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A leader’s guide to new and improved talent strategies

ESSENTIALS FOR LEADERS AND THOSE THEY LEAD

At about this time in 2021, when Leading Off last covered talent management, the great exodus of employees from the workplace had just begun. A year later, as we settle into the new normal, it’s time to check in on how leaders are handling talent challenges—which continue to be severe. Are you able to keep people from leaving? Are you addressing the underlying workplace issues? This week, let’s explore the current state of play in the talent game and how some emerging trends may reshape it in the coming years.

AN IDEA

Image of a brown egg balanced on two forks

Adopt an entirely new set of tactics

The so-called Great Resignation could last for several more years as people continue to reevaluate their personal and professional lives after the pandemic. Unlike previous cycles of downturn and recovery, this attrition is marked by many people leaving their employers without another job in hand or quitting the workforce entirely. Some who quit return but do so only if they’re assured of flexibility, adequate pay, and a sustainable workload. Employees want to be valued as whole people, not just workers; they expect employers to provide a strong company culture, a sense of community, caring coworkers, and career mobility—and may not stick around if those needs aren’t met. Leaders may need to revamp their talent strategies altogether, rethinking compensation and benefits and factoring in other employee needs such as mental and physical well-being, psychological safety, and scheduling and staffing flexibility.

A BIG NUMBER

780,000

That’s the number of additional tech specialists Germany will need by 2026 to meet the economy’s demand. Companies worldwide face an acute shortfall of tech talent at a time when being technologically strong is critical to success in a digital world. Traditional hiring or outsourcing won’t cut it; leaders must tackle the issue by adopting a multifaceted approach, such as setting up a focused team to manage the whole candidate experience, providing advanced planning and development tools, and creating an environment where developers and engineers are treated as innovators and active participants in the business.

A QUOTE

“We regularly confuse people with roles and confuse talent with broad skill pools. In many organizations, roles today bear no resemblance to what they’d look like if you were designing them from scratch.”

That’s McKinsey’s Bill Schaninger in this podcast on the importance of getting the right people into the roles most likely to deliver value. Only a few roles are truly critical to the organization, and “everything else probably sits in a skill pool, a clustering of common skills deployed in different ways,” says Schaninger. Deriving maximum value from those skills may mean reshuffling talent, whether that involves hiring new employees or moving incumbents into jobs that are better aligned with their skills and aspirations. To fill roles so that they yield tangible returns, first evaluate the candidates’ fit, advises McKinsey’s Bryan Hancock. “Figure out exactly what you need new folks to do and assess against it,” he says. “If the incumbent is great, great. If not, you’re going to realize it in six months or 18 months or 24 months. A better fit drives better returns.”

A SPOTLIGHT INTERVIEW

Illustration of human-shaped cutouts arrayed in an internal network

Companies tend to overlook in-house employees for promotions or filling open roles, often because of a perceived skills gap. But matching internal workers with available jobs offers organizations “the ability to move talent dynamically,” says McKinsey’s Emily Field in this podcast on creating an internal talent marketplace. A digitally enabled talent marketplace offers visibility into your organization’s labor supply, identifying people’s skills and willingness to take on new opportunities. Rather than trying to fit candidates into rigidly defined roles, leaders can use AI-generated data to find alternative or adjacent skills that are a close match. “From a societal-impact perspective, employers are helping their employees create the skills to thrive in a new part of the organization, instead of the alternative—watching them exit,” says Field.

MANIC MONDAY

Image of three colleagues at an office celebration

Make that Wednesday for most companies that offer a hybrid work schedule. Wednesday is the day workers are most likely to be in the office—if they go into the office at all. As companies try to woo employees back to their cubicles, they’re experimenting with ever-more-imaginative perks. At last count, these included live concerts, beer and wine tastings, pop-up snack stands, free food and T-shirts, and terrarium-making classes. A few companies have begun to offer commuting stipends to help ease the financial burden of trekking back to the office. And to supervise it all, some organizations are hiring chief happiness officers, mindfulness leaders, and vice presidents of employee success.

Lead with talent.

— Edited by Rama Ramaswami, a senior editor in McKinsey’s Stamford office

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Heading back to the office? Three practices matter most to hybrid workers.

Building a better hybrid office

In the news

•

Rethinking the return. As employees hesitate to return to daily commuting, bosses are relaxing the rules about going back to the office. In April, the CEO of a large US bank said that about 40% of the company’s 270,000 employees would be allowed to work partly from the office and partly from home. Wall Street and Silicon Valley employers alike are revisiting ambitious plans that asked workers to be on-site a certain number of days. In a tight labor market, managers worry that punishing workers who remain at home may push them to quit. [Bloomberg]

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Taking attendance. Millions of workers have gotten used to the autonomy and flexibility that go hand-in-hand with working from home. But as companies renew calls for employees to return to the office, executives face a key decision: Should they keep tabs on worker attendance or trust that employees are doing their jobs? Although new software tools enable employers to collect data on when and how often workers are going to the office, experts say that using “bossware” (that is, surveillance software) can erode corporate culture. [NYT]

Nearly 60% of our survey respondents working in hybrid models ranked work–life support in the top inclusion practices they want their organizations to improve.

On McKinsey.com

•

Hooked on hybrid. Employees appear to be hooked on hybrid work, according to McKinsey's new research. In a survey of more than 1,300 workers spanning three continents, 75% said that they prefer a hybrid working model. Of that group, more than two out of three said that they would likely look for jobs elsewhere if asked to return to the office full time. Companies that don't offer opportunities for hybrid work risk losing employees, including younger workers, who without a hybrid work option are nearly 60% more likely than their older peers to leave.

•

What workers want. Inclusive workplaces increasingly enable companies to attract and retain top talent, McKinsey research reveals. Employees who work in an inclusive setting are seven times likelier to say that their companies are high-performing and are 47% likelier to stay. To learn what matters most to employees, McKinsey asked which inclusion practices workers want their companies to work hardest to improve. Every demographic said that three critical practices matter most in building an inclusive, hybrid workplace.

— Edited by Belinda Yu

Get hybrid right

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