Great Resignation or Great Reshuffle?

It’s the most competitive job market in recent history. A true testament to the height of the bull market, it’s a terrible time to be adding new roles or backfilling for existing ones. Employers are squeezed. While most aspects of this market are expectations for compensation and benefits pushed to their extremes, there are also some clear outlying factors we have not seen before. 

According to a recent McKinsey & Company survey, there are three major conditions that make this job market especially challenging for employers: 

• Employees are leaving their jobs in record numbers: November 2021 followed by December 2021 set records
• There are more job opportunities than new hires by almost 2x
• 44% of employees who voluntarily left their jobs said they will not return to traditional employment for at least the next 6 months

If hiring and retention feels extra challenging right now, you don’t need to feel like you are failing as an organization. It’s not just you, the market has changed. How you react (and the speed at which you react) will set up success for the next few months and beyond, as the market continues to change unpredictably.  even any unpredictable market changes.

It’s different this time around

Normally, employees leave jobs when the job market is increasingly competitive. That’s not surprising. What is fundamentally different this time is that employees are leaving their jobs in droves, but they are not immediately starting new ones. Instead, they are temporarily leaving the job market and taking time to consider what they want out of their next job. As an employer, you are not losing your employees to another company, you are losing them to burnout.

To increase retention in this challenging market, the most important factors to consider are:

1. Lead by example. Leadership at all levels of the organization needs to set a clear tone and show they care. This might sound like a significant shift, but simply being empathetic and sharing your personal experiences go a long way. We have all collectively endured the COVID-19 pandemic, and leaders can continue to acknowledge the ongoing challenges employees face and continue to set a tone for sharing. 
2. Set clear expectations. Employees want to perform and perform well. Set clear expectations as related to responsibility, decision making, and career advancement. If you don’t have formal processes for all of the above, work to add them. 
3. Focus on career development. If you want employees to stay, you are going to need to dangle the carrot. With turnover rates increasing, it’s difficult to invest more in each employee. However, the price of not doing so outweighs the cost of ensuring your employees have what they need to grow and succeed. The short-term investment will go a long way towards addressing long-term issues related to growth and retention. 

As a leader of a growth stage start-up, burnout is something I fear. My learning is that individuals will show it in very different ways. I continue to try new approaches to help. Losing top talent will weaken any company. I have personally struggled with it in the past as well and at Lively. What I have realized from my personal experience, and the collective employee experience at Lively, is that leaders need to do more for their team. As an executive team, we are now actively testing strategies to limit burnout at Lively. While I don’t have an answer to fully address this issue, I am acutely aware this must be a top focus for any successful organization. 

There is some good news here, with the right strategy (and benefits offering), you can stand out and position your company as the place that gets it. In that way, you are only competing against yourself. Take advantage of the opportunity to stand out.

How to close employees and fill open roles

Recent research shows that employers are taking a 6-month break from the job market. They are on the sidelines, which means recruiting must not be a passive experience. Qualified prospects will not be flocking to your website. Go where they are. Share your story. Share your successes. Share your company values. And most importantly, be authentic. Candidates will be attracted to your values as equally as they will be to your company’s successes. Everyone wants to fit in, and while your company won’t be the right fit for all prospects the more you share the more informed they will be. Schedule a meeting with your marketing team to outline strategies about how you can better tell your story and values and then go out and find prospective candidates. This approach will not only increase your prospective pipeline but also fill it with candidates that align with who your company wants to be and achieve.

With that in mind, the final cherry on top is flexibility. Employers are moving away from stringent and stodgy organizations. Remote work is not the choice of many C-level executives, but is now table stakes in this job market. It’s unlikely it will shift back. Even if your organization can’t consider a remote work policy, adding some level of flexibility will increase your candidate close rates. Find your way to stand out.

It’s a brave new world when it comes to hiring and retention. If you are feeling discouraged and like your organization is stuck, you are not alone. Reviewing and rethinking your approach to your recruiting process and workplace culture is the next step. Showing the individuality of your organization will pay dividends today and for years to come. It’s time for executives and benefits managers to rethink tired approaches. Showcase your core values to engage candidates that are currently “off-market” so that in 12 months, you don’t have to do it all over again.

Shobin Uralil is the COO and Co-Founder of Lively.

Disclaimer: the content presented in this article is for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.