Over the past three years, the global workforce has changed. The pandemic has changed the labor market – and now, billions of workers are affected by the highest inflation rate in generations. Job security is shrinking amid economic uncertainty – but the talent shortage shows no sign of abating.
While the height of the “Great Resignation” may have passed, the battle for talent is far from over. Job vacancy rates continue to rise above pre-covid levels in all sectors and companies are still struggling to attract and retain workers.
According to the latest Talent Trends data, two-fifths of organizations indicate that talent shortages are their biggest negative factor or pain point. If ever there was a time for leaders to make their talent strategy matter, it’s now.
Last week when the world’s business leaders gathered at the World Economic Forum in Davos, the talent shortage was unsurprisingly a major focus. One message emerges above: It is the responsibility of employers to rise and meet employee expectations if they want to attract and retain workers.
Businesses need to treat their talent the same way they treat their customers by finding ways to differentiate themselves. Randstad’s Workmonitor 2023 report found that employees want the full package of a safe, flexible, happy, inclusive and inspiring workplace.
Flexible yet stable work is the new frontier for workers
There is a big debate about whether macroeconomic uncertainty will lead to a reversal of the demand and expectations of workers accustomed to during the pandemic. Despite the reduction in job security, workers are unwilling to give up flexibility and work-life balance.
Last week at WEF, flexibility in work, including the future of working from home, was discussed at length. Rowing back on this key gain for workers would be a mistake. The reality is that this is now non-negotiable for many workers. Offering flexible work is a business necessity.
Employees are willing to leave their jobs if their expectations are not met. 42% of workers are ready to quit if their demands for better conditions are not met. A third would rather be unemployed than not work. Older workers especially value flexibility – and for many, it allows them to re-enter the labor market after the pandemic.
Workers want a sense of ownership and purpose at work
In addition to these practical demands, alignment of values and a sense of belonging are very important for workers. They want their employer’s values and goals to align with their own.
Much of this is fueled by Gen Z and Millennials who seek job satisfaction more than the pay check they provide. This means leaders need to think carefully about how to manage tomorrow’s talent agenda.
More than half of the workers in our study said they would quit their job if they felt they weren’t there, and this is especially true for Gen Z (61%). Two out of five people will not accept a job if it is not aligned with social and environmental priorities.
Support is a business differentiating factor
The rising cost of living is impacting and putting pressure on workers. Inflation is causing workers – especially younger ones – to take on new roles or increase hours at their current workplaces.
In addition to those looking for work or extra hours, the global economic outlook also means that many older workers are rethinking their retirement plans. This trend towards “unretirement” is one of the most marked swings in sentiment we have seen this year in our Workmonitor study. Last year, 61% thought they would retire before 65. Now, only half think this is possible.
Employee support is the new differentiator in the ongoing battle for talent. People increasingly expect their employers to help them through the cost-of-living crisis, whether it’s in the form of salaries, subsidies, or monthly pay raises.
Many employers are already doing this – only half of them say their company is helping them cope with the rising cost of living. Businesses that support their employees during tougher economic times will reap the rewards when the going gets tough.
The economic challenges we face have led to some of these ongoing trends – but companies must embrace these expectations if they want to create an engaged, engaged, and fulfilled workforce. By increasing, employers can help prevent talent shortages while creating a more content and productive workforce–which benefits everyone.
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