- In the U.S., voluntary attrition increased by almost 800,000 in the past year, presenting the need for companies to rethink their talent strategy.
- Companies must focus on the health and skills of their employees, making use of the potential that their assets already hold, says McKinsey.
- The management consultancy's Great Attrition research has shown that employees want to feel valued and have a sense of belonging.
The Great Attrition is happening. A record number of employees have or plan to quit. In the U.S., voluntary attrition increased by almost 800,000 in the past year, while involuntary attrition decreased by almost 400,000 during the same period according to the Bureau of Labor Statistics. Recently, a McKinsey survey found that nearly a quarter of employers believe they are holding on to more low-performing talent now compared to a year ago. What does this mean for a company’s talent strategy?
Employers must be thoughtful and creative to retain the right talent, develop skills to fill critical gaps, and attract new people. Consider taking these four actions to shore up a long-term talent strategy:
1. Address burnout. After a tumultuous 20 months, employees are struggling with grief, loss, and burnout. Well-being challenges and deficits have increased, and the very nature of the pandemic has strained some social support and coping mechanisms at work (e.g., social distancing).
Compassionate leaders most inclined to provide social and emotional support at work, notably women, have played “triple duty”—driving performance on the job, supporting colleagues’ socioemotional and relational needs, and filling caretaking roles at home. As burnout takes its toll and people leave, work often shifts to those who remain, driving even more burnout. Women have been particularly impacted: 42 percent report they are often or almost always burned out, compared to 35 percent of men.
Employers should create multiple avenues that address these challenges head-on to retain their people. For example, a global sportwear company closed its headquarters for a week to give everyone a break. They didn’t just make headlines—they sent an important, people-first message to current and prospective employees.
2. Double down on health. Institutions that can sustain high performance over time tend to exhibit a vibrancy and durability that we call organizational health. The healthiest organizations go beyond fixing problems to achieve a peak level of functioning more akin to thriving and flourishing. Similarly, organizations can go beyond alleviating burnout to create an employee experience that helps every individual succeed. This can turn a liability into an asset—from talent attrition to talent attraction.
It is time for employers to be bold by, for instance, rewarding and promoting leaders who drive visible performance results and also build capabilities, enhance organizational health, create psychological safety, and help reenergize the organization.
3. Build skills. The easiest talent to source is the talent you already have; the answer to sourcing the right skill sets lies in redeployment, reskilling, and upskilling.
A beauty company moved quickly at the outset of the pandemic to retrain frontline, brick-and-mortar employees in social media advertising and remote customer support, redeploying them as influencers and beauty advisors. The strategy contributed to 120 percent year-over-year sales growth.
Investing in employee development helps to build capabilities that drive financial returns, but it also shows employees that their development and advancement matter and they are essential to the company’s future.
4. Reimagine the talent pool. Identify needed knowledge, skills, abilities, and experiences. Hiring for skills and thinking beyond traditional profiles or academic degrees could open up new pools of high-performing talent that may simply be older, younger, or less formally educated.
Invest in fellowships and paid internships to develop the right skills. Also, work on bringing back “boomerang employees” and employ retired workers to mentor, apprentice, and advise the organization. Many financial institutions are creating paid internship programs for college freshmen and sophomores to strengthen their talent pipeline and advance their DE&I goals by creating more equitable access.
Why it matters
Employees you would like to retain are leaving, and if this continues, talent gaps will only worsen. These strategies can help retain the best people, improve morale, leverage untapped talent pools, and acquire necessary skills. Our Great Attrition research has shown that creating a sense of belonging and feeling valued holds the key to strengthening ties with employees, so they want to grow with the company—not without it.