People are an organization’s most important asset. But recruiting and retaining top talent remains a persistent challenge for businesses in every field. The result: a global talent shortage.
Despite many job postings returning to pre-pandemic levels, a lack of skilled labor worldwide means that more than 85 million positions could go unfilled by 2030, costing organizations $8.5 trillion. Faced with looming shortages, corporate giants like JPMorgan Chase, Walmart and DuPont have established charters and talent-planning committees to help offset potential loss of human capital. As Harvard Business Review concludes in no uncertain terms, to stay competitive, your board needs a people committee as well.
Following more than a year of remote and at-home work, however, employees’ priorities, career goals and basic working rhythms have also fundamentally shifted, even as COVID-19 remains an ongoing concern, according to The Wall Street Journal. Even with the emergence of new committees designed to help enterprises adapt to an age of growing flex work and drive greater cultural accountability, these paradigm shifts raise pressing questions. For example: How can today’s boards effectively interface with and keep management focused on creating a sustained long-term talent advantage? And, for that matter, how can directors help identify better and more cost-effective ways to attract and hold on to tomorrow’s top performers? The answer to successfully attracting and retaining the workforce of the future lies in helping organizations embrace more forward-looking approaches to business strategy and governance.
It’s becoming critical for boards to do more than simply engage in annual talent review activities.
In effect, human capital has quickly shot to the top of a board’s priority list. Credit the pandemic and resulting socioeconomic changes that have quickly depleted this asset—which, like any other valuable corporate asset, must be managed well. Likewise, directors are increasingly recognizing the potential impact that they can have by working to better understand and assess the health of a company’s corporate culture. It’s becoming critical for boards to do more than simply engage in annual talent review activities, note executives at W.W. Grainger, a Fortune 500 industrial supply company with more than 3 million customers worldwide. Directors also need to make a regular habit of staying abreast of and putting talent- and workforce-related concerns first on their agenda.
“Forward-thinking organizations and boards purposefully make a point to think about people planning and help set the tone for tomorrow’s talent management strategies,” says Chris Zimmerman, senior analyst with market research firm FutureProof Strategies. “The workforce of the future will be radically different from that of today, as will the skills that employees need to succeed.”
It’s also important to maintain an international focus and to keep a diverse workforce’s needs in mind. For example, a hard-charging focus on productivity might not play as well in European nations, where they value work-life balance more than the U.S. You might think about focusing on working smarter, not harder, and being more productive while also prioritizing employee health and well-being and making a point to give them more time off to recharge.
Shaping Tomorrow’s Workforce Today
Competition to recruit and retain top talent is becoming increasingly fierce. More employees—especially younger generations—are motivated by corporate mission, individual recognition and opportunities to do good in their industry or a community than by a paycheck. At the same time, work-life balance, employee experience, and leadership and learning development have become the new top strategic priorities for HR leaders, according to surveys by Future Workplace. Boards should be aware of these concerns as they think about how to help drive workforce strategy in the coming months.
Topics like returning to the workplace, how much flexibility you plan to provide your staff, and even your base working model can now be sources of differentiation and competitive advantage. More than half of employees want to work remotely, over 80% don’t want to return to the office fulltime, and three quarters would quit their job if a role with increased remote work were offered by a competitor. Noting this, board oversight needs to include considering how a firm’s talent strategy is evolving, and its policies are changing, to remain competitive.
It’s important to keep a diverse workforce’s needs in mind. In other words, your work culture must also account for differences in international culture.
“Challenging as today’s labor shortages are, it’s just a hint of what’s coming as enterprises work to boost data literacy and proficiency with digital technologies,” says Tim Rosato, president of trend forecasters Silver Lion Group. “It’s vital to provide greater oversight surrounding workforce-related issues and think harder about talent recruitment and retention.”
Promoting Diversity, Equity and Inclusion
Future workforces will be the most diverse ever. As insight and inspiration can now come from anywhere, the importance of applying the lens of different backgrounds and perspectives to innovation as well as corporate culture and strategy cannot be overstated. Boards are advised to broaden their vision when helping companies integrate D&I initiatives across recruitment, development and advancement efforts. Boards should challenge themselves to ensure that their makeup incorporates more diverse constituents. Executive succession planning best practices also need to be reexamined to ensure that myriad groups present in the workforce are well represented and that diverse candidates are being considered for leadership roles.
Nurturing a Positive Corporate Culture
Remote-working employees often feel disconnected from their employer and their peers. To maintain a sense of teamwork and togetherness, it’s also important for boards to help organizations consider how to promote effective ways to collaborate. But productivity isn’t the only dimension to consider when shaping corporate culture. As managers often can’t be looking over workers’ shoulders, it’s critical to think about how to instill a sense of ownership, leadership and accountability in hires as well. Board directors can use tools such as employee engagement surveys, customer feedback, exit interviews and other sources of information to understand which HR and talent strategies are working—or spot worrying trends. Driving cultural accountability is among a people-planning committee’s most important responsibilities.
Transforming Organizations to Meet Tomorrow’s Challenges
“The pandemic has sparked a massive shift in strategic priorities in the workplace,” Fred Foulkes, faculty director of the Human Resource Policy Institute, recently told Human Resource Executive magazine. Taking this transition into account, and the growing need for corporate oversight and governance, it’s clear that boards’ strategic priorities should be evolving by several orders of magnitude as well.
Back in 2020, companies’ primary focus for workforce management efforts was around training tomorrow’s leaders. Today, top objectives are hinged to supporting workers’ mental health and well-being while also ensuring that all staffers enjoy a positive working experience. Successfully addressing these topics means having to remake corporate culture with more attention to employee-first thinking and initiatives.