6 Steps to Win the New War for Talent

Woman stands proudly in office

In their 2001 book The War for Talent, authors Ed Michaels, Helen Handfield-Jones, and Beth Axelrod predicted that what would make or break companies in the next two decades would be the ability to attract, develop, and retain talent. In 2022, the war rages on, with the shortage of qualified and available talent cited as the top strategic issue by the senior leadership of emerging and mid-market companies. While not a new issue, the challenge of finding and keeping talent has been exacerbated by the pandemic to a point where mid-size businesses find themselves fighting for survival – not because they lack customers, but because they lack employees to service their growth.

The Great Resignation

It is popular to blame The Great Resignation, that amorphous, cross-industry monster, shrug it off as something we can’t control, and keep posting job ads hoping for the best. But we must understand what’s really happening if we’re going to address the problem.

The Great Resignation is often over-simplified to suggest that the problem is that employees want more flexibility than employers are willing to provide – that it is a battle over the ability to work from home. A more accurate and generous explanation is that employees want more of whatever it is they are lacking, whether that is purpose, fulfillment, growth, work-life balance, flexibility, or, less common, compensation. And just as many businesses have used the pandemic to disrupt the status quo and make changes they should have made long before, so too have employees.

The Great Resignation is the result of a disconnect between what we as individuals are looking for from our work and what we are finding on offer in our workplaces. Some people are changing jobs to find a better fit, moving from a great place to work to a great place to work for me, but in most cases, people are leaving workplaces they have found wanting in two fundamental aspects: meaning and care.

The Meaning Gap

Most organizations are using higher compensation as a band-aid – offering candidates and employees more money to join or stay. Compensation is a critical tool in your talent strategy, and you may need to employ it more aggressively in the short term to keep the business going, especially if you are misaligned with industry standards. But it doesn’t crack the walnut of why people are leaving or what will make them stay. It isn’t enough on its own, and it never was because people don’t work to get paid.

I often speak with business owners who lament that employees are only showing up for the paycheck while they, the leaders, have loftier reasons for working. The irony is that they’re right, but it’s a situation of our own making. In a recent interview with Behavioural Scientist, psychologist, and author of Why We Work, Barry Schwartz explains that “If you create workplaces that essentially deprive people of any other satisfaction that might come from work…. You create a workplace where people show up only if they’re getting paid, and then you claim, ‘You see, I told you, the only reason people work is to get paid.’” Compensation matters. But by focusing only on compensation to attract, engage, and retain, we create workplaces where people show up only to get paid.

These environments are in direct conflict with our needs as humans. Studies suggest that our intuitive and automatic impulses lead towards cooperation rather than selfishness: we are “willing to give for the good of the group at our own personal expense.” Our nature is to contribute to something larger than ourselves, yet we have created workplaces that disconnect the work from this larger purpose.

The job of bringing meaning to work does not rest solely on the leader or manager; employees also need to understand that the job doesn’t exist to pay them. It has an inherent purpose, and we all share responsibility for connecting the work to that purpose. Leaders must help employees understand the purpose and strategic aims of the organization and how their role contributes. And employees must find ways to make a meaningful contribution and make that contribution meaningful to them.

The Care Gap

In the past two years, the war for talent has increasingly been positioned as a battle between employer and employee: employees are demanding fill-in-the-blank, and employers better get with the program. But are we really in competition? And with whom? I’m an employee. The President of our company is also an employee. There is me, you, my manager, your manager, and their manager. There are also owners, but in many cases, the owners are also employees. Who is the employer? We can’t ignore that power increases as we move up the hierarchy, but an “us” versus “them” mindset only widens the gap between manager and direct report and between “staff” and senior leadership.

“Us” versus “them” is in our nature. In a 2021 Time article, Madeleine Albright explained the human impulse to pick sides: “Psychologists point to our desire to be safe by joining groups with which we have an affinity, our fear of the unknown, and our vanity; we want to think of ourselves as better or smarter than the other.” Albright is speaking of political division, but it’s equally true, and dangerous, in workplaces. It is contrary to the “we” mindset that creates great teams and organizations and brings meaning and dignity to work.

The “us” versus “them” mindset thrives in environments that lack care. Gallup, the Washington, D.C.-based analytics company, identified 12 drivers of employee engagement, and five relate to perceptions of care: receiving recognition or praise for doing good work, feeling that someone cares about you as a person, having someone that encourages your development, having someone that talks to you about your progress, and feeling that your opinions count. Gallup’s research has shown that organizations that do better on these measures have 18 – 43% less turnover and 23% higher profitability. In 2020, the overall percentage of engaged workers was an abysmal 36%, representing a significant gap and opportunity for leaders to increase engagement, retention, and results.

Closing the Gap

The pandemic gave people an opportunity to reflect on what matters and make changes to bring their work lives more in alignment with their humanity – to find work that respects their fundamental needs and brings them meaning and dignity. The resulting Great Resignation exposed the disconnect between what we’re all looking for from our work and what we’re finding in our workplaces. And the consequence for leaders is an unprecedented challenge in attracting and retaining talent.

The good news is, with the gaps exposed, they will inevitably close; leaders will decide to change how they lead, or their businesses will shrink and disappear.

Here are six steps leaders at all levels can take to close the gaps and win the new war for talent:

1. Review compensation and remote-work policies

Start by reviewing compensation and remote-work policies to ensure they are aligned with industry standards. You don’t need to pay top of the market or adopt the most flexible work structure in the business – great talent rarely puts either of these at the top of their requirements list – but you must design your practices in the context of what others are doing, or people will go elsewhere.

2. Review workloads

Take a very hard look at workloads, which have skyrocketed in the past two years and are causing many retention issues. If you consistently require hours and meeting schedules that compromise individual well-being, you will lose people, even in a workplace with a high degree of meaning and care. If you don’t know where to start, ask your teams: “If we had to change things TODAY, what would we do?” 

3. Clarify organizational purpose

Understanding the meaning or purpose of the company is critical to employees feeling that their jobs matter. If the organization’s “North Star” isn’t clear, whether you express it as purpose, vision, or mission, it will be difficult to close the meaning gap. Make time as a leadership team to clarify and align around where you’re going and why you do what you do and talk about both with your teams. 

4. Clarify individual purpose

The individual purpose need not be the same as the organizational purpose, but they should be aligned. I need to know that the work I do is aligned with what I care about and that it contributes to what the organization is in pursuit of; that as a team, we are achieving our personal goals while contributing to the common good. Spend time talking with your team about what brings them joy or fulfillment at work, and what success looks like in the long term, then work with them to draw links between what is important to them and what matters to the organization.

5. Ask more questions

If you want to know what employees need, ask. Schedule regular one-on-ones with all your direct reports and insist all managers do the same. Use the opportunity to check in on current projects, stay close to how your people are doing, and gain insights into their needs by asking what’s going well, what’s not, and how you can help.

6. Treat people like people

Demonstrate that you care about employees as people first, workers second. Thank employees for the work they do, recognize them for good work, get to know them as people, and ask about their families. And recognize that creating an environment of care and respect starts but doesn’t stop with leadership; leaders can and should expect the same level of care and respect from everyone in the organization.

If you want to win the new war for talent, take steps to address the fundamentals – compensation, flexibility, and workloads – while injecting more meaning and care into the workplace.