 | Our best ideas, quick and curated | April 8, 2022 | | This week, we look at measures companies can take to keep employees from walking out the door. Plus, how organizations can get the Internet of Things right, and a McKinsey talent expert on why a 20-hour workweek isn’t as far-fetched as it sounds. | | | | | Gone for now, or gone for good? Workers are leaving companies faster than they can be replaced. Nearly half of the employees who voluntarily left the US workforce during the pandemic aren’t coming back on their own. In a recent McKinsey survey of almost 600 US workers who voluntarily left a job without another in hand, 44 percent said that they have little to no interest in returning to traditional jobs in the next six months. Most companies understand that they can’t just sit and wait for workers to reappear on their doorstep. Employers must go and get them. But how? | | A break with traditional roles. The first step is to understand that this recent wave of attrition is different. Instead of leaving for a similar but better job elsewhere, most workers are leaving to take on very different roles—or just leaving the workforce entirely. That push into nontraditional jobs or not working at all means compensation and benefits packages aren’t the sole answer. Instead, workers also want more flexibility, community, and an inclusive culture if they’re going to accept a full-time job at a traditional employer. | | Make some ‘sticky’ moves. To thrive in this new moment, companies must build “sticky” workplaces by listening to employees, anticipating and addressing their concerns, fostering psychological safety and a sense of community, and measuring outcomes. Organizations can ask people in the most critical roles how they are doing and what they need to continue to grow. They can introduce new types of scheduling, staffing, and hiring innovations—for instance, by allowing people to assemble their own teams for projects rather than assigning them to ready-made squads. Or they can let job candidates test out roles for a limited period. These moves might also attract nontraditional workers, including students, “boomerang” employees (those who return to a company after leaving), and others currently doing part-time work or leading their own start-ups. | | Retain your talent pool. Companies have to ask the right questions to understand how to retain their talent (something that HR leaders have always focused on but have done so intensively throughout the COVID-19 pandemic). A good people analytics function can round out the big picture with facts about individuals and cohorts. It can “separate the signal from the noise,” noted HR expert David Green in a recent McKinsey Talks Talent podcast. “It can help organizations understand if they actually have a problem with attrition and, if so, where, what job families, what locations? Is it people who have been tenured for a certain time? Is it certain groups?” From there, it’s easier to tailor solutions. | | The bottom line. Individuals may be looking for a certain range of pay when considering a job offer. But once that threshold has been met, cultural factors can make a company more attractive to join and, ideally, provide more incentive to stay. Focusing only on compensation or only on cultural factors won’t stem the tide of attrition—business leaders must pay constant attention to both. | | |  | | | | PODCAST | | The Internet of Things … and many more things | | In this episode of The McKinsey Podcast, partners Michael Chui and Mark Collins discuss the findings of McKinsey’s latest Internet of Things report, including how the IoT has spread far beyond the digital-enabled household. “Whether it’s in the factory, in healthcare, or in the automotive industry, we’re seeing more and more cases where real value is growing and being created,” said Chui. Still, the successful integration of IoT continues to elude some companies. Here’s how to get IoT right. | | | | | | MORE ON MCKINSEY.COM | | The five zeros reshaping retail | The margins for error in retailing are shrinking toward zero in five areas: shopping channels, customer assistance, delivery times, equity and sustainability, and talent. Here are ways retailers can innovate to meet customers where they are. | | Germany’s e-health transformation makes uneven progress | Our eHealth Monitor 2021 report shows solid uptakes of telemedicine and consumer health apps. But e-prescriptions, health data exchange, and patient use of electronic health records are lagging behind. | | Responsible product management: The critical tech challenge | In recent years, societal concerns about privacy, sustainability, and inclusion have increased. The cross-functional, lynchpin role of product managers makes them particularly well positioned to navigate these complex issues. | | | | | | | A lot of people are talking about moving to a four-day workweek, but I think it’s more revealing to talk about a 20-hour workweek. | | For people who want flexibility, 20 hours a week is a really manageable number. It’s particularly good for young people, who want a solid gig but also value the side hustle that helps them find their purpose. And it’s excellent for older people who have recently retired. A huge part of their social life may well have been tied up with work. They might like to continue collaborating with peers, colleagues, and friends. And the work benefits may be better than what they’d get as retirees. | | This should be a win–win. If a company could get access to loyal—not transactional—people who are excited to be at work, why wouldn’t it want that? | | However, most companies don’t want to deviate from what they consider “normal”—a five-day, 40-hour workweek. (Which in the US, at least, is an artificial creation enshrined by laws passed more than 80 years ago.) Employers think anything else would be too complicated. But if they really examined what their talent force looks like, they’d see it’s quite complex already, full of “full timers” with special arrangements, contractors deeply entwined with the company, freelancers who were once full-timers, and so on. | | Another big convention that most employers don’t want to alter is offering benefits only to people working a standard 40-hour week. But perhaps that’s shortsighted. By lowering the bar to 20-hour weeks, they probably create a more reliable workforce, full of people who know the company and its culture and who are committed to it, because the company is helping them have a happier, more flexible life. | | One outcome of the pandemic is that the employee–employer power dynamic has really shifted toward employees. Offering flexibility with benefits would go a long way to showing talent that employers are truly invested in you. Research clarifies that benefits are an even bigger “tie that binds” than hourly wages. | | Now, 20 hours isn’t some magical number. My beef with the five-day workweek is that it’s a norm from long ago that hasn’t been adjusted to reflect the way that work has evolved. Like many proposals for four-day workweeks, it’s a mandate handed down from on high. So, maybe 25 hours is right, or maybe 30—even though that seems too high to me. The point is that affording employees this kind of flexibility would be both an honest recognition of today’s talent market and a way for companies to build lasting loyalty from employees—at a time when loyalty to corporations is at a low. | | When it comes to having to go into an office every day of the week, the genie is out of the bottle. When we next hit a downturn in the economy, some employers will be tempted to think, “Now is our chance to get back to everyone in the office every day.” If that happens, you’ll see a bifurcation between those companies and more flexible firms. And I think those companies will be hurt because people no longer accept the idea that a company owns them. They think they deserve choice, and they’re not going to relinquish that easily. They’re going to get on social media and talk about their employers, and there’s going to be a cost to that. | | But companies that are less entrenched in tradition and that offer workers real flexibility are going to create a workplace that’s compelling. At those companies, people will enjoy the feeling of going into the office. | | I think there’s a good chance that within five years, employers offering 20-hour workweeks with benefits will become more of a norm. For the past two years-plus, employees have made their independence clearer than ever. It’s time for employers to acknowledge that reality and adjust their policies and expectations. | | — Edited by Barbara Tierney | | | Share this What We're Thinking |  |  |  | | | | | | BACKTALK | | Have feedback or other ideas? We’d love to hear from you. | | | | | Did you enjoy this newsletter? Forward it to colleagues and friends so they can subscribe too.
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