Four Focus Areas for Businesses Navigating Labor Volatility
By Gina Hartigan, Chief People Officer, Kantata
The Greek philosopher Heraclitus teaches us that “there is nothing permanent except change.” The businesses that build pathways to long-term success understand and embrace this – change is the fabric of how we operate a business now. But even for the most change-enabled companies, the level of volatility many of us have experienced, especially since 2020, can be daunting.
This is especially true when it comes to labor, where many businesses have experienced whiplash moving from the Great Resignation in 2021 to fears of potential recession and headlines about layoffs in 2022 and 2023. The impacts of this labor volatility are observable and material – in their Top 10 Predictions for 2023 and Beyond, Gartner predicts that, by 2025, 40% of businesses will experience a loss as they struggle with ensuring consistency and stability in their operations amidst labor volatility.
At a recent LinkedIn Live session, “Prioritizing Employee Experience Amidst Labor Volatility”, that was hosted by my colleague Banoo Behboodi, Kantata’s VP of Advisory Services, I was asked about some of the ways businesses can overcome their gaps surrounding hiring and retaining talent. This is something I think about constantly in my role, so I wanted to share my thoughts on four key focus areas for businesses that are navigating labor volatility, which can be split between attracting new talent and fully engage existing talent.
The following is just one of many topics we covered in the LinkedInLive session – click here to watch the entire session recording.
Attracting Top Talent to Your Organization
These are crazy and unprecedented times. Business professionals are staring a potential recession in the face as many large organizations have done very large and visible layoffs. The combination of hiring freezes and a dramatic labor shortage has led to 5 million more openings than there are people available for those positions.
Professional services organizations depend on external talent, but they need to overcome specific hiring challenges to succeed. During the LinkedIn Live session, Banoo asked me what businesses can do to overcome challenges like hiring, skills gaps, and being forced to do more with less.
1. Get More People Into Your Recruitment Funnel
In my experience, professional services businesses need to broaden the top of the recruitment funnel to get more people in their talent pool. First, businesses should remove unnecessary “requirements” for hiring and instead consider evaluating candidates based on behavioral competencies and skills rather than on a certain number of years of experience or on educational credentials. When evaluating a candidate, focus on both relevant skills and adjacent skills related to what the role requires, which can help a candidate easily move into the role and continue to grow as an important part of the organization.
As part of broadening the top of that hiring funnel, hiring managers should also consider non-traditional talent pools for open positions, particularly people who left the full-time workforce in recent years but are considering coming back – returning moms, retirees, part-time employees, and gig workers. This idea of “returnships” (like internships for those making a return to the workforce) really excites me, because while these candidates may seem like odd fits for your company if you are only considering traditional full-time employees with a long, unbroken career timeline, opening your business up to these non-traditional hires can bring a wealth of experience and diversity that has the potential to unlock needed outcomes for your organization.
2. Get More People Interested in Building a Career With Your Organization
Once potential hires are in your funnel, the question becomes how you get people to choose to work with your organization? We all know that rising wages are here to stay, so companies need to double down on non-monetary aspects of the employee experience in order to remain competitive.
These focus areas include wellness investments, time off policies, learning & development initiatives and experiences, the availability of a flexible or hybrid workforce model, and more, all of which support life needs outside of wages. These are the kinds of factors employers should consider – and that candidates are considering – when it comes to making your business the kind of attractive workplace candidates will select.
Engage Your Existing Talent
While it is always worth investing in optimizing your hiring processes and practices, it must be acknowledged that many business leaders today are facing scenarios where new positions are being put on hold and teams are being asked to do more with less. This isn’t necessarily new – should we buy talent or build talent is an age-old HR question – and yet, in the midst of a volatile economy, a focus on employee retention and career development becomes that much more important.
3. Invest in Upskilling Your Teams
In order to avoid persistent attrition and “quiet quitting” and ensure that every team member feels motivated and engaged. businesses need to invest in a learning culture that is committed to upskilling and employee growth. With fewer people available to fill positions, we need each and every one of those individuals to be equipped and capable of doing their work effectively. There has been a dramatic shift in the skills needed to successfully do work – skill sets for jobs have changed by 25% since 2015, and that change is expected to double by 2027.
Skill building is a great way to close the gaps that emerge as skill needs change, and it has distinct advantages over hiring or contracting – four in five learning and development professionals agree that internal hires are less expensive because they have lower sourcing costs, take less time to onboard, and they will stay at your company twice as long as an external hire. Employers that want to create a capable workforce should turn to talent development and growth as a mechanism for driving positive change.
This doesn’t just apply to individual contributors; leader development is just as, if not more, important. Managers represent the single largest factor in employee satisfaction because their roles enable flexibility, create equity, and prioritize balance in the lives of each employee they manage. Issues that affect managers are likely to trickle down into the rest of the team.
4. Increase Internal Talent Mobility
Research shows that two out of three workers have quit a job at some point in their careers because of a lack of career growth, but 90% would have stayed if they saw opportunities ahead. Ensuring it is clear to employees that these opportunities exist is not just about skills development. It also requires a commitment to a culture that is open to, and enacts, internal mobility.
People development is about giving each worker a sense of traction, progress, and hope when it comes to their current and future career options. So much of this boils down to engagement – do you Communicate with, Celebrate, and Connect employees (the three C’s) in such a way that they feel as if they will have the ability to change careers without changing companies? Do the conversations managers are having with their reports involve the essential question “How can I help you grow not just in this role but in the business?”
It is also important to create clear and visible career paths or career lattices that employees can use to help them understand where they have the potential to move within your business, and how these options align with their skills and career trajectory.
Communicate that mobility is possible with your team members, celebrate career progression within your company, and connect your employees with each other to create a network of career support and opportunity.
Optimize Now and Continue To Succeed
In this time of economic uncertainty, it’s critical to take steps that strengthen your business so that you’re in your best shape to weather potentially unstable markets. Watch the “Prioritizing Employee Experience Amidst Labor Volatility” session now to learn more about what to prioritize as you grow and retain your workforce, and be sure to sign up for more LinkedIn Lives from Kantata in the coming weeks.