavish inaugural bonuses are no longer an exception. This has sparked the debate on the “Great Resignation” in recent years, and our research indicates that this trend is here to stay. However, quitting rates are only one piece of the puzzle. In our report (request here) you can find all the details about the high attrition of talents.
If we look at the subtle changes and success of other companies, we can see a strategic way forward. It would be easy to fling caution to the wind and join the competition for talent. It may be a consensus that a company struggling to fill key positions cannot afford to fall behind in the "war for talent".
Nonetheless, there are some ways to meet the new expectations of employees and retain them without your company running the risk of spending too much money.
Employee expectations have changed
There is no doubt that the pandemic has enforced many changes in the workplace – including the expectations that workers have of their companies. Organizations that have not adapted to these new expectations have fallen behind and experience massive turnover. The trends all indicate that workers and companies alike are pausing to assess the current state. Defining success and satisfaction in the workplace has nowadays become more important than ever when it comes to meeting employee expectations. Employers often correlate employee satisfaction with business results, such as employee retention or productivity, but employees are more than just numbers in a spreadsheet. When rethinking talent strategies and building resilient, motivated and engaged teams, our human pursuits must be taken into account.
If you want high-performing, valuable employees on your team, you need to make a trade-off between past policies and today’s expectations. Even Elon Musk got in trouble for demanding a 40-hour-plus presence in an email to his employees, even though there is a rising demand for flexibility in terms of time and place. Two lessons learned for companies from this: Remote work or hybrid flexibility are here to stay, and employees want to be more involved in operational decisions.
So how can you cope with this new labor market and remain competitive with your recruitment processes?
Whatever you do, do not panic and do not abandon your incorporated best practices.
Despite the current perceived talent shortage, it would be a mistake to hire hastily and pay too much without thoroughly screening candidates. If you want to pay the market price or even exceed it for a certain type of professional, you need to be sure that they will add value to your company. Overpaying for unproven talent is particularly risky in this current market as it can lead to costly attrition, which not only has an impact on the profits. However, by maintaining your hiring process, using assessments or seeking advice from talent experts, you can avoid the risk of overpaying and be confident in the people you add to your teams. Always remember to be flexible but don’t rush into decisions.
Is there anything other than money to attract top talents?
Even before the current hiring frenzy, surveys have repeatedly shown that money alone is not the most important criterion for top talents when choosing a company. While being offered higher salaries is driving some workers to leave their companies, our Global Future Workforce 2022 report indicates what workers value most. Salary still plays an important role, but companies need to address both, the financial as well as career and health concerns of their employees in order to attract and retain talents. Highly skilled workers want to be employed by companies that have a strong leadership culture and a psychologically safe working environment. They want to work for companies that share their values and invest in their future professional development. Other important aspects are more days off, a reasonable workload and a work-life balance. There are many ways to attract talent that go beyond a high salary. Right now is the opportunity to highlight – or improve – corporate culture.
Tie higher remuneration to performance.
Some of the world's largest companies offer higher remuneration overall but link higher salaries and bonuses to performance. A tiered salary or bonus system can ensure that when top salaries are paid, the company gets great value without paying too much up front. You can offer new hires the opportunity to evaluate salary and performance in three to six months, rather than in a year. Create a culture where new employees are encouraged to perform and can earn higher salaries and bonuses throughout the year. Financial rewards remain a strong motivator for satisfaction at work.
Prepare a plan to help new employees get off to a successful start after you hire them.
In previous recruitments, many companies have made the mistake of throwing new and unproven employees in at the deep end, expecting them to hit the ground running. Even in the very best-case scenario, new employees need support during the onboarding process in order to fully integrate into their new company. There should be regular check-ins and conversations to make sure they are getting everything they need to succeed. If you have been forced to adjust to market rates and pay a lot for a new employee, investing appropriately in onboarding and integration will not only get them up to speed faster, but also ensure you don't lose some of those employees in the first six months.
Don’t forget about your existing talents.
In 2022, 1Password, a Toronto-based password management company, announced it would offer its existing workforce a 7.5 percent cost-of-living offset and a restructured PTO program. The company’s message was clear: It does not want to lose employees to the "Great Resignation," even as it competes for new talents in an overheated market. Some advice, all employers should keep in mind. If you forget about your current workers and focus all your time and resources on attracting new talents, failure is inevitable. Whether it is about hiring new employees or taking care about the existing ones, it is not all about huge raises and bonuses. Offering additional, non-monetary benefits is resonating in today's talent market, especially with individuals seeking long-term employment.
Evaluate your hiring practices.
One thing is clear: companies need to move swiftly through the hiring process while maintaining the integrity of their search. Make sure you have identified the qualities of the talent you are looking for but be open to candidates who are not a perfect fit on paper. Make sure interviews and offer negotiations are completed expeditiously. You should also consider working with a recruiting firm to find the most qualified candidates for your positions and streamline the process.
What are long-term recruiting trends?
Current trends – many of them accelerated by the pandemic and beyond our control – have changed the rules of recruitment and hiring, forcing companies to adopt new practices to continue to compete in the “war for talent”.
Competition for the best talent and the best jobs remains fierce.
It has turned out that the dynamic labor market has not changed some of the basic rules of talent management. Rather, top talents and good jobs are still in high demand. Highly qualified candidates who find themselves in the open market are likely to have to choose between multiple job offers, increasing the pressure on companies to quickly identify preferred candidates and make them offers. Companies that wait too long will find they are too late to attract the best candidates.
Companies will be forced to use data driven resources.
Increasingly, companies that need to hire – and in some cases, outsize – need tools that allow them to dig much deeper into the available talent pool and quickly identify the right people for the right jobs based on hundreds of data sources tailored to their needs. Inbound recruiting methods have a fail rate of 80 to 90% and therefore typically don't lead to relevant candidates. When companies use LinkedIn to find talents, they spend a lot of time sifting through profiles and contacting people who may not be interested. It can take up to 45 days to find the right candidate. This is a lack of efficiency that wastes not only time but also money. That's why using a digital talent agent is essential to help companies make the best hiring decisions faster.
A glimpse into the future of hiring and recruiting.
Future-oriented companies should look beyond the current challenges and prepare for what lies ahead. Already now, there are more efficient and accurate ways to find and attract candidates that will enable recruiting teams to continue to staff positions quickly.
In addition to the Global Workforce of the Future 2022 report, we recently conducted and released a Compensation and Workforce Trends Survey. We interviewed more than 1,400 HR decision makers in the U.S. about how they are adjusting their hiring plans, workforce size and compensation plans for 2022. We were able to identify the following key trends:
- 69% of respondents say their company will offer bonuses this year, compared to 60.9% in 2020.
- 37% of decision makers expect post-pandemic salaries to be higher than for employees hired for the same positions and with the same skills prior to the pandemic.
- More than half of respondents from larger companies (500+ employees) say their company prioritizes diversity, equality and inclusion (53%).
- More than half of respondents (54%) say they provide training to their current employees within their company.
- 59% of respondents say their company has created a quicker interview process and make faster offers to meet current demand and competition for qualified workers.
This feedback from our customers and the trends we are noticing in hiring practices show that organizations are making significant adjustments to attract, retain and manage more resilient and diverse workers.
While headlines such as "27% of global workforce plan to quit in the next 12 months" point to a continuation of the Great Resignation, there are nuances behind it that paint a more complex picture. Despite the high sense of job security, employees are concerned about geopolitical unrest and the looming economic recession which are signs that the Great Resignation may be slowing.